National Labor Relations Board (NLRB) Update/media/files/... · employers to gross up back pay...
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National Labor Relations Board (NLRB) Update
The Impact of Noel Canning, Employee Handbook Policies Under Siege, and What’s Ahead
SPB Labor & Employment Webinar Series August 13, 2014
Dan Pasternak
Lew Clark
Mike Hanna
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NLRB v. Noel Canning - what it held, what it means, and what to expect
NLRB and ALJ decisions addressing employer policies
Workplace Conduct and Behavior
Confidentiality
Dress Codes and Uniforms
Off-Duty Employee Access
Social Media
Key Labor Policy Issues Under NLRB Review
Agenda
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NLRB issues decision in February 2012 finding that Washington state Pepsi
bottler Noel Canning committed unfair labor practices; Noel Canning appeals
Noel Canning’s argument
US Supreme Court issues decision on June 26, 2014 (134 S. Ct. 2550)
President lacked constitutional authority to appoint NLRB members during a 3-day
Senate recess in January 2012
Because these recess appointments were invalid, the NLRB had only two validly-
appointed members after January 2012
Supreme Court’s 2010 decision in New Process Steel held that the NLRB cannot act
without a three-member quorum
Full set of new NLRB members not confirmed until August 2013
The result: all NLRB decisions issued between January 2012 and August 2013
are void (including the decision finding against Noel Canning)
NLRB v. Noel Canning
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Some of the key cases invalidated by Noel Canning:
- Banner Estrella Medical Center, 358 NLRB No. 93 (July 30, 2012) (confidentiality during
employer investigations)
- Fresenius USA Manufacturing, 358 NLRB No. 138 (September 19, 2012) (shielding
employee from discipline for misconduct while engaged in protected concerted activity)
- Costco Wholesale Corp., 358 NLRB No. 106 (September 7, 2012) (restriction in social media
policy against statements defaming, disparaging, or damaging the company held overbroad
restriction on Section 7 rights)
- Karl Knauz Motors, Inc., 358 NLRB No. 164 (September 28, 2012) (employer’s policy
encouraging courtesy to customers and coworkers held overbroad and unlawful)
- WKYC-TV, Gannet Co., 359 NLRB No. 30 (December 12, 2012) (overturning 50+ years of
precedent, held employers must continue to deduct and remit union dues following expiration
of a collective bargaining agreement)
- Alan Ritchey, Inc., 359 NLRB No. 40 (December 14, 2012) (NLRB holds for the first time that
an employer must bargain with a newly-certified union before imposing discretionary
employee discipline during the period before negotiating a first collective bargaining
agreement)
- Piedmont Gardens, 359 NLRB No. 46 (December 15, 2012) (overruling a 35-year old case,
Board holds that employers must provide unions with witness statements obtained during an
employer’s investigation of employee misconduct)
NLRB v. Noel Canning
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Now what?
NLRB requests remand of certain cases pending before courts of appeal
July 2014 – NLRB “ratifies” all administrative, personnel, and procurement actions
taken by improperly constituted Board – but not decisions
• Includes several Regional Director appointments
• Regional Directors in turn ratify all actions taken by them, including ULP complaints issued
and election results certified
• Problem solved?
NLRB to reissue decisions
• Same old, same old … or from bad to worse?
• Example: Don Chavas, LLC dba Tortillas Don Chavas, 361 NLRB No. 10 (August 8, 2014):
NLRB noted invalidity of Latino Express, Inc., 359 NLRB No. 44 (2012), which required
employers to gross up back pay awards to cover tax liability and to report back pay earnings
to SSA – NLRB “reconsiders” the issue and reaffirms principles as “effectuating the purposes
and policies of the Act”
Additional discussion of the constitutional law issues is available at SPB’s
Employment Law Worldview blog @ http://bit.ly/1k5RbC3
NLRB v. Noel Canning
Employer Policies under Attack
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The Governing Standard
Section 7 of the NLRA protects employees who engage in concerted activities for the
purpose of collective bargaining or other mutual aid or protection
Protections also apply to employer policies that restrict or impair, or may restrict or
impair, the exercise of rights protected by the Act
Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004)
If a rule explicitly restricts protected activity, it is unlawful
If it does not explicitly restrict protected activity, it is unlawful if –
• Employees would reasonably construe the language to prohibit Section 7 activity; or
• The rule was promulgated in response to union activity; or
• The rule has been applied to restrict the exercise of Section 7 rights
• Both an objective and a subjective component: did the employees construe the policy to
restrict protected activity, and would a reasonably employee interpret it to do so?
• Admonition in later cases that, when applying this standard, to review the policy as a whole,
and not to parse out individual words and phrases
Employer Policies Under Attack
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Hills and Dales General Hospital, 360 NLRB No. 70 (Apr. 1, 2014)
Policy prohibiting “Negative Comments”
Company’s values and standards of behavior policy challenged
No “negative comments about our fellow team members”
Employees are to “represent [the company] in the community in a positive and
professional manner in every opportunity”
Employees “will not engage in or listen to negativity or gossip”
NLRB: each provision violated Section 7
Prohibitions against “negative comments” are per se unlawful
Rule requiring employees to represent the employer in the community “in a positive
and professional manner” also unlawful (reversing the ALJ)
Workplace Conduct & Behavior Rules
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Laurus Technical Institute, 360 NLRB No. 133 (June 13, 2014)
No Gossip Policy
Policy prohibited discussing someone’s personal life when the person is not
present, talking about a person’s professional life without his supervisor
present, and creating or sharing rumors.
NLRB: too broad; too vague; ambiguous
Interfered with the school’s employees’ ability to exercise their Section 7 rights
Restricted employees from discussing or complaining about terms and
conditions of employment
Workplace Conduct & Behavior Rules
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Hoot Winc d/b/a Hooters of Ontario Mills, JD(ATL)-17-14 (May 19, 2014)
Rules Prohibiting Insubordination and Lack of Respect
Company rule provided that insubordination to a manager or lack of respect or
cooperation with fellow employees or guests may result in discipline
ALJ: too broad; too subjective
Chilling effect on the exercise of Section 7 rights
Even the rule prohibiting “disrespect to guests” was too broad and unqualified
Workplace Conduct & Behavior Rules
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First Transit, Inc., 360 NLRB No. 72 (April 2, 2014)
Discourteous or Inappropriate Behavior Policy
Prohibition against the use of company property for activities not related to
work: unlawful
Prohibition against “poor work habits,” including wasting time, loafing and
excessive visiting: unlawful
Prohibition against discourteous or inappropriate attitudes or behavior: unlawful
Prohibition against profane or abusive language that is uncivil, insulting,
contemptuous, vicious or malicious: lawful
Workplace Conduct & Behavior Rules
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Copper River of Boiling Springs, LLC, 360 NLRB No. 60 (Feb. 28, 2014)
Displaying a Negative Attitude
Rule prohibited employees from “displaying a negative attitude” when
interacting with coworkers or customers found to be lawful
The rule was limited to negative attitudes that are “disruptive to staff or [have] a
negative impact on guests.”
The grain of salt…
Workplace Conduct & Behavior Rules
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Flex Frac Logistics , LLC I and II, 358 NLRB No. 127 (Sep. 11, 2012); 360
NLRB No. 120 (May 30, 2014)
Company required employees to sign one-page employment at-will
agreement that in part prohibited employees from releasing “confidential
information” which included “personnel information and documents”
Employees were prohibited from disclosure of this information to persons
“outside of the organization.” Violations could lead to disciplinary action up to
and including termination
NLRB: applying Lutheran Heritage standard, policy held over broad and
infringement on employees’ Section 7 rights
Confidentiality Policies
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MCPc, Inc., 360 NLRB No. 29 (Feb. 6, 2014)
Company handbook policy prohibited employees from dissemination of
confidential information within the company such as personal or financial
information and threatened disciplinary action up to and including termination
At a team building meeting an employee complained about a heavy
workload and that more employees should be hired. In course of discussion,
employee mentioned that if the company had not paid one of its new
executives $400,000, it could have hired more employees. Soon thereafter,
the employee was terminated
NLRB found the policy to be overly broad, and further found the Company
violated Section 8(a)(1) when it terminated the employee for violating the
overly-broad policy
Confidentiality Policies
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Fresh & Easy Neighborhood Market, 361 NLRB No. 8 (July 31, 2014)
Company maintained a “Confidentiality and Data Protection Policy” in its Code
of Business Conduct” – not an employee handbook
Policy required that customer and employee information be kept secure and
that information be used “fairly, lawfully and only for the purpose for which it
was obtained”
ALJ found no violation, holding the Code was dedicated to ethical matters and
in no way resembled an employee handbook dealing with working conditions
NLRB rejected the ALJ decision finding the policy was overly broad and could
reasonably be construed by an employee to infringe on his/her Section 7 rights
Decision shows the importance of context and limiting language. The context
and its relationship to legitimate employers concerns must be clear and must
inform the employees that the rule’s scope its not as broad as it might seem
Confidentiality Policies
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Tiffany and Co., JD(NY)-31-14 (Aug. 5, 2014)
Three policies at issue – one prohibited the disclosure of names, addresses, etc. of employees and
employee lists; the second required media requests be directed to the VP of Public Relations or
Investor Relations; the third prohibited disclosure of wage and benefit information
Case is most interesting for its discussion of the “savings clause” in the handbook
Savings clause that stated the policies did not apply to employees who “speak, write or
communicate with fellow employees … in the exercise of their statutory rights to organize or to act
for their individual or mutual benefit under the National Labor Relations Act….”
ALJ found the savings clause prevented a finding of a violation with regard to the policy on
disclosure of wages and benefits, finding the clause expressly addressed that policy. However, the
ALJ found the clause did not specifically reference the disclosure of employees names and
addresses, and did not specifically address the media inquiry provision
ALJ found that “an employer may not specifically prohibit employee activity protected by the Act
and then seek to escape the consequences … by a general reference to rights protected by the
Act”
ALJ also noted that as the drafter of the policies, it was incumbent on the employer to avoid any
lack of clarity
Confidentiality Policies
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Target Corporation, 359 NLRB No. 103 (Apr. 26, 2013)
Policy prohibited Target associates from wearing “any buttons or logos on
[their] clothing (unless approved by [their] team leader).”
Employees’ right to wear union buttons protected since 1945 (Republic
Aviation), unless special circumstances exist
Special circumstances exist where the button may jeopardize employee safety,
damage equipment or products, exacerbate employee dissention or
unreasonably interfere with a public image which the employer has established
as part of its business plan through appearance rules for its employees.
Customer contact and uniform requirements (red shirt and khaki pants) not
special circumstances
Target permitted other buttons and pins without concern over public image
Dress Codes & Uniform Policies
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World Color (USA) Corp., 360 NLRB No. 37 (Feb. 12, 2014)
Policy prohibited wearing baseball caps other than company-logo caps
Prohibited on its face wearing of caps with union insignia
Any rule that limits an employee’s right to wear a union insignia at work is
presumptively invalid
No special circumstances - no safety features in company cap; no legitimate
concerns over gang colors/insignias/activity; no customer interaction
Take-away: reasonable uniform policies or dress codes that place restrictions
based on legitimate business justifications will be deemed lawful; those that
seek to prevent employee expression without legitimate business justification
will not
Dress Codes & Uniform Policies
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HealthBridge Management, LLC, 360 NLRB No. 118 (June 22, 2014)
NLRB had issued a complaint against HealthBridge for alleged unlawful
activities
After the complaint issued, the Union prepared flyers and stickers - “Busted”
Employees directed to remove both the flyers and stickers
General rule is employees have a right to wear union insignias in the absence
of a special circumstance
The Board has a special rule for healthcare institutions
Restrictions in patient care areas are presumptively valid
Restrictions in non-patient areas are presumptively invalid
Selective enforcement will render a presumptively valid rule invalid
Dress Codes & Uniform Policies
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Rule restricting employees from being on the employer’s property when not
actively on duty.
Tri-County Medical Center, 222 NLRB 1089 (1976)
NLRB balances employer’s property rights with employees’ right to engage in
Section 7 activities.
An off-duty access policy is valid only if it:
limits access solely with respect to the interior of the facility and other working areas;
is clearly disseminated to all employees; and
applies to off-duty employees seeking access to the plant for any purpose and not just
to those engaging in union activity
Recent cases have focused on the third prong of Tri-County
Off-Duty Access Rules
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Remington Lodge & Hospitality, LLC, 359 NLRB No. 95 (Apr. 24, 2013)
Rule prohibited employees from returning to the hotel before or after working
hours without authorization from their manager
NLRB: rule which preconditions management approval to engage in union or
concerted activity on the employee’s off-duty hours and in non-work areas is
presumptively unlawful
Off-Duty Access Rules
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St. John’s Health Center, 357 NLRB No. 170 (Dec. 30, 2011)
St. John’s had a general policy that prohibited access to most of the interior of
the building
Rule did not prohibit off-duty access for all purposes; allowed attendance at
Health Center sponsored events, i.e., retirement parties, baby showers, etc.
NLRB: policy was unlawfully applied because it not uniformly applied to
prohibit access to off-duty employees seeking entry to the property for any
purpose
In other words, no good deed goes unpunished.
Off-Duty Access Rules
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Sodexho America LLC, 358 NLRB No. 79 (July 3, 2012)
NLRB: to the extent a rule is ambiguous, it will be construed against the
drafter
Rule prohibited all off-duty access unless to visit a patient or to receive medical
care; NLRB held the rule did not violate third prong of Tri-County requiring that
the no access policy be uniformly enforced
Off-Duty Access Rules
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Piedmont Gardens, 360 NLRB No. 100 (May 1, 2014)
“No employees are allowed inside the building when not scheduled to work
unless they have the prior approval of their supervisor/manager, Human
Resources or the Executive Director”
The Union representative wanted to meet with the HR Director to discuss some
issues and wanted several off-duty employees to attend. The request was
refused based upon the Company’s policy
NLRB: policy gave management “unlimited discretion” as to when off-duty
employees would be permitted on the premises, and thus was invalid
Off-Duty Access Rules
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General Counsel Memorandum OM 12-59 (May 2012)
Addressed social media policies, unlike two previous General Counsel
Memoranda that discussed situations where employees were disciplined or
discharged for engaging in social media-related activity
Purported to delineate what the General Counsel believed employers could
lawfully prohibit within policies restricting employees’ use of social media
Included a sample “lawful” social media policy
Social Media
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Kroger Co. of Michigan, JD-21-14 (Apr. 22, 2014)
Social media policy required that employees use a disclaimer whenever the
employees spoke on social media about work-related issues, clarifying that the
employee was setting forth his or her personal view and not speaking on behalf
of the company
ALJ: disclaimer requirement placed an “undue burden” on employees’ right to
communicate as protected by the Act
Other restrictions in Kroger’s social media policy prohibiting the use of the
Company’s intellectual property, and restricting online comments about
rumors, speculation, personnel matters, and the company’s business plans,
also were overbroad and unlawful
Social Media
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Durham School Services, L.P., 360 NLRB No. 85 (Apr. 25, 2014)
NLRB sets aside employer win in a union representation election, partly
because of the social media policy in the employer’s handbook
Policies advised employees to “limit their contact with parents or school
officials” via social media, to keep any such contact “appropriate, professional,
and respectful,” and warned against “publicly sharing unfavorable information.”
ALJ: policies overbroad and vague, and tended to chill employees’ exercise of
protected rights because they did not define what type of conduct would
constitute violation of the policy; NLRB affirms
Hyperlinks and QR codes
Social Media
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Landry’s, Inc., JD(SF)-31-14 (June 26, 2014)
NLRB General Counsel alleged that the following social media policy was
unlawful: • While your free time is generally not subject to any restriction by the Company, the Company
urges all employees not to post information regarding the Company, their jobs, or other
employees which could lead to morale issues in the workplace or detrimentally affect the
Company’s business. This can be accomplished by always thinking before you post, being
civil to others and their opinions, and not posting personal information about others unless
you have received their permission.
ALJ found this policy was lawful
And that’s all I have to say about that…
Social Media
What’s Ahead:
Key Labor Policy Issues Under Review
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Initially proposed in 2011, then withdrawn after NLRB lost court challenge
Rules re-proposed in February 2014
Will shorten the time for employers to campaign against unionization to as few
as 10 days. No 25-day waiting period before holding an election
Employers will have to file a Statement of Position within 7 days or waive all
election-related issues
Will let workers vote even if eligibility is challenged, postponing challenges until
after the election
Employers will no longer have an automatic review of contested issues
Representation Case Rules - “Ambush Election”
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Roundy’s, Inc., 356 NLRB No. 27 (Nov. 12, 2010)
Involves employer’s property rights and right to exclude non-employees from premises
Current standard comes from Sandusky Mall Co., 329 NLRB 618, 623 (1999)
NLRB: since the management of Sandusky Mall allowed general usage of its property by
outside groups, it could not make an exception for unions
Reversed on appeal (also Salmon Run): discrimination involves treating like groups differently
OK to allow Girl Scouts and exclude unions because Girl Scouts and unions are not like groups; not
discrimination.
NLRB held Roundy’s could not prevent union organizers from passing out handbills in
common areas adjoining its stores where the company held a nonexclusive easement;
it could only order organizers off store property where it held an exclusive easement
Complicated procedural history: oldest case current pending in front of the NLRB
(originally filed 2005); amicus brief deadline was in December 2010
Non-Employee Access
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Purple Communications, Inc., Cases 21-CA-095151; 21-RC-091531; -091584
In Register Guard, a decision issued under the Bush administration in 2007, the Board
held employees have no statutory right to utilize employer-owned equipment or facilities,
including email systems, to engage in activity protected by Section 7 of the National
Labor Relations Act, including the right to form or assist a union in organizing an
employer’s employees
In Purple Communication, at issue was an employer policy that prohibited employees
from using electronic systems or equipment for non-work purposes
ALJ applied Register Guard and held the employer could lawfully limit the use of its email
systems in that manner
However, the NLRB’s General Counsel decided to appeal the ruling. The NLRB then
invited briefs from interested parties regarding issues presented in the case:
If the NLRB reverses the ALJ’s decision in Purple Communications and overturns
Register Guard, employees and perhaps even unions may be allowed to utilize
employer-provided email systems to organize
Given that many employers currently prohibit this type of use through employment
policies, such a decision would likely require that employers reevaluate and revise
employment policies limiting email use
Employee Use of Employer Email Systems
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The current joint employer standard
Two or more business entities that are separate may be joint employers when they share
or codetermine those matters governing employees’ essential terms and conditions of
employment. Typically, this requires a showing that the putative joint employer
“meaningfully affects matters relating to the employment relationship such as hiring,
firing, discipline, supervision and direction.”
The new proposed standard
The NLRB’s General Counsel has urged the NLRB to adopt a broader standard. The
proposed new standard would find a joint employer relationship if “under the totality of
the circumstances, including the way the separate entities have structured their
commercial relationship, the putative joint employer wields sufficient influence over the
working conditions of the other entity’s employees such that meaningful bargaining could
not occur in its absence.” As the General Counsel described it, this would result in a
joint employer finding whenever “industrial realities” make an entity essential for
meaningful bargaining.
Potential huge impact in the employee leasing and temporary employee provider areas.
Joint Employer Standard
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NLRB invited briefs on this issue in Browning-Ferris Industries (Case 32-RC-
109684)
On July 29, 2014, the NLRB General Counsel issued a press release
suggesting that he would seek to pursue unfair labor practice charges against
McDonald’s franchisees – as well as against the franchisor, McDonald’s USA,
LLC, as an alleged joint employer.
The announcement appears to be part of the ongoing effort to broaden the joint
employer standard. By publicly announcing an effort to target McDonald’s, the
General Counsel is signaling that he believes McDonald’s, as a franchisor, will
qualify as a joint employer under the new proposed standard. This has
significant implications not only for McDonald’s, but for all franchisors, as well
as other companies.
Joint Employer Standard
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Northwestern University, Case 13-RC-121359
January 2014: CAPA files a petition seeking to represent scholarship football
players in collective bargaining (bargaining would be limited in scope)
NU and NCAA oppose – athletes not employees; contrary to the model of
amateur and collegiate athletics
March 26, 2014 – NLRB Regional Director issues decision finding that players
are more akin to employees than athletes and directs election
April 24, 2014 – NLRB grants NU’s request for review, but doesn’t stay election
(election held on April 25, 2014, but ballots impounded)
Impacts only private universities, not state schools
August 8, 2014 – O’Bannon v. NCAA – federal judge issues injunction
prohibiting NCAA from imposing rules restricting collegiate athletes from
profiting off of their name, image, or likeness: trend away from pure
amateurism – NLRB ruling next logical step?
Collegiate Athletics
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Lew Clark
Partner
(602) 528-4065 [email protected]
Mike Hanna
Partner
(216) 479-8699 [email protected]
Dan Pasternak
Partner
(602) 528-4187 [email protected]
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