Labor Relations Update

NLRB: Employee’s Profanity and Threatening Comments Insufficient to Forfeit Protections of the Act

In the past, we frequently have discussed protected activity and how an employee’s profane outburst or deliberate conduct may render otherwise protected activity, “unprotected.”  However, as this recently issued decision reinforces, the Board is usually quite tolerant of impulsive behavior and outbursts in response to legitimate grievances over the terms and conditions of employment.

Plant Worker Refuses to Sign Dues-Checkoff Form

In Alle Processing Corp. 369 NLRB No. 52 (2020), the employer, a manufacturer and packager of kosher food products for hospitals, entered into a bargaining relationship with a local union.  The parties’ CBA contained a union-security clause requiring that all bargaining unit employees become members of the union and that the union could request the employer to fire employees who failed to pay dues and initiation fees.  The contract also contained a checkoff clause authorizing the employer to deduct dues from employee paychecks and remit the money directly to the union.  Dues deductions are voluntary and the each employee must voluntarily execute a checkoff authorization form.

On multiple occasions, union representatives came to talk with employees to get them to sign dues deduction authorization forms.  Though their efforts succeeded with nearly all employees, a few refused to sign.  As a result, the plant’s manager held individual meetings with the reluctant individuals, and soon only a lone holdout remained.  In an attempt to convince the employee, the employer held two additional meetings in the manager’s office.

Though the employee calmly declined to sign during the first meeting, events escalated in the second.  After the employee was eventually convinced to sign the form, a provocative comment from management caused him to raise his middle finger at the plant manager, who immediately threatened him with termination.  The employee responded, “I can get to you whenever I want…whenever I want I can find you…this is how I work, I’m a streets guy.”  The employee then grabbed a small carousel containing coffee accessories, motioning as if to throw it, but was stopped and left the meeting.  He was terminated and left the plant without further incident.

Refusing to Sign Dues-Checkoff Form is Protected Activity

Citing numerous Board precedents, the administrative law judge found that it is well settled that “the Act guarantees to each employee the right to determine for himself, free from coercion, whether he shall sign a checkoff authorization or not.”  Thus, the employee’s repeated refusals to sign the dues-checkoff authorization, both prior to and during the meetings with employer representatives, constituted protected activity.

Employee’s Outburst Did Not Forfeit the NLRA’s Protections

The administrative law judge applied the following four factor set forth in Atlantic Steel Co., 245 NLRB 814, 816 (1979) to determine whether the employee’s conduct forfeited the protections of the Act: 1) the place of the discussion; 2) the discussion’s subject matter; 3) the nature of the outburst on the part of the employee; and 4) whether the outburst was provoked by the employer’s unfair labor practices.  On review, the Board affirmed the ALJ’s conclusion that all four factors favored a determination that the employee’s conduct retained the protection of the Act.

The Place of the Act

The meeting where the outburst took place occurred within the plant manager’s office as opposed to a work area.  Only managers or supervisors were present, and there is no evidence that any employees saw or heard anything that occurred within.  In fact, they worked in an entirely separate building.  In other words, the employee’s acts of defiance did not occur in front of other employees which would be more difficult for the employer to tolerate.

The Subject Matter of the Discussion

The employer admitted that the subject matter of the meeting was to discuss the employee’s refusal to sign the dues-checkoff form.  The employee long had been an opponent of the union, refused to sign the form on prior occasions, and therefore, his conduct occurred during his “attempted assertion of a fundamental right under the Act.”

The Nature of the Outburst

The Board upheld the ALJ’s credibility determinations regarding competing accounts of the employee’s conduct, noting that credibility determinations could not be overruled unless “the clear preponderance of all the relevant evidence convinces us that they are incorrect.”  While the Board did not “condone” the employee’s use of an obscene gesture and profanity, it emphasized that the employer had no policy against profanity, and previously tolerated profanity by employees, even if directed at supervisors.  The Board further found that the employee’s statement that he was a “streets guy” was too vague to constitute a threat.  Therefore, the nature of the employee’s conduct did not militate against a finding that it remained protected under the Act.

Whether the Outburst was Provoked

The Board affirmed the ALJ’s finding that the employee’s conduct occurred in response to coercive conduct by the employer.  Numerous precedents hold that attempts to coerce employees to execute dues-checkoff authorizations or leading employees to believe such dues are mandatory clearly violate Section (8)(a)(1) of the Act.

Takeaways

Taken in isolation, the employee’s outburst of profanity and perceived threats of physical harm may appear too egregious to remain protected under the Act.  However, this case cautions that such actions must be considered in the context of the regular practices at the employee’s workplace.  Particularly where the outburst occurs away from the eyes of uninvolved employees and in response to clearly unlawful action, the Board may find such conduct retains protection under the Act.

BREAKING: NLRB Announces Representation Elections Will Resume April 6, 2020

On March 19, 2020, the NLRB announced that it was suspending all representation elections through April 3, 2020.  The Board stated that the suspension was necessary to ensure the safety of its own employees, as well as those members of the public involved in the elections.

Today, the Board announced that it will not extend the temporary suspension past April 3, 2020, and elections will resume beginning Monday, April 6, 2020.  In a short statement, the Board indicated that over the last two weeks, the General Counsel had developed solutions to the logistics problems caused by the closure of several Regional Offices and limited staffing at others.

The Board concluded that going forward, elections will resume in a “safe and effective manner, which will be determined by the Regional Directors.”  Though the announcement provided no further information on what procedures will be required, additional guidance is sure to come.  Early indications from Regional Offices suggest that mail ballot elections may become standard until the pandemic has passed.

We will keep you updated on any new developments.

NLRB Issues Final Rule Reworking Union Election Procedures

Although, like everyone else, the personnel at the NLRB have been consumed with the impact of the COVID-19 pandemic on daily operations, including the ability of its Regional Offices to function and serve the public, the Board nevertheless continues moving forward on non-COVID-19 matters as well.

On March 31, 2020, the NLRB announced it had finalized three amendments to its rules and regulations regarding union election and recognition procedures.  The rule was finalized on April 1, 2020, and will take effect on May 31, 2020.

The Board implemented the final rules with minor modifications from the proposed rules published on August 12, 2019 (which we reported on here) based on the 80 comments it received.  The rules are intended to “better protect employees’ statutory right of free choice on questions concerning representation.”

The Board also published a fact sheet that provides a helpful summary of the final rules and the differences from the originally-proposed rules.

The key takeaways from each of the three final rules are discussed below, including the changes from the original notices of proposed rulemaking from last year.

Replacing the Blocking Charge Policy to Expedite the Election by Implementing Vote-and-Impound or Vote-and-Count

A major criticism of the current election rules has been the ability of (mostly) the petitioning union to block, sometimes for months or years, an election based on the filing of charges alleging that the employer committed unfair labor practices.  The process for investigation and resolution of the charges could leave employees in limbo as to a decision.

Now, the final rule eliminates the ability of a party to block an election merely by filing charges.  Despite a pending ULP charge, the election will proceed as scheduled, and the votes will either be impounded (i.e., not counted) or counted, depending on the nature of the alleged unfair labor practice:

  • Vote-and-Impound: Where the party alleges a violation of 8(a)(1) and (2) or 8(b)(1)(A) that challenges the circumstances surrounding the petition or the showing of interest submitted in support of the petition; or where an employer has allegedly dominated a union in violation of 8(a)(2) in order to disestablish a bargaining relationship.
  • Voteand-Count: All other unfair labor practice charges.

Importantly, regardless of the nature of the charge, the certification of results, including, where appropriate, a certification of representative, will not issue until the ULPs are finally disposed of, and the effect on the election is determined.

Changes from Proposed Rule in Final Rule:  The August 2019 proposed rule established the vote-and-impound procedure for all ULPs, whereas now, only those ULPs that address the very legitimacy of the election process necessitate a vote-and-impound procedure.  As a result, for most ULP charges, the election results will be publicized to all interested parties, and even though the election results will not be certified until the ULPs are resolved, the union will know whether it was acting “with the support of or in the teeth of employee’ wishes,” which the Board hopes will facilitate settlement between the parties.

Reinstating Dana Corp. Challenges to Voluntary Recognition

In Lamons Gasket, Co., 357 NLRB 739 (2011), the Board, overruling Dana Corp., 351 NLRB 434 (2007), established that an employer’s voluntary recognition of a union immediately barred the filing of an election petition for between 6 months to one year after the parties’ first bargaining session.

Now, the Board has overruled Lamons and reinstated Dana Corp., providing that where an employer voluntarily recognizes a union pursuant to NLRA Section 9(a), it must post a notice to its employees reflecting the same, and employees may challenge such recognition if they petition for a secret-ballot election within 45 days thereafter.  If no petition is filed during the 45-day notice period, the voluntary recognition bar would operate for “a reasonable period of time” afterwards.

Changes from Proposed Rule in Final Rule:  Unlike in the proposed rule from August 2019, the final rule:

  • Applies only to an employer’s voluntary recognition on or after the effective date of the rule, and only to the first collective bargaining agreement reached after such voluntary recognition;
  • Permits either the employer or the union to notify the NLRB Regional Office that recognition has been granted (the prior rule required both parties to do so);
  • Specifies the employer’s notice to employees advising them of the 45-day notice period must be posted “in conspicuous places, including all places where notices to employees are customarily posted”;
  • Eliminates the rule’s specific reference in the notice as to the right to file a “decertification or rival-union petition” and just refers to a “petition”;
  • Requires an employer to distribute the notice to unit employees electronically if the employer customarily communicates with its employees by such means; and
  • Provides the wording of the notice to employees.

For Construction Industry Employers, Requiring Evidence of Majority Employee Support for Section 9(a) Recognition in Addition to Contractual Language

In the construction industry, NLRA Section 8(f) allows employers and unions to form a collective bargaining relationship through what are often called “pre-hire” agreements, even absent the support of a majority of employees.  8(f) relationships last as long as the term of the contract, unless the parties agree to extend.  All other employer/union relationships, which are formed pursuant to NLRA Section 9(a), last indefinitely, even after the CBA term expires, unless the union no longer maintains majority support of the workforce.

Under Staunton Fuel, 335 NLRB 717 (2001), a union could convert a Section 8(f) agreement with a construction industry employer to a “full” Section 9(a) agreement through contract language alone – e.g., by including language in the CBA that agreement was subject to Section 9(a) of the NLRA and the union has majority support of the bargaining unit.  Indeed, many unions have insisted on such language in construction industry agreements to maintain their foothold on the relationship.

The Board’s final rule overrules Staunton, and conditions Section 9(a) status on “positive evidence” that the union demanded recognition, which was accepted by the employer and supported by a majority of the employees.  The Board clarified that the required “positive evidence” would be the same showing necessary for unions in non-construction industries to establish recognition.  In other words, contract language alone is insufficient.

Changes from Proposed Rule in Final Rule:  Importantly, like the voluntary recognition bar amendment, the Board clarified that this rule applies only to voluntary recognition extended or any CBA entered into on or after the effective date of the rule, as the Board hoped to minimize the impact on longstanding bargaining relationships.  As a result, construction industry employers with existing CBAs referencing NLRA Section 9(a) cannot rely on this final rule to transform their collective bargaining relationship with the union to 8(f).

*          *          *          *          *          *          *

The Board’s finalization of these rules addressing union election procedures continues its mission of adopting the principles set out in its ambitious rule making agenda from May 2019.

Already, the Board has updated the representation-case procedures that are expected to go into effect on May 31, 2020; and announced a proposed rule regarding the “employee” status of students, and accepted all comments as of February 28, 2020.  All that is left from the May 2019 agenda is a proposed rule regarding the standards for access to an employer’s private property.

As always, we will continue to monitor any developments and keep you updated.

CARES ACT Relief for Mid-Size Businesses Comes with Important Union Related Conditions

Mid-sized businesses (defined as 500 to 10,000 employees) impacted by the Coronavirus may be able to obtain relief loans under the COVID-19 stimulus law, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), but only if non-union employers agree not to oppose the unionization of their workforce for the term of the loan, and if unionized employers agree not to “abrogate” existing collective bargaining agreements for the term of the loan and 2 years following loan repayment.

First, for the entire term of a Treasury Department loan, an employer must agree to “remain neutral in any union organizing effort.”  In other words, if a union comes knocking, those businesses cannot oppose unionization.  The bill does not define or elaborate on the concept of employer neutrality or how such obligations would be enforced (although future regulations may provide more detail).  Importantly, it does not require “card check” agreement – allowing an employer to insist on a secret ballot election at the National Labor Relations Board.

Second, for the entire term of the loan and 2 years following loan repayment, businesses must certify that they “will not abrogate existing collective bargaining agreements.”  The word “abrogate” is not defined in the statute, there has been no regulatory guidance to date as to its scope (or how it will be enforced) and it is not clear whether the statute imposes additional obligations beyond those that are imposed under the National Labor Relations Act.

For more information on the Coronavirus, visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

NLRB General Counsel Issues Guidance on the Duty to Bargain During Emergencies

On March 27, 2020, NLRB General Counsel Peter Robb issued Memorandum GC-20-04 to provide guidance to NLRB regional offices and the general public.

Acknowledging that “we are [currently] in an unprecedented situation,” the General Counsel provided summaries of several NLRB decisions discussing how, if at all, an employer’s duty to bargain under  NLRA Section 8(d) may be affected by emergencies impacting the public at large and a particular employer.

GCM-20-04 is limited to the duty to bargain.  It does not address other NLRA issues that may arise during an emergency and should not be relied on for other purposes.  Additional guidance may be provided in the coming weeks.

The Economic Exigency Exception to the Duty to Bargain

During times of economic hardship, employers often consider layoffs and reductions of working hours.  Unless permitted by the management rights clause or other provisions of a collective bargaining agreement, such decisions affecting unionized employees are mandatory subjects of bargaining, meaning that an employer must bargain to a good-faith impasse before implementation.  Ordinarily, this bargaining obligation extends to both the decision to lay off and its effects on the employees.

Citing recent cases applying the principles set forth in Bottom Line Enterprises, 302 NLRB 373, 374 (1991) and RBE Electronics of S.D., 320 NLR 80, 81 (1995), the General Counsel noted that  an exception to the general rule may exist if the employer can demonstrate that “economic exigencies compel[led] prompt action,” emphasizing that the exception is limited to “extraordinary events which are an unforeseen occurrence, having a major economic effect requiring the company to take immediate action.” Port Printing & Specialties, 351 NLRB 1269 (2007).

Broadly speaking, the cases teach that the employer must be able to demonstrate that the exigency was caused by external events beyond its control or were not reasonably foreseeable.  The analysis is very fact-specific, with particular attention given to the exigent circumstances and whether bargaining over the employer’s decision was possible or would be fruitful.  Even if decision bargaining would be excused, “effects” bargaining will be required. However, when time is of the essence, negotiations “need not be protracted” to discharge the employer’s duty.  RBE Electronics of S.D., 320 NLRB at 82.

What Qualifies as an Economic Exigency Sufficient to Excuse the Duty to Bargain

As already noted, the Board has generally taken a narrow approach in applying the economic exigency exception to an employer’s decision bargaining obligation.

At one end of the spectrum, where an employer experienced acute financial difficulties that had been building over time the Board held that the duty to bargain over the layoffs was not excused.  Thus, in Hankins Lumber Co., 316 NLRB 837 (1995), the Board found that the employer violated its duty to bargain by unilaterally laying off employees at a lumber mill due to a months-long log shortage.  Critical to that finding was that there was no “precipitate worsening” of the problem that required immediate action.

However, and possibly most on-point for the present circumstances, the Board found economic exigencies sufficient to create a “dire financial emergency” excusing the employer’s duty to engage in decision bargaining in the context of a public emergency similar to the COVID-19 pandemic.  In the aftermath of 9/11, the Board held, in K-Mart Corp., 341 NLRB 702 (2004), that the precipitating, unforeseen business impact on the retailer excused its duty to bargain over  the resulting layoffs.  In this case, the retailer experienced a 60% drop in business at one facility and overall losses so devastating that it was forced to file for bankruptcy by the start of 2002.  The ALJ held that these circumstances were sufficient to excuse K-Mart’s failure to bargain over its decision to lay off employees under the Bottom Line test.  The Board adopted the judge’s findings and conclusions.

Notwithstanding Economic Exigencies, Employers Must Still Engage in Effects Bargaining

Even where the Board has held that exigent circumstances may justify an employer’s unilateral action to implement a layoff, the duty to bargain regarding the effects of the layoff remains.  This distinction, highlighted by several cases analyzed in GCM-20-04, is due to the fact that while a decision to lay-off employees may be required to stem losses due to an imminent emergency, there is often ample time to discuss a layoff‘s effects after the emergency has been addressed.

The distinction between the duty to bargain over the decision to lay off and its effects has been emphasized in cases involving public emergencies.  In Port Printing & Specialties, 351 NLRB 1269 (2007), the employer closed operations and laid-off all employees in response to a mandatory evacuation due to Hurricane Rita. The Board found that the evacuation order compelled the employer’s layoffs, but did not excuse it from failing to bargain over the effects of the layoff after the hurricane, including the employer’s use of non-unit personnel to resume operations after the storm had passed.

The same holds true in situations where the economic exigency is specific to the employer, e.g., the inability to secure financing necessary to continue operations.  See Cyclone Fence, Inc., 330 NLRB 1354 (2000); Raskin Packing Company, 246 NLRB 78 (1979).

The rationale of these cases is that even if exigent economic circumstances compel lay-offs or other unilateral action, the obligation to engage in effects bargaining is not extinguished.

Unilaterally Implementing Health-Related Policies

One case discussed in GCM-20-04 addresses the employer’s ability to unilaterally implement health and safety policies in an emergency, which seems to bear particular relevance to the current challenging circumstances attendant to the COVID-19 pandemic.

In Virginia Mason Hospital, 357 NLRB 564 (2011), the hospital implemented a policy requiring both union and non-union nurses who had not received a flu shot to either take antiviral medication or wear a protective mask. The ALJ found that the employer’s policy was excused by an exception to the duty to bargain set forth in Peerless Publications 283 NLRB 334 (1987) because the employer’s policy (1) went directly to its core purpose of protecting patients’ health; (2) was narrowly tailored to achieve the aim of reducing the spread of influenza; and (3) was limited to registered nurses who declined other flu-prevention options.  Although the ALJ found that the Peerless exception was satisfied here, the Board reversed, noting that the Peerless exception is limited to the facts of that case, which involved a newspaper’s implementation of a code of ethics that related to First Amendment concerns, and should be narrowly applied given the constitutional issues in that case.

The General Counsel’s inclusion of this decision is noteworthy, as is his reference to Member Hayes’ dissenting opinion that the Peerless exception is designed to protect decisions related to the “core purpose of its enterprise,” as here, and in this case the policy related to protecting patients and was narrowly tailored.  This could foretell how a Republican Board may deal with a similar issue if presented today.

An additional limiting factor in Virginia Mason Hospital was that while the flu has always been a challenging healthcare issue, particularly in the hospital setting, it pales in comparison to the current COVID-19 pandemic; the dangers that exist if employees fail to take proper healthcare precautions; and the presence of federal, state and local guidelines that may require employers to take health-related precautions, mooting any bargaining obligation.

Takeaways

Though the Board traditionally has applied the “economic exigency” exception to the duty to bargain narrowly, it has been satisfied where unforeseen events caused a major economic effect on the employer, such as a hurricane, 9/11, major sudden downturn in business, or loss of credit.  Reading between the lines of GCM-20-04, the General Counsel appears to have signaled that the current pandemic may satisfy this standard, having referred to the coronavirus as an “unprecedented situation.”  Nevertheless, each employer’s obligation will depend on the impact of the pandemic and related federal, state and local orders affecting its particular business operations.

Even if the exception applies, employers must still provide notice and an opportunity to bargain over the effects of the employer’s decisions, but such bargaining need not be protracted.

Employers should carefully evaluate whether they may implement health and safety policies without bargaining.  GCM-20-04 highlights a decision where a hospital was found to have violated the Act by refusing to bargain over certain requirements imposed on nurses to prevent the spread of the flu.  But the present circumstances may be far more exigent than in Virginia Mason Hospital, given the potential dangers of the spread of COVID-19 and employer obligations to implement health and safety requirements based on governing law.

Finally, employers must evaluate their bargaining obligations in the context of the governing CBAs for union employees, and any handbooks and past practices applicable to nonunion employees, to avoid the risk of disparate treatment claims based on union membership.   Employers who act consistent with their written policies, CBAs and past practices will be more likely to prevail on such discrimination claims.

For more information on the Coronavirus, visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

NLRB Decides to Assert Jurisdiction Over Charter Schools On A Case By Case Basis

The NLRB continues to operate during the novel coronavirus crisis. Regional offices are largely working remotely as is the rest of the country.  The Board itself continues to issue decisions, albeit at a slower pace than usual.  On February 4, 2019, the NLRB invited interested parties to file briefs addressing whether the agency should decline to assert jurisdiction “as a class” to charter schools, which are private educational institutions granted a “charter” to operate pursuant to state public education law.  Generally speaking, unions do not like the NLRB to assert jurisdiction over charter schools because under federal law employees are entitled to a secret ballot election on the question of union representation; many state public education laws only require a “card check” to establish recognition.

On Wednesday, March 25, 2020 the NLRB affirmed a decision by the Regional Director which held that a New York charter school fell under Board jurisdiction.  KIPP Academy Charter School, 368 NLRB No. 48 (2020).  The union appealed the decision, arguing that under Section 14(c)(1) of the NLRA, charter schools should be exempt from Board jurisdiction as a class, because they are statutorily-exempt public entities.  This appeal led to the NLRB’s request for briefs.  Board law in this area contains cases where the Board asserts jurisdiction and cases where the Board declines to assert jurisdiction.

In a short decision, the NLRB held that, after consideration of all arguments made by parties it would not decline jurisdiction over charter schools as a class.  Beyond its ruling, the NLRB provided no explanation for its decision.

So, for the time being, the Board will continue to decide whether to assert jurisdiction over charter schools using its analysis of Section 14 of the Act on a case by case basis.

NLRB Suspends Representation Elections through April 3, 2020 due to COVID-19 Pandemic

The NLRB announced today in a press release that “[d]ue to the extraordinary circumstances related to the COVID-19 pandemic,” all representation elections, including mail ballot elections, will be suspended for the next two weeks, through and including April 3, 2020.  This means that any representation elections previously scheduled from now through April 3, 2020 will be postponed until a future date that will be determined by the Regional Director upon consultation with the parties.  The NLRB noted that it is continuing to monitor this situation and will determine whether an additional extension may be necessary.

The NLRB undertook the extraordinary but necessary step of postponing currently-scheduled elections to ensure the health and safety of its employees and the members of the public who are involved in the election process.  In recent days, the NLRB temporarily closed its Regional Offices in Cleveland and New Orleans, as well as Manhattan, Detroit and Chicago due to possible COVID-19 exposures, and announced an agency-wide telework policy through at least April 1, 2020.  Pursuant to the Board’s telework policy, the Agency’s Regional Offices will continue to handle incoming and outgoing mail, Agency employees will continue to perform work remotely, and Information Officer duties will be completed by telephone or electronic means.

We will continue to keep you posted as new guidance is issued.

Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns. Visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

Employer’s Poll of Workforce Not Unlawful Mass Interrogation, NLRB Rules

When it comes to an unfair practice allegation asserting an employer’s statement is unlawful, words matter.  And, so does context.  Under NLRB case law, the actual employer statements are evaluated as well as the overall context the words were uttered to determine whether there exists coercion.  Recently, the NLRB addressed an unusual case where an employer needed to determine whether its operations would be disrupted by its employees’ refusal to train temporary contractual employees.  So, in a group meeting, the employer asked the employees whether they would be willing to train the contract employees.  The question was asserted to be unlawful interrogation.  The case provides important guidance to employers about how to go about assessing workplace needs, and avoiding potential disruption to work, when the evaluation may intersect with employee rights.

Background

In Mercedes-Benz U.S. International, Inc., 369 NLRB No. 38 (2020), the employer sought to hire temporary workers to assist with a new product launch.  The employer asked its employees to help train the temporary workers, and a few employees opposed doing so.  In response, a supervisor said to one of the employees that it would “not help or be good for anyone” if the employees refused to train the temporary workers.  Then, at a pre-shift meeting, the supervisor asked a group of 15 to 17 employees if it was true that nobody wanted to train the temporary hires.  The supervisor asked for a show of hands as to whether or not this was true.  Two employees raised their hands, indicating they did not want to train the temporary workers.  The meeting ended and the shift went to work.  Most of the employees trained the temporary workers as requested.

An employee filed a charge alleging (i) that the comment that refusal to train the temporary workers would “not help or be good for anyone” infringed on the employee’s Section 7 rights and was an unlawful threat; and (ii) that the employer engaged in an unlawful group interrogation that restrained, coerced or interfered with the employees’ Section 7 rights under the Act.

NLRB Affirms ALJ’s Dismissal of Both Alleged Unfair Labor Practice Charges

  1. The statement that it would “not help or be good for anyone” was not an unlawful threat that violated the Act

First, the NLRB affirmed the ALJ’s finding that the employer’s comment to the employee that it would “not help or be good for anyone” if the employees failed to train the temporary workers did not violate the Act.  Critical to the ALJ and Board’s finding was that the employer made clear that there would be no adverse consequences if the employee continued to refuse to perform the training, and explicitly said that he did not have to train the workers.  The ALJ reasoned that it is unclear what one would objectively understand the comment to mean, particularly because the comment was made in response to the employee’s statement that the company would be embarrassed by the employees’ lack of support to conduct the training.

Because the comment about training the temporary workers did not necessarily suggest that the employer would retaliate against the employee for refusing to train the temporary workers, it did not interfere with, coerce and restrain the employee in the exercise of his Section 7 rights.

  1. The allegedly illegal “poll” did not violate the Act

The General Counsel’s complaint alleged the supervisor’s question was unlawful group interrogation.  Board precedent is such that an interrogation of employees is not per se unlawful unless, under all the circumstances, the interrogation “reasonably tended to restrain, coerce, or interfere with rights guaranteed by the Act.”  See Rossmore House, 269 NLRB 1176 (1984).

In applying this standard, the Board will consider factors, such as the background, what information is being sought, who the questioner is, and whether or not the questioned employee is an active union supporter.

The Board affirmed the ALJ’s determination here that the question about who would agree to train the temporary workers was not an unlawful interrogation under this standard because there was an actual need for the employer to plan for how to train the incoming temporary workers, and there was no threat of adverse consequences.

Takeaways

While this case does not break new ground, it reaffirms the principle that group questioning or interrogations are not per se unlawful under the Act.  Instead, the Board undertakes a fact-specific inquiry, and that under certain circumstances—as here, where there was a clear need to ascertain the requested information for business purposes—group questioning is permitted.  Although not discussed in this case, it is unclear exactly what right the employees would have had to refuse to train contract workers.  Presumably, although we are not told this specifically, it would have been some sort of collective refusal to train the contract workers.  There is no suggestion that the employees were acting in concert or would have gone on strike over this issue.  Rather, it appears to be an individualized indication that some employees objected to performing the training and might refuse to perform one task: training the temporary employees.  Refusal to perform one task, even if part of concerted activity of multiple employees, likely would not constitute protected activity, and may even have been completely unprotected as a partial strike.

Another important factor for employers to note is common sense, but bears emphasis.  Statements to employees and group questioning may be appropriate and will not infringe on employees’ Section 7 rights, even when related to employees’ terms and conditions of employment, if the employer is careful to avoid making direct or implicit threats of adverse consequences.  In this case, the employer emphasized that there would be no adverse action for declining to train the temporary workers and just needed the information to assess its workplace needs.  Again, it is doubtful any protected activity truly was at stake, and none is referenced in the decision, but even after the ALJ dismissed this case, the General Counsel appealed.

NLRB Issues its Final Rule for its New Joint Employer Standard

This morning the National Labor Relations Board (the “Board”) unveiled the final rule setting forth the new legal test it will apply in analyzing whether affiliated businesses are “joint employers”. The final rule, which will be effective on April 27, 2020, can be found here.

Background

On September 13, 2018 the Board published its proposed rule for modifying the existing joint employer standard. An extensive notice and comment period followed, which yielded approximately 29,000 comments before the January 28, 2019 deadline. Now, over a year after the comment period closed, the final rule is ready.

Under the existing standard, the Board would find an affiliated company to be a joint employer of another employer’s employees merely because the affiliated company possessed the authority to control those employees’ terms and conditions of employment, such as hiring, firing, discipline, supervision, and direction. In other words, an entity could be found to be a joint employer even if that entity did not actually exercise such control or authority over the employees in question.

The New Joint Employer Rule

Under the Board’s new final rule, in order to be found a joint employer an affiliated company must possess and exercise substantial direct and immediate control over one or more essential terms and conditions of employment that meaningfully affects another employer’s employees. While the possession of indirect control or contractually reserved control over workers (i.e., retaining the right to exercise control over workers at a later date) can be a factor in determining joint employer status, evidence showing that a company actually exercised its authority or control is now required in order for the new standard to be met.

The final rule clarifies that “essential terms and conditions of employment” are specifically limited to the rights related to determining wages, benefits, and hours of work as well as those dealing with the hiring, discharge, discipline, supervision, and direction of employees. Equally important is the Board’s definition of “direct and immediate control” that is “substantial.” Essentially, in future joint employer cases, the Board will assess whether the company actually possessed and exercised control on a regular or continuous basis. Evidence of control that is merely sporadic or isolated will be insufficient to justify finding an affiliated company to be a joint employer.

In his announcement of the final rule, NLRB Chairman John Ring stated, “With the completion of today’s rule, employers will now have certainty in structuring their business relationships, employees will have a better understanding of their employment circumstances, and unions will have clarity regarding with whom they have a collective-bargaining relationship.” The final rule’s enhanced clarity may allow companies to reevaluate their current arrangements with their business partners, particularly those that rely on franchisees and subcontracting work.

Looking Forward

Although the final rule provides employers, unions, and employees with much needed clarity as to whether certain business relationships will rise to the level of being a joint employer relationship, some questions still remain. How will the rule be interpreted and applied in future cases? Will the rule be subjected to legal challenges? Proskauer will continue to monitor any developments on these, and other related questions.

Applying the Boeing Standard, NLRB Upholds Employer’s Policies Restricting Cell Phone Use, Non-Work Email Use and Disclosure of Confidential Information

Applying the facially neutral work rule test laid out in Boeing (see here), the Board recently reversed an Administrative Law Judge decision, concluding that the employer maintained lawful workplace rules restricting employee use of (i) cell phones in commercial vehicles, (ii) the company email server for purposes not related to work, and (iii) the disclosure of confidential business information.   See Argos USA LLC d/b/a Argos Ready Mix, LLC, 369 NLRB No. 26 (Feb. 5, 2020).

Factual Background

The employer operates 300 ready-mix concrete facilities across the United States.  Employees, including the truck drivers at issue in the case at the employer’s Naples, Florida facility, are subject to several employment policies.

First, employees are bound by the company’s “Cell Phone Policy,” which places certain restrictions on employees’ ability to use cell phones while working in recognition of the “danger associated with using cell phones while driving.”  Specifically, the policy provides that cell phones are not permitted in the cab of a commercial and/or heavy equipment vehicle.

Second, employees are required to abide by the employer’s “Electronic Communications Policy,” which mandates that the company’s email system is to be used for business purposes only and not personal purposes.

Finally, employees are required to sign an “Employee Confidential Information Agreement,” which prohibits employees from disclosing “confidential Company information” to which employees have access during their employment.  “Confidential information” is defined broadly in the agreement to include, among many other things, earnings and employee information.

In 2017, the employer suspended and subsequently discharged an employee for suspected possession of a cell phone in his concrete truck in violation of the Cell Phone Policy.  His termination occurred after an unsuccessful attempt by the employer and the union representing the Naples truck drivers to resolve the issue.

The employee then challenged the implementation of the Cell Phone Policy, as well as the other policies identified above.

NLRB Reverses ALJ and Upholds Workplace Rules and Suspension/Termination of Employee

Both the Board and ALJ applied the same standard for determining whether a facially neutral work rule, reasonably interpreted, would unlawfully interfere with, restrain or coerce employees in the exercise of their Section 7 rights.  See The Boeing Company, 365 NLRB No. 154 (2017).  Since the Boeing decision, the Board now evaluates the potential impact of the rule on Section 7 rights and the employer’s proffered justification; in so doing, the Board has delineated three categories of rules that represent classification of results from the Board’s application of the new test:  category one (always lawful) because (a) the rule does not interfere with Section 7 rights or (b) the potential adverse impact on protected rights is outweighed by justifications associated with the rule); two (individualized scrutiny warranted); and three (always unlawful).

We summarize the Board’s findings below, and identify which category of rule the Board placed each of the policies at issue.

Employer’s Cell Phone Policy Restricting Use While Driving Was Lawful

Because the employer’s cell phone policy focuses on safe driving practices by prohibiting the presence of cell phones in the cabs of commercial vehicles and/or heavy equipment vehicles (weighing 10,000 pounds or more), the Board reversed the ALJ and found the policy lawful.  The Board concluded that employees would not reasonably interpret the rule as interfering with their Section 7 rights, as the cell phone restriction does not prohibit employees from communicating during non-work hours.  Moreover, the policy ensures the safety of drivers and the general public by drawing awareness to the dangers of distracted driving and prohibiting the device that enables such behavior.

In finding that the policy was lawful (in Category 1(a)), the Board emphasized that “employees are not guaranteed the right to use every method of communication available to them to discuss their terms and conditions of employment.”  Because the cell phone policy was lawful, the employer was justified in suspending and discharging the employee who violated the policy. (As an aside, the ALJ found virtually nothing in the employee’s testimony to be credible and so the judge’s decision rested exclusively on the lawfulness of the policy).  The Board reversed the ALJ and upheld the suspension and discharge.

Employer’s Electronic Communications Policy Limiting Use of Company Email Was Valid

The Board again reversed the ALJ, but largely due to the change in NLRB precedent between the ALJ ruling and the instant Board decision.  The ALJ applied Purple Communications, 361 NLRB 1050 (2014), and found that the employer unlawfully banned employee use of the company email system for personal use during non-work time.  Since the ALJ decision, the Board reversed Purple Communications, in Caesars Entertainment Corp., 368 NLRB No. 143 (2019), which reinstated the principle that employees have no statutory right to use employer email systems for Section 7 purposes in a typical workplace.  Because Caesars Entertainment Corp. applies retroactively to all pending cases, the Board reversed the ALJ, holding that the employer’s facially-neutral policy that restricts employees’ personal use of company email systems is lawful.

Confidentiality Agreement is Lawful under the Boeing Analysis

The Board concluded that the employees would not reasonably interpret the confidentiality agreement to potentially interfere with the exercise of Section 7 rights, even though the agreement prohibits the disclosure of company information, including but not limited to, earnings and employee information.  The Board reiterated that the analysis considers the perspective of an “objectively reasonable employee,” and the policy must be read as a whole.  Given this backdrop, the Board concluded that because the policy focuses on the disclosure of the company’s proprietary business information, and does not specifically prohibit disclosure of employees’ wages, contact information or other terms and conditions of employment that would be generally known or accessible from other sources, the policy fit within Boeing Category 1(a).

Board Hints That It Is Taking Aim At Recent Cases Requiring Bargaining Before Discipline

The case contained an allegation that the employer violated its duty to bargain in good faith by not giving notice of its intent to discipline and discharge the employee for violating the use of cell phones.  This rule, which did not so much overrule prior precedent as much as it created a new obligation, requires bargaining over discipline and discharge in first time contract situations.  We have reported on this issue here and here.  The Board in this case severed the allegation which is a sure sign that the new obligation will be eliminated in the near future.

Takeaways

The decision of the Board in this case demonstrates how even under the relaxed scrutiny of handbook provisions, reasonable minds can differ as to lawfulness of a policy.  The ALJ and Board both applied Boeing to the policies at issue but came to opposite conclusions. Here the employee was completely discredited and so the the case rested on the interpretation of a policy, which there is no suggestion was applied in a discriminatory fashion. This may suggest there is more work to be done in creating a legal standard to address common workplace policies.

Still, this decision is consistent with a recent line of cases applying Boeing’s work rule test to uphold routine common sense policies that an objectively reasonable employee would find do not interfere with his or her Section 7 rights to engage in concerted activity for the purpose of collective bargaining or other mutual aid or protection. Most unions have actively avoided going to the NLRB over such policies in recent months hoping to avoid decisions such as this one.

This decision also provides several illustrative examples of the types of rules that will be upheld, particularly rules designed to limit distracted driving and enhance workplace safety.  It bears watching whether another case with similar work rules in different workplace scenarios reaches the Board this term, so stay tuned!

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