The case is important because it may lead to more employee misclassification claims, unionization, and greater protection for workers under the NLRA.

Background

Section 2(3) of the NLRA excludes independent contractors from statutory coverage. In 2014, the Board in FedEx Home Delivery, 361 NLRB 610 (FedEx II) “reaffirmed [its] longstanding commitment” to the “nonexhaustive common-law factors enumerated in the Restatement (Second) of Agency” for determining independent contractor status. These factors include:

• • The extent of control which, by the agreement, the master may exercise over the details of the work.
  • Whether or not the one employed is engaged in a distinct occupation or business.
  • The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision.
  • The skill required in the particular occupation.
  • Whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work.
  • The length of time for which the person is employed.
  • The method of payment, whether by the time or by the job.
  • Whether or not the work is a part of the regular business of the employer.
  • Whether or not the parties believe they are creating the relation of master and servant.
  • Whether the principal is or is not in business.

In FedEx II, the Board further explained it has historically considered whether putative contractors have a “significant entrepreneurial opportunity for gain or loss.” Related to this question, the Board assessed whether the putative contractors had the ability to work for other companies, could hire their own employees, and had a proprietary interest in their work. The Board weighed these considerations alongside the Restatement’s factors, but “without assigning them any special significance or weight.” “Entrepreneurial opportunity,” the Board held, “represents 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.”

In 2019, the Board in SuperShuttle DFW, Inc., 367 NLRB No. 75, overruled FedEx II and held that “entrepreneurial opportunity” is the “principle by which to evaluate the overall effect of the common-law factors on a putative contractor’s independence to pursue economic gain.” The Board explained that FedEx II did not give proper consideration to the significance of a worker’s “entrepreneurial opportunity for gain or loss.” Thus, under the Board’s SuperShuttle standard, all common-law factors were evaluated “through the prism of entrepreneurial opportunity.”

For example, in SuperShuttle, the Board found that drivers of airport shuttle vehicles were independent contractors because they had significant opportunity for economic gain due to their autonomy in setting their work schedules, their discretion to own or lease vans, and other decisions that impacted the amount of revenue they took in.

NLRB Overrules SuperShuttle and Returns to Approach Outlined in FedEx II

In The Atlanta Opera, Inc., the NLRB overturned its SuperShuttle decision, in which the Board had held that a worker’s entrepreneurial opportunity for gain or loss should be the “animating principle” of the independent-contractor test. Instead, the Board returned to its approach outlined in FedEx II, under which a number of common law factors are analyzed to determine whether a worker is an independent contractor or an employee.

The Board in The Atlanta Opera explained that a worker’s entrepreneurial opportunity would still be considered. However, the Board stated that only “actual (not merely theoretical) entrepreneurial opportunity” should be given weight, and it is necessary to “evaluate the constraints imposed by a company on the individual’s ability to pursue this opportunity.” Thus, “if a company offers its workers entrepreneurial opportunities that they cannot realistically take, then that does not add any weight to the company’s claim that the workers are independent contractors.” The Board stated it will consider:

not only whether the putative contractor has a significant entrepreneurial opportunity, but also whether the putative contractor: (a) has a realistic ability to work for other companies; (b) has proprietary or ownership interest in their work; and (c) has control over important business decisions, such as the scheduling of performance; the hiring, selection, and assignment of employees; the purchase and use of equipment; and the commitment of capital. This factor synthesizes the full constellation of considerations that the Board has addressed under the rubric of entrepreneurialism. At the same time, the Board will continue to give full consideration and appropriate weight to all of the traditional common-law factors. As with all other relevant factors, the weight given to whether a putative contractor renders services as part of an independent contract business will depend upon the factual circumstances of the particular case.

Finally, the Board held that it will apply its holding retroactively to all pending cases.

Bottom Line

In overturning its decision in SuperShuttle and returning to the standard outlined in FedEx II, the Board opens the door to more workers being classified as employees and falling within the NLRA’s coverage. Accordingly, Employers should consult with their trusted Felhaber labor counsel and reevaluate whether their workers truly constitute independent contractors.

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The case is important because an employee who engages in “workplace misconduct” may be insulated from discipline if the misconduct took place in connection with activity protected by the NLRA.

Background

In 2020, the Board in General Motors LLC, 369 NLRB No. 127 (2020), eliminated the “setting-specific standards” and concluded that “abusive conduct” is separable from the related Section 7 activity.  Instead, the Board found that the causation analysis of the Board’s decision in Wright Line should be applied because there was a dispute over whether the discipline was motivated by activity protected by the NLRA or the “abusive conduct.”  According to the Board, “[u]nder this approach, the Board will properly find an unfair labor practice for an employer’s discipline following abusive conduct committed in the course of Section 7 activity when the General Counsel shows that the Section 7 activity was a motivating factor in the discipline, and the employer fails to show that it would have issued the same discipline even in the absence of the related Section 7 activity.”

The Board’s General Motors decision overruled three context-specific standards previously established by the Board: (1) the four-factor test in Atlantic Steel, 245 NLRB 814 (1979), which governed employees’ conduct towards management in the workplace; (2) the totality-of-the-circumstances test in Pier Sixty, LLC, 362 NLRB 505, 506 (2015), which governed social-media posts and most cases involving conversations among employees in the workplace; and (3) the standard in Clear Pine Mouldings, Inc., 268 NLRB 1044 (1984), which governed picket-line conduct.

Board Finds that NLRA Provides Room for “Employee Misconduct”

In Lion Elastomers, the Board overruled the Board’s decision in General Motors, explaining:

In erasing the fundamental distinction between misconduct committed during protected activity and misconduct unconnected with such activity, the General Motors Board abandoned the Board’s statutory function of determining the scope of protection for Section 7 activity. It instead granted new power to employers to effectively determine, based on their own individual practices and preferences, the scope of protected activity under the National Labor Relations Act. Moreover, because the General Motors Board failed to define “abusive conduct,” it failed to cabin its decision to those instances involving only the most extreme misconduct and made Wright Line and the managerial prerogatives attached to it applicable whenever an employer ostensibly disciplines or discharges an employee for any “separable” conduct in the course of Section 7 activity.

. . .

Whatever the particular setting, the elevation of “civility” as a supposed statutory goal gives employers dangerous discretionary power over employees whenever they exercise their statutory rights in opposition to the employer’s interests. But just as Title VII is not “a general civility code for the American workplace,” neither is the National Labor Relations Act. It imposes no obligation on employees to be “civil” in exercising their statutory rights. And while the Act has always been understood to recognize that employers have a legitimate interest in maintaining order and respect in the workplace, it also authorizes the Board to balance that interest against employees’ Section 7 rights.[] Put somewhat differently, the Board–not employers–referees the exercise of protected activity under the Act.

Thus, the Board restored the “context-specific standards” established by the Board in (1) Atlantic Steel, 245 NLRB 814 (1979), (2) Pier Sixty, LLC, 362 NLRB 505, 506 (2015), and (3) Clear Pine Mouldings, Inc., 268 NLRB 1044 (1984).  As a result, if an employee engages in “misconduct” during the employee’s exercise of protected concerted activity, the NLRB will utilize these context-specific tests to establish whether the employee’s conduct lost the protection of the NLRA.

For example, prior to 2020, the Board issued several decisions finding that employees who engaged in “employment misconduct” were protected from discipline by the NLRA because their misconduct took place as part of activities protected by the NLRA:

• • Tampa Tribune, 351 NLRB 1324 (2007)—The Board found that an employee’s reference to a vice president as a “stupid f****** moron” retained protection of the NLRA under the four-factor test in Atlantic Steel.
  • Starbucks Corp., 355 NLRB 636 (2010)—The Board found that an employee yelling at an off-duty manager in front of customers that “[y]ou can go f*** yourself, if you want to f*** me up, go ahead, I’m here,” did not lose the protection of the NLRA under the four-factor test in Atlantic Steel.
  • Felix Industries, 331 NLRB 144 (2000)—The Board found that an employee who called his supervisor a “f****** kid” three times and insisted he did not have to listen to him did not lose the protection of the NLRA under the four-factor test in Atlantic Steel.
  • Cooper Tire & Rubber Co., 363 NLRB 1952 (2016)—The Board found that a picketer who said to black replacement workers, “Hey, did you bring enough KFC for everyone?” and “Hey, anybody smell that? I smell fried chicken and watermelon,” did not lose the protection of the Act under Clear Pine Mouldings.

Bottom Line

In overturning the Board’s decision in General Motors, the Board muddies the water regarding the discipline of employees for workplace misconduct if the misconduct occurs in connection with activity otherwise protected by the NLRA.  Thus, employers should exercise caution and consult with experienced labor counsel if they are faced with a disciplinary issue that also involves activity protected by the NLRA.

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The decision signals that the Board will carefully scrutinize employer policies and separation agreements that purportedly impact employees’ Section 7 rights.  That is, employees’ right to discuss the terms and conditions of their employment with their coworkers.

Background

The employer, a hospital in Michigan, employed approximately 2300 employees.  In 2019, the union was certified as the bargaining representative for service employees at the hospital.  In the middle of the COVID-19 pandemic, and before the parties had bargained a contract, the hospital permanently furloughed 11 bargaining unit employees.

The hospital failed to notify or negotiate with the union over the effects of the decision and, to the exclusion of the union, offered the 11 employees severance agreements that included the following provisions:

[Confidentiality Provision]

The Employee acknowledges that the terms of this Agreement are confidential and agrees not to disclose them to any third person, other than spouse, or as necessary to professional advisors for the purposes of obtaining legal counsel or tax advice, or unless legally compelled to do so by a court or administrative agency of competent jurisdiction.

[Non-Disparagement Provision]

At all times hereafter, the Employee agrees not to make statements to the Employer’s employees or to the general public which could disparage or harm the image of the Employer, its parent and affiliated entities and their officers, directors, employees, agents and representatives.

An administrative law judge (“ALJ”) had no problem finding the hospital to have violated Section 8(a)(5) by failing to bargain with the union over the furloughs and engaging in “direct dealing” by offering the severance agreements to employees without involving the union.

Nevertheless, the ALJ concluded that the confidentiality and non-disparagement provisions did not violate Section 8(a)(1) under the NLRB’s decision in Baylor University Medical Center, 369 NLRB No. 43 (2020).  The NLRB’s General Counsel appealed the ALJ’s decision to the Board.

The Board Finds that the Confidentiality and Non-Disparagement Clauses Violated Federal Labor Law

After overruling its 2020 decision in Baylor University, the Board held that an employer commits an independent violation of Section 8(a)(1) of the NLRA “when it proffers a severance agreement with provisions that would restrict employees’ exercise of their NLRA rights.”  The Board reasoned:

The nondisparagement provision on its face substantially interferes with employees’ Section 7 rights. Public statements by employees about the workplace are central to the exercise of employee rights under the Act. Yet the broad provision at issue here prohibits the employee from making any “statements to [the] Employer’s employees or to the general public which could disparage or harm the image of [the] Employer”—including, it would seem, any statement asserting that the Respondent had violated the Act (as by, for example, proffering a settlement agreement with unlawful provisions). . . .

Further, the ban expansively applies to statements not only toward the Respondent but also to “its parents and affiliated entities and their officers, directors, employees, agents and representatives.” The provision further has no temporal limitation but applies “[a]t all times hereafter.” The end result is a sweepingly broad bar that has a clear chilling tendency on the exercise of Section 7 rights by the subject employee. This chilling tendency extends to efforts to assist fellow employees, which would include future cooperation with the Board’s investigation and litigation of unfair labor practices with regard to any matter arising under the NLRA at any time in the future, for fear of violating the severance agreement’s general proscription against disparagement and incurring its very significant sanctions. The same chilling tendency would extend to efforts by furloughed employees to raise or assist complaints about the Respondent with their former coworkers, the Union, the Board, any other government agency, the media, or almost anyone else. In sum, it places a broad restriction on employee protected Section 7 conduct.

As to the confidentiality provision, the Board similarly concluded that it violated Section 8(a)(1):

The provision broadly prohibits the subject employee from disclosing the terms of the agreement “to any third person.” The employee is thus precluded from disclosing even the existence of an unlawful provision contained in the agreement. This proscription would reasonably tend to coerce the employee from filing an unfair labor practice charge or assisting a Board investigation into the Respondent’s use of the severance agreement, including the nondisparagement provision. Such a broad surrender of Section 7 rights contravenes established public policy that all persons with knowledge of unfair labor practices should be free from coercion in cooperating with the Board. The confidentiality provision has an impermissible chilling tendency on the Section 7 rights of all employees because it bars the subject employee from providing information to the Board concerning the Respondent’s unlawful interference with other employees’ statutory rights.

The confidentiality provision would also prohibit the subject employee from discussing the terms of the severance agreement with his former coworkers who could find themselves in a similar predicament facing the decision whether to accept a severance agreement. In this manner, the confidentiality provision impairs the rights of the subject employee’s former coworkers to call upon him for support in comparable circumstances. Additionally encompassed by the confidentiality provision is discussion with the Union concerning the terms of the agreement, or such discussion with a union representing employees where the subject employee may gain subsequent employment, or alternatively seek to participate in organizing, or discussion with future co-workers. A severance agreement is unlawful if it precludes an employee from assisting coworkers with workplace issues concerning their employer, and from communicating with others, including a union, and the Board, about his employment. Conditioning the benefits under a severance agreement on the forfeiture of statutory rights plainly has a reasonable tendency to interfere with, restrain, or coerce the exercise of those rights. unless it is narrowly tailored to respect the range of those rights.

Because the Board concluded that these provisions violated the NLRA, the Board ordered the hospital to “cease and desist” from: (1) “[p]resenting the permanently furloughed employees with a severance agreement prohibiting them from making ‘statements to [the Respondent’s] employees or to the general public which could disparage or harm the image of Employer, its parent and affiliated entities and their officers, directors, employees, agents and representatives’” and (2) “[p]resenting the permanently furloughed employees with a severance agreement prohibiting them from disclosing the terms of the severance agreement ‘to any third person, other than spouse, or as necessary to professional advisors for the purposes of obtaining legal counsel or tax advice, or unless legally compelled to do so by a court or administrative agency of competent jurisdiction.’”

Bottom Line

While the Board’s decision in McLaren Macomb, 372 NLRB No. 58 (Feb. 21, 2023) involved a union employer unlawfully offering severance to union employees, the Board’s analysis of the confidentiality and non-disparagement provisions in the agreements is equally applicable to severance and separation agreements in the non-union context.

Importantly, though, the NLRA does not cover all workers.  Supervisor and managerial employees, as well as true independent contractors, are not covered by the NLRA, so it is unlikely that the decision would apply to separation agreements involving these workers.

As far as next steps, removing confidentiality and non-disparagement provisions from future severance agreements is not necessarily the answer.  Instead, employers will need to review and potentially narrow the restrictions to avoid running afoul of the NLRA.  If the employer has specific concerns regarding trade secrets or other specific confidential information, the agreements should be revised to expressly address the concerns.  Other options include disclaimers and narrowing agreements to avoid running afoul of the NLRA.

Finally, the NLRB’s decision will likely be appealed to the federal appeals court (and perhaps even the Supreme Court), so we have not heard the last on this issue.  Still, when offering an employee severance in the future, employers will still need to consider the NLRB’s new standard.

We will continue to monitor this situation as it develops.

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Given the wave of union organizing throughout the country, employers should be keenly aware that a union may target a smaller portion of its workforce for an organizing campaign.

The “Appropriate” Unit for Bargaining

Under Section 9(a) of the National Labor Relations Act (NLRA), a union can only represent a union that is “appropriate” for the purposes of collective bargaining.  The NLRB is responsible for determining what groups of employees are “appropriate” under the NLRA.

Generally speaking, the larger the bargaining unit, the more difficult it is for a union to organize it.  As a result, after a union files a petition to represent a group of employees (called an RC-petition), the most common dispute is whether, as the employer claims, the unit should be expanded to include additional employees who share a “community of interest” with the petitioned-for unit, or whether the petitioned-for unit is “appropriate.”

Traditionally, the NLRB analyzes certain factors to determine whether a group of employees shares a “community of interest” with a larger group of employees.  These factors address whether the employees:

• • Are organized into a separate department;
  • Have distinct skills and training;
  • Have distinct job functions and perform distinct work, including inquiry into the amount and type of job overlap between classifications;
  • Are functionally integrated with the Employer’s other employees;
  • Have frequent contact with other employees;
  • Interchange with other employees;
  • Have distinct terms and conditions of employment; and
  • Are separately supervised.

These factors are never addressed alone.  Instead, the Board focuses on “whether the interests of the group sought are sufficiently distinct from those of other employees to warrant the establishment of a separate unit.”

The Fight Over “Micro-Units”

In 2011, the NLRB issued a decision in Specialty Healthcare, 357 NLRB 934 (2011), which held that the unit sought to be organized by the union (i.e., the “petitioned-for unit”) is presumptively valid if: (1) those employees “are readily identifiable as a group (based on job classifications, departments, functions, work locations, skills, or similar factors)” and (2) they share a community of interest with each other.

Additional employees can be added to the bargaining unit only if the party seeking to add additional employees (i.e., typically the employer) shows that those employees “share an overwhelming community of interest” with the petitioned-for employees.  The result is that the vast majority of bargaining units – even if they are “micro” in size – are considered “appropriate” under Specialty Healthcare.

The Board overruled Specialty Healthcare in PCC Structurals, Inc., 365 NLRB No. 160 (2017), and The Boeing Company, 368 NLRB No. 67 (2019).  Under the framework established in PCC Structurals and Boeing, the Board first considers whether the employees in a proposed unit share an internal community of interest. Second, the Board considers whether the interests of employees within the proposed unit are sufficiently distinct from the interests of those excluded from the proposed unit. Third, the Board considers any applicable guidelines that the Board has established for the specific industry involved with regard to appropriate unit configurations.

“Micro-Units” Are Back

This week, the NLRB released its opinion in American Steel Construction, Inc., 372 NLRB No. 23 (Dec. 14, 2022).  In American Steel, the Board overruled its decisions in PCC Structurals and Boeing and returned to the standard set forth in Specialty Healthcare.  The Board majority explained:

[B]y making it easier to invalidate a petitioned-for unit based on the supposed interests of excluded employees, PCC Structurals discounted the rights of the employees seeking representation and obscured the core inquiry in such cases: whether the employees in the petitioned-for unit share a community of interest rendering the unit appropriate for the purposes of collective bargaining.

As a result, the Board reinstated its Specialty Healthcare decision and explained that it will find the following units “appropriate” for purposes of bargaining under the NLRA:

[T]he Board will once again approve a petitioned-for “subdivision” of employee classifications if the petitioned-for unit: (1) shares an internal community of interest; (2) is readily identifiable as a group based on job classifications, departments, functions, work locations, skills, or similar factors; and (3) is sufficiently distinct. Of course, the Board need not address each element in every case: if a particular element is not disputed, it need not be adjudicated. But if a party contends that the petitioned-for unit is not sufficiently distinct—i.e., that the smallest appropriate unit contains additional employees—then the Board will apply its traditional community-of-interest factors to determine whether there is an “overwhelming community of interest” between the petitioned-for and excluded employees, such that there is no rational basis for the exclusion. If there are only minimal differences, from the perspective of collective-bargaining, between the petitioned-for employees and a particular classification, then an overwhelming community of interest exists, and that classification must be included in the unit.

Importantly, the Board noted that, as it did in Specialty Healthcare, “this test does not disturb or displace any preexisting rules or presumptions applicable to specific industries or occupations.”

The Board applied its decision retroactively to all pending election cases.

Bottom Line

With Specialty Healthcare again the law of the land, it will be easier for smaller groups of workers to be organized.  Thus, employers should review their workforces and determine what opportunities and practices need to be improved in 2023 to increase employee engagement.  Also, any organizational audit may be helpful to see if your organization is susceptible to a “micro unit.”

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In Thryv, Inc., 372 NLRB No. 22 (Dec. 13, 2022), the Board found that the respondent-employer violated the National Labor Relations Act by unilaterally laying off six employees in violation of the statutory duty to bargain.  When discussing the appropriate remedy for the employer’s violation, the Board noted that its traditional make-whole remedy includes reinstatement and backpay for the affected employees.  However, the Board determined that, “to more fully effectuate the make-whole purpose of the Act,” it would revise its standard make-whole relief to expressly include the direct or foreseeable pecuniary harms suffered by affected employees.  According to the Board, this revised make-whole relief will better “rectify the harms caused by a respondent’s unfair labor practice by attempting to restore the employee to the situation they would have been in but for that unlawful conduct.”

In Thryv, the Board explained:

Where, as here, employees have been laid off in violation of the Act or been the targets of other unfair labor practices, they may incur significant financial costs, such as out-of-pocket medical expenses, credit card debt, or other costs simply in order to make ends meet.  We cannot fairly say that employees have been made whole until they are fully compensated for these kinds of pecuniary harms if the harms were direct or foreseeable consequences of the respondent’s unfair labor practice.

The Board provided several examples of “pecuniary harms” that are the direct or foreseeable result of an employer’s unlawful actions:

• • The legal expenses of an employee who the employer unlawfully ejected from its premises, resulting in the employee being arrested and convicted of disorderly conduct.
  • The cost of an employee’s new clothes after the employer discriminatorily assigned the employee to dirtier and more onerous work, which caused her clothes to be ruined.
  • The medical expenses of an employee who was unlawfully assigned to a job pulling nails, which resulted in aggravation of her carpal-tunnel syndrome.

In an attempt limit the breadth of its holding, the Board explained that any relief “must be specifically calculated” and requires evidence “demonstrating the amount of pecuniary harm, the direct or foreseeable nature of that harm, and why that harm is due to the respondent’s unfair labor practice.”  The respondent will then have the opportunity “to present evidence challenging the amount of money claimed, argue that the harm was not direct or foreseeable, or that it would have occurred regardless of the unfair labor practice.”

In response to the dissent’s argument that this holding opens the door to speculative damages that exceed the Board’s legal authority, the Board majority stated it “will not issue remedial orders for harms which are unquantifiable, speculative, or nonspecific.”  Claimed damages must be supported by evidence such as receipts, invoices, medical bills, and credit card and other financial statements.

The Board held that it would apply this revised policy of make-whole relief “retroactively in this case and in all pending cases in whatever stage.”

Bottom Line

The Board’s holding expands the actions an employer must take to make whole employees who have been affected by an employer’s unfair labor practices.  In addition to traditional remedies of reinstatement and backpay, employers may find themselves on the hook for more attenuated pecuniary harm, so long as that harm is deemed directly related to, or a foreseeable result of, the employer’s unlawful actions.  Given the risk of increased liability, it is more important than ever for employers to speak with their trusted Felhaber attorney before taking employee action.

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In GC Memorandum 23-02, General Counsel Jennifer A. Abruzzo calls for the NLRB to adopt a new, heightened standard preventing employers in union and non-union workplaces “from intrusive and abusive electronic monitoring and automated management practices that would have a tendency to interfere with Section 7 rights.”  In addition to direct interference with union rights during a union organizing campaign, Ms. Abruzzo writes that she will “urge the Board to find that an employer has presumptively violated Section 8(a)(1) of the Act where the employer’s surveillance and management practices, viewed as a whole, would tend to interfere with or prevent a reasonable employee from engaging in activity protected by the Act.” Moreover, Ms. Abruzzo writes that “[i]f the employer’s business need outweighs employees’ Section 7 right, unless the employer demonstrates that special circumstances require covert use of their technologies, [she] will urge the Board to require the employer to disclose to employees the technologies it uses to monitor and manage them, its reasons for doing so, and how it is using the information it obtains.”

To be clear, the new standard advocated by Ms. Abruzzo is not the law.  The NLRB would need to adopt her proposal as part of a decision and, even then, a federal appeals court could determine whether the proposed standard is consistent with the NLRA.

What’s the Current Law on Workplace Monitoring?

Currently, union and non-union employers have very few restrictions on their use of electronic monitoring.  For example, unless there are specific restrictions in a labor contract or under state law, employers are permitted to utilize technologies such as GPS tracking, surveillance cameras, and badge readers.

One important caveat, however, is that union employers need to provide any union representing its workforce with notice and an opportunity to bargain over any new tracking or surveillance device that may result in employee discipline (or otherwise alter employees’ working conditions).  For example, if an employer is going to add GPS tracking devices to its trucks and would use that information to discipline employees for lying about their whereabouts, then they would usually need to give the union notice and an opportunity to bargain over the change.  Anheuser-Busch, Inc., 342 NLRB 560, 560 (2004) (employer violated the Act by failing to bargain with union prior to installation and use of surveillance cameras in the workplace).  This right, of course, can be waived by the union and, if there are no restrictions in the union contract regarding monitoring, then it is unlikely that the union could prevent the employer from implementing the monitoring after exhausting any discussions over the proposed change.

It is also important to note that the employer’s historic use of GPS tracking or surveillance cameras could be evidence of an enforceable past practice.  But, if new cameras are added (or new uses for existing cameras), it is best to give the union notice of the change and be prepared to bargain over the change.  Again, in the absence of a restriction in the CBA, the employer would generally be permitted to move forward with the change.  Thus, it is more of a delay in the timing of the change rather than an impediment to the employer implementing the change.

Bottom Line

At present, in the absence of a state law or CBA restriction, employers have considerable discretion to implement monitoring equipment such as cameras, GPS, and badge readers.  Nevertheless, if Ms. Abruzzo is successful in modifying the legal standard, it is possible that employers will have to rethink or adjust any electronic monitoring of their workforce.

We will continue to monitor this issue as it develops.

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Background

In 1962, the Board held in Bethlehem Steel Co., 136 NLRB 1500 (1962) that the dues checkoff provisions in a collective bargaining agreement (CBA) do not survive expiration.  That is, while the NLRA requires an employer to maintain the “status quo” with respect to most employment terms following expiration – at least until reaching a lawful “impasse” – an employer could unilaterally stop withholding dues as required by the (now) expired CBA.

In 2015, the Board reversed the Bethlehem Steel standard in a case called Lincoln Lutheran of Racine, 362 NLRB 1655 (2015) and held that an employer was required to continue deducting and withholding union dues after expiration.  Then, in 2019, the Board reversed itself again and returned to the Bethlehem Steel standard allowing employers to unilaterally cease withholding dues following contract expiration.  After an appeal, the decision was returned to the Board, which then reversed itself again (and returned to Lincoln Lutheran).

The NLRB Returns to Lincoln Lutheran

In Valley Hospital Medical Center, Inc., 371 NLRB No. 160 (2022), the Board carefully examined its decisions in 1962, 2015, and 2019.  Ultimately, the Board determined that Lincoln Lutheran was correctly decided.  Under the standard set forth in Lincoln Lutheran, an employer must, following CBA expiration, continue to honor a dues-checkoff arrangement established in an expired CBA until: (a) the parties have reached a successor CBA or (b) a valid overall bargaining impasse permits unilateral action by the employer.  Employers may no longer unilaterally terminate dues checkoff.

Valley Hospital

In Valley Hospital, the employer (Valley Hospital) had a CBA with a union that required the employer to deduct dues from employees and remit them to the union.  Approximately 13 months after the parties’ CBA expired, the employer ceased withholding dues.  According to stipulated facts, the employer ceased deducting dues with 5 days’ notice and without providing the union an opportunity to bargain.

Under the standard set forth in Lincoln Lutheran, the Board easily concluded that Valley Hospital violated Section 8(a)(5) and (1) of the Act.  As a remedy, the NLRB ordered the Hospital to reimburse the Union for “any dues [the Union] would have received but for” the employer’s failure to withhold dues.

Critically, the Board also held that it intended to apply its rule in this case retroactively to all current pending cases.  Thus, any employer who unilaterally ceased withholding dues under the 2019 decision will likely be ordered to reimburse the Union for any dues that were not collected by the Union.

Bottom Line

The NLRB has removed an economic weapon for employers to use in bargaining a new CBA by no longer allowing the unilateral cessation dues checkoff provisions once a CBA expires.  While the decision will likely be appealed, it remains to be seen whether a federal appellate court will reverse the NLRB’s decision.

For now, employers with expired CBAs (or CBAs that will soon expire) should avoid halting the collection of union dues.  Depending on your contract language, it may still be possible to cease withholding dues, but such action should not be taken lightly and should only be done with guidance from counsel.

We will continue to monitor this situation closely.

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Background

The case, College Bound Dorchester, involved workers at a Boston education-related nonprofit who participated in a mail-ballot election last summer to determine whether they would unionize with a Service Employees International Union affiliate.  Six workers voted in favor of unionization, six workers voted against it, and seven ballots were challenged.  In the event of a tie, the unionization effort would fail.

The Acting Regional Director in Boston sustained the challenges to six of the ballots, finding that they had been cast by workers who were fired about six weeks before the election.  The remaining challenged ballot, which would determine the election, was cast by Alberto Quesada.  The employer challenged Quesada’s ballot on the grounds that the signature on the ballot envelope was illegible and did not match known examples of Quesada’s signature.

In support of its challenge, the employer submitted seven documents bearing Quesada’s signature, including his IRS W-4 form, his direct deposit authorization, and his I-9 employment eligibility verification.  After reviewing these documents, the Regional Director stated:

In addition to the lack of evidence of fraud involved in the submission of Quesada’s ballot, I also conclude that the signature on the ballot is that of Quesada.  Exemplars provided by parties of Quesada’s signature include horizontal lines above and beneath his signatures on those items.  Notwithstanding the Employer’s assertion to the contrary, a horizontal line appears on the upper portion of the signature on the envelope.  An examination of the envelope also demonstrates that the “Q” in Quesada’s typical signature and dots appear on the signature on the envelope, albeit at the beginning of the signature.  I also note that the uneven terrain of the envelope likely contributed to the comparative messier signature than appears on the flatter contours of the documents provided by the Employer.

Given the foregoing, the Regional Director overruled the employer’s objection to Quesada’s ballot.

The Decision

The Board began its analysis by noting that the requirement that employees sign the outer envelope in which a mail-in ballot is returned to the regional office is intended to “safeguard the integrity of mail ballot elections” by ensuring the ballot can be identified as cast by an eligible employee.  Evidence that the signature on a mail ballot envelope varies significantly from known examples of an employee’s signature may “raise substantial and material issues regarding the identity of the person who marked the ballot enclosed within.”  In this case, the Board found that the “evidence presented by the Employer . . . clearly raises such issues with respect to the ballot in question here.”

Specifically, the Board found that the Regional Director improperly dismissed significant differences between the signature on Quesada’s mail ballot envelope and the examples provided by the employer.  For instance, the signature on the envelope “had one horizontal line across the body of the signature, whereas the seven known examples all have two horizontal lines.”  The Board also took issue with the Regional Director’s finding that “the envelope signature was ‘likely’ messier due to the ‘uneven terrain of the envelope,’” as there was no evidence to support this speculation.  Finally, the Board noted that the examples of Quesada’s signature provided by the employer were “very similar to each other, suggesting a high degree of consistency in the manner in which Quesada normally signs his name.”  Given this, the fact that the signature on the envelope varied from the other examples raised significant issues “regarding whether the ballot of Quesada was cast by an eligible voter.”

In short, the Board ruled that the Regional Director’s determination that there was no significant discrepancy between the signature on the ballot envelope and multiple, consistent examples of Quesada’s signature “was clearly erroneous.”  Accordingly, the Board remanded the case to the Regional Director to conduct a hearing regarding the employer’s challenge to Quesada’s ballot.

Bottom Line

The Board’s decision highlights the NLRB’s concern with maintaining the integrity of its mail-in voting system.  As NLRB Chair Lauren McFerran has said, safeguarding mail elections is an important part of modernizing the agency’s voting procedures, especially as votes by mail potentially become more prevalent outside of the pandemic and other unusual circumstances.

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The Decision

The case, Cedar Point Nursery v. Hassid, involved a California regulation, issued in 1975 and unique in the nation, that allowed union organizers to meet with agricultural workers at work sites in the hour before and after work and during lunch breaks for as many as 120 days per year.  Under the regulation, union organizers did not need to obtain the employer’s consent before entering their property.

After union organizing efforts in 2015, Fowler Packing Company, a shipper of grapes and citrus, and Cedar Point Nursey, a grower of strawberry plants, challenged the law, arguing that it amounted to a government taking of private property without compensation.  The Takings Clause of the Fifth Amendment, applicable to the States through the Fourteenth Amendment, provides: “[N]or shall private property be taken for public use, without just compensation.”

The Ninth Circuit Court of Appeals ruled that the regulation did not impose a burden so heavy that it amounted to an unconstitutional taking because the right of union organizers to access employers’ property was temporary and intermittent.  The Supreme Court disagreed.  Chief Justice John Roberts, writing for the majority, explained that the Ninth Circuit’s “position is insupportable as a matter of precedent and common sense.  There is no reason the law should analyze an abrogation of the right to exclude in one manner if it extends for 365 days, but in an entirely different manner if it lasts for 364.”

In the majority’s view, “the access regulation grants labor organizations a right to invade the growers’ property” and is, therefore, a “per se” unconstitutional taking.  A per se taking occurs when the government physically acquires private property for a public use.  Per se physical takings can occur even when the taking is minimal.  For instance, in a prior decision, the Supreme Court ruled that requiring landlords to allow cable television companies to install their equipment on their buildings was a per se taking of property that required compensation, even though the equipment occupied just 1.5 cubic feet of space on the exterior of each building.  In such situations, the government must pay for what it takes.  In this case, the Court explained, “[r]ather than restraining the growers’ use of their own property, the regulation appropriates for the enjoyment of third parties the owners’ right to exclude.”

Justice Breyer wrote a dissent responding to the majority’s position, stating that “this regulation does not ‘appropriate’ anything; it regulates the employers’ right to exclude others.”  Justice Breyer expressed concern that the “majority’s conclusion threatens to make many ordinary forms of regulation unusually complex or impractical,” such as regulations that permit temporary entry onto a property owner’s land for purposes of examining food products or performing inspections for compliance with preschool licensing requirements.

The majority opinion dismissed Justice Breyer’s concerns, stating that “[g]overnment health and safety inspection regimes will generally not constitute takings” because the government may make such inspections a condition of granting licenses and permits.

In addition, the majority explained that its decision did not invalidate its prior decision in PruneYard Shopping Center v. Robins, where the Court held that allowing high school students to gather petitions at a private shopping mall did not amount to a taking of the mall’s property.  Chief Justice Roberts wrote, “[u]nlike the growers’ properties, the PruneYard was open to the public, welcoming some 25,000 patrons a day.  Limitations on how a business generally open to the public may treat individuals on the premises are readily distinguishable from regulations granting a right to invade property closed to the public.”

The Supreme Court’s decision reversed the judgment of the Ninth Circuit and remanded the case for further proceedings.

Bottom Line

The Supreme Court’s decision is a victory for property rights.  However, the future of California’s regulation is not yet determined, as Chief Justice Roberts did not say what should follow from the Court’s holding that the regulation was a taking.  While the farming companies sought an injunction barring union organizers from accessing their property, the typical remedy for a government taking of private property is just compensation.  California may elect to avoid injunctive relief by providing compensation to farming operations to allow union organizers to continue accessing employers’ property.

Regardless, the decision affirms the notion that a private property owner may generally exclude others, subject to PruneYard’s holding involving “already publicly accessible” businesses. We will continue to monitor this case for further developments.

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In UPMC, 368 NLRB No. 2, a nonemployee union representative sat in a hospital’s public cafeteria to meet with employee union members regarding organizational campaign matters. While the hospital’s cafeteria was open to the public (e.g. family members visiting patients), the hospital had a consistent practice of removing nonemployees who were engaged in promotional activity, including solicitation, in or near the cafeteria. Hospital security therefore ejected the union organizer from the facility, prompting the union to file and Unfair Labor Practice charge against the hospital under the National Labor Relations Act (NLRA).

The Law Until Now

More than 60 years ago, in a case entitled NLRB v. Babcock & Wilcox, the Supreme Court recognized that while employers generally could not prohibit employees from discussing union organizing among themselves, they could limit such activities on the part of nonemployees e.g. union organizers.  The Supreme Court ruled that an employer may validly prohibit organizing activity by nonemployees if (1) reasonable efforts by the union through other channels would allow it to reach the employees (also known as the “inaccessibility” exception) and (2) if the employer does not discriminate against the union by allowing other distribution (also known as the “discrimination” exception).

Some years later, the NLRB created an additional exception to the Babcock standard in situations where nonemployee union organizers sought access to a portion of the employer’s private property that is open to the public, such as a cafeteria or restaurant inside the employer’s facility. Specifically, the NLRB concluded that employers violate Section 8(a)(1) of the NLRA by denying access to cafeterias and restaurants open to the public if the organizers use the facility in a manner consistent with its intended use in a non-disruptive manner. Therefore, nonemployee organizers generally could not be banned from eating, meeting and/or talking with employees in these spaces.

The NLRB’s New Stance

Despite the NLRB’s consistent application of their “public space” exception, many courts criticized the doctrine because it conflicted with Supreme Court precedent and infringed upon employers’ private property rights. Thus, in the UPMC case, the NLRB finally came to agreement with the courts and expressly found that “to the extent that Board law created a ‘public space’ exception that requires employers to permit nonemployees to engage in promotional or organizational activity in public cafeterias or restaurants absent evidence of inaccessibility or activity-based discrimination, we overrule those decisions.”

As a result, employers may now ban union organizing in their public spaces by nonemployees as long as they adhere to the inaccessibility and nondiscrimination conditions established long ago by the U.S. Supreme Court.

BOTTOM LINE

This decision allows employers that provide publicly accessible space on their premises, (e.g. restaurants, casinos, hospitals) to have significantly more control over activity taking place there.

Before, attempting to remove nonemployee union representatives was a legal minefield almost guaranteeing an unfair labor practice charge from the union. Now, so long as an employer has a neutral policy prohibiting all forms of solicitation or promotional activity in its public areas, and assuming the union can reach employees in other ways, action can be taken to prevent access by nonemployee organizers.

Employers interested in keeping union organizers out of their public spaces should (1) review their policies to ensure that they prohibit solicitation by nonemployees, and (2) enforce these policies uniformly.

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The most recent example of this can be found in the case of Ridgewood Health Care Center, Inc., which overruled two decades of precedent regarding successor employer bargaining obligations following discriminatory hiring practices.

The Successorship Doctrine in a Nutshell

Under certain circumstances, a firm purchasing a business with an existing unionized workforce may have an obligation to bargain with the incumbent union representing the seller’s employees before setting those employee’s initial terms and conditions of employment, if the buyer is a “perfectly clear successor.” A buyer is a perfectly clear successor if the incumbent employees reasonably believe that the buyer will retain “all” or “substantially all” of a predecessor’s unit employees without changing those employees’ terms and conditions of employment.

If a buyer is not a perfectly clear successor, then the buyer is able to set the employees’ initial terms and conditions of employment as it sees fit. However, the buyer may still have an obligation to recognize the incumbent union if two factors are met: (1) if the buyer runs the operation in the same manner as the seller had, and 2) if the buyer hires enough of the seller’s employees to comprise a majority of the employees in the new unit.

One caveat to this exists under the NLRB’s 1996 decision of Galloway School Lines. In Galloway, the NLRB held that if a buyer discriminates in hiring any of the represented workers in an effort to avoid a resulting majority in the new workforce, then the buyer waives its right to set the initial terms and conditions of employment for its employees and remains bound by the existing collective bargaining agreement (CBA), effectivity becoming a perfectly clear successor.

The NLRB Eases The Remedy

In Ridgewood, the NLRB dealt with a situation where a hospital was purchased by a different company. Following the hiring process, the buyer claimed that a majority of the new hires were not previous employees, and therefore argued it was not obligated to recognize the incumbent union. The incumbent union brought an Unfair Labor Practice Charge alleging that the buyer had engaged in a discriminatory hiring scheme against the previously represented employees, and that the unit would have had a majority of employees of the predecessor employer, but-for the buyer’s discriminatory hiring scheme.

The NLRB agreed with the Union that the buyer had discriminated against four prior employees in an effort to avoid having a majority of previously-represented workers in the new unit, and that the buyer had an obligation to recognize and bargain with the Union. However, in reaching its decision, the NLRB overruled the Galloway decision, thereby preventing the buyer from being considered a perfectly clear successor bound by the existing CBA. The NLRB reasoned that the Galloway decision goes too far and “effectively eliminates the otherwise customary . . . right to set initial employment terms” for a successor employer.

The NLRB went on to further state that the decision, which provides more flexibility to firms acquiring existing businesses, “will promote the survival of foundering businesses and preserve jobs.” Thus, the buyer in this case was not obligated to adopt the CBA. Instead, they were ordered to hire the four employees they discriminated against, which then gave the union majority status requiring the buyer to recognize and negotiate with them.

Bottom Line

The overruling of Galloway provides more wiggle room for companies buying existing businesses since it is less likely that they will be deemed perfectly clear successors even if they are found to have discriminated against some of the seller’s employees in the hiring process. Even so, businesses should remain cognizant of successorship issues to be sure that they do not put themselves into the position of having to live with a CBA that someone else negotiated.

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Susan Walker, a long time HR practitioner at Macy’s, had been looking to make a change and was thrilled to sign on with a true Mom and Pop operation.  She was really looking forward to her first Christmas at the North Pole.

Susan had heard that things were not all merry and bright in the workshop so she scheduled some informational interviews with key members of the various departments, starting with Transportation & Delivery.  Her first appointment was with Rudolph, whose red nose immediately lit up the room as he walked in.  Susan greeted him and told him how much she loved hearing about his magical journey on that famous foggy Christmas Eve.  She was surprised when Rudolph snarled back:

“Magical? What a lump of coal that is. I never had any training to lead the sleigh so why did I get stuck out there under those conditions?   That’s gotta be some sort of OSHA violation.”

Susan replied that at least now the rest of the reindeer love him but Rudolph continued:

“Not really, because when I complained to Santa about that horrible trip, he just laughed and left the room.  I think he must have told the others because I’m back to not being allowed to join in any reindeer games.  Now when my shift is over, it’s just one silent night after another. We’ll see who is Ho Ho Ho’ing once I file my retaliation claim.”

Rudolph stormed out, the warm red glow of his nose now replaced by a bleak midwinter air.

A Blue Christmas?

Susan’s next appointment was with Vixen, another of the reindeer team that pulls Santa’s sleigh.  She looked both nervous and sad, telling Susan she was relieved to have another female to talk to about the horrible things being said in the workshop.  Susan offered that she has never come across anything like that during her visits to the shop but Vixen cut her off:

“Do you hear what I hear?  I mean – Vixen isn’t even my real name.  The guys just call me that and say things like how I really jingle their bells, whatever that means.  I’m no vixen and I don’t want to be called that.  I feel like I’m being sexually harassed but I’m scared that if I complain, I’ll just get the Rudolph treatment.”

Susan asked what she wanted to see happen and Vixen replied “I just want it to stop.  My real name is Madge – can’t they just call me that?” Vixen then glanced out the office window and a sudden sense of panic seemed to overtake her as she exclaimed “Here comes Santa Claus.  I can’t let him see me talking to you.”  She then bolted out of the room and down the hall.

No Christmas Cheer

Just then, Donder and Blitzen burst through the door, the smell of peppermint schnapps filling the room. “People think it’s all candy canes and tinsel around here but they have no idea” said Donder. He went on:

“Every year it’s the same thing – we get stuck in the back row.  All night long, over seven continents, all we see is the south end of north bound reindeer.  We’ve had it – we are on strike until we get moved up in line.”

Susan knew that concerted activity like this can be protected under the National Labor Relations Act so she needed to tread carefully.  She told them she would look into it, to which Donder replied:

“Well, I’m not working until this gets resolved.  You got 12 days to figure this out, otherwise I’ll be home for Christmas – you can plan on that.”  Blitzen then chimed in. “Same here. There’s no place like home for the holidays.”

They both laughed uproariously, high-fived each other (which isn’t easy with hooves) and shuffled out.

Nobody else was in the waiting area so Susan began reviewing witness statements from last night’s sugar plum incident.  Suddenly from out on the lawn there arose such a clatter, she sprang from her chair to see what was the matter.  Looking out her window she saw several smallish figures who seemed pretty angry.  They were carrying signs saying things like “Santa is on my naughty list” and “All I want for Christmas is $15.00 an hour.”

Susan decided to go talk to them and had just taken her first step out the door when she heard Blitzen call out “Where’s your coat?  Baby, it’s cold outside.” The sounds of laughter filled the air.

Susan sighed and thought “This may not be such a Merry Christmas after all.”

The Minnesota Employment Law Report wishes all of our loyal readers a very joyous holiday.

The post Santa’s New Human Resources Director Finds a Frosty Chill at the Workshop appeared first on Felhaber Larson.

The Wisconsin law prohibited the common practice of automatic dues checkoff authorizations –  which allows employers to automatically deduct union dues from the paychecks of employees who provide authorization – unless employees were able to revoke their authorization within 30 days. This provision of the Wisconsin law conflicted with the federal Labor Management Relations Act, which provides that employers and unions may agree to automatic dues checkoff authorizations that are irrevocable for up to an entire year.

The 7th Circuit concluded that Wisconsin’s 30-day revocation period was preempted by the federal law. Federal law allows employers and unions to bargain over checkoff arrangements as long as they comply with federal law. The Court determined that Wisconsin’s 30-day revocation period amounted to an impermissible “attempt to add additional regulatory requirements for dues-checkoffs, and thus to change the scope of permissible collective bargaining.”

Bottom Line

This decision will undoubtedly be hailed as a victory for unions, as the longer revocation period insulates unions from a barrage of sudden checkoff cancellations and may stabilize financial and budgetary projections. It also demonstrates another tactic that foes of “right to work” legislation can employ nation-wide: rather than challenging the entire law as a whole, they can chip away provision by provision in the courts, arguing conflict with federal labor law.

However, there is a bright side for employers as well, as this decision indicates that courts are inclined to protect the freedom of employers to engage in bargaining with unions over dues checkoffs and other important aspects of the collective bargaining relationship.

The post Court Says There is Something Wrong with Wisconsin Right to Work Law appeared first on Felhaber Larson.

Is picketing on premises presumptively permissible?

Capital Medical Center of Olympia, WA, was engaged in a labor dispute with the union representing their technical employees. The hospital gave permission to a small group of off-duty employees to enter their property to hand out leaflets at two non-emergency entrances. However, without approval, additional employees began joining in while holding picket signs containing the messages “Respect Our Care” and “Fair Contract Now.” When the hospital became aware of the picketing activity, they told those employees that they could not picket by the entrance, threatened disciplinary action, and called the police.

After the union filed unfair labor practice charges, the National Labor Relations Board (NLRB) determined that the hospital’s actions violated the employees’ Section 7 rights under the National Labor Relations Act. Section 7 protects an employee’s rights to support a labor union, as well as solicit support both from co-workers and from non-employees (e.g. customers and the general public). Employers violate the law when they “interfere with, restrain, or coerce employees in the exercise of” their Section 7 rights.

NLRB Applies Republic Aviation to on-site picketing

When employees seek to exercise their Section 7 rights on their employer’s property, their rights are balanced against the employer’s property interests and management prerogatives. Section 7 protects an employee’s rights to support a labor union, as well as solicit support both from co-workers and from non-employees (e.g. customers and the general public). Employers violate the law when they “interfere with, restrain, or coerce employees in the exercise of” their Section 7 rights.

When employees seek to exercise their Section 7 rights on their employer’s property, their rights are balanced against the employer’s property interests and management prerogatives. In 1945, the United States Supreme Court ruled in Republic Aviation Corp. v. NLRB that an employer’s decision to prohibit solicitation of union support on company property by off-duty employees was presumptively unlawful unless the employer presented evidence that special circumstances require the prohibition so as to maintain production or discipline. In the health care setting, the NLRB has applied the Republic Aviation decision so that the employer’s prohibition on employee solicitation of union support is presumptively invalid unless the hospital can demonstrate a need for the restriction in order “to avoid disruption of health-care operations or disturbance of patients.”

The NLRB had not previously applied the Republic Aviation standard to picketing directly on hospital property but they did so in this case, finding that the union’s stationary and peaceful picketing activity fell within the scope of Section 7 protection.  As such, the hospital’s interference with on-site picketing that did not disrupt operations or otherwise interfere with patient care violated the National Labor Relations Act.

The hospital appealed the ruling to the United States Court of Appeals for the D.C. Circuit, but to no avail as the appeals court found the NLRB’s application of the Republic Aviation principles to be reasonable.  They explained that in order to overcome the Republic Aviation presumption of protected activity, the hospital was only required to show a likelihood of disruption or disturbance. However, the hospital here could only point to “speculative and exaggerated contentions” that were “not supported by the record,” and thereby failed to overcome the presumption.

The Appeals Court noted that the Republic Aviation framework only applied to “non-patient care areas” and echoed the NLRB’s warning that its decision did not mean that “on-premises picketing must be permitted to the same degree as on-premises solicitation and handbilling.” Whether or not other picketing activity meets the Republic Aviation standard will depend on the particular facts of each case.

Bottom Line

It is crucial to note that this case does not mandate that that all employee picketing on hospital property is per se permissible. Instead, it simply means that employee picketing in non-patient care areas is permissible unless the hospital is able to point to some evidence to support the contention that allowing employees to picket would disturb operations or interfere with patient care.

This decision provides useful guidance for hospital employers as to when they might act to prevent on-site picketing by off-duty employees. They must be able to point to some evidence that the activity is likely to create a disruption of operations or a disturbance to patient care.  Otherwise, they risk a finding that they violated the employees’ Section 7 rights.

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In 2017, 15.2% of Minnesota workers (or about 411,000) belonged to a union.  Public sector unions account for at least one-third of Minnesota’s total union representation and the state’s largest public unions include: Education Minnesota (70,000 members), AFSCME (56,000 members), and the Minnesota Association of Professional Employees (14,500 members).

Background

Many states, including Minnesota, have passed laws permitting public employees to unionize.  Under these laws, the union may engage in collective bargaining; individual employees may not be represented by another agent or negotiate directly with their employer (i.e., the state).

Individuals who do not wish to join the union can still be required to pay what is generally called an “agency fee,” a percentage of full union dues under a Supreme Court decision called Abood v. Detroit Board of Education, 431 U. S. 209 (1977).  This fee may cover union expenditures attributable to those activities “germane” to the union’s collective-bargaining activities (such as negotiations and grievance processing), but may not cover the union’s political and ideological projects (such as supporting political candidates). The union sets the agency fee annually and then sends nonmembers a notice explaining the basis for the fee and the breakdown of expenditures.

In Minnesota, for example, state law provides that government employees who refuse to join the union can be forced to pay a “fair share fee” of up to 85% of full union dues. While there is a process for challenging the fees assessed by the union, the process is convoluted and cumbersome.

The Supreme Court Decision

In Illinois, state employee Mark Janus objected to the “agency fee” charged by the union representing his colleagues.  The fee was 78.06% of full union dues.  Janus objected to the payment of any union dues because he claimed that fees constituted “coerced political speech” in violation of the First Amendment.

The Supreme Court agreed, overruling its decision in Abood.  The 5-4 majority concluded that “public-sector agency-shop arrangements violate the First Amendment.”  The Court dismissed the union’s “free-rider and “labor peace” arguments, noting that neither were sufficient to overcome the free speech concerns.

Bottom Line

The result of today’s decision is that public sector workers who refuse to join the union can no longer be forced to pay any dues or fees to the union.

In Minnesota, this likely means that any “fair share fee” assessed by a union on a public sector employee violates the First Amendment.  While current public-sector union members would need to resign their membership before their dues obligation could cease, non-members could likely cease paying dues immediately.

Public sector employers that are deducting fair share fees from non-members should seek immediate legal counsel to avoid potential legal liability as continuing to withhold and pay such dues may result in litigation and damages.

We will continue to monitor these developments.

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As we previously highlighted in a post entitled Labor Board Will No Longer Flyspeck Employer Policies and Handbooks, the Board’s decision in The Boeing Company announced that where a work rule is not unlawful on its face, promulgated in response to Union activity, or enforced in a discriminatory manner, they would evaluate whether or not specific employer’s handbook policies violate Section 7 of the National Labor Relations Act (NLRA) by considering: (1) the nature and extent of the potential impact on NLRA rights, and (2) legitimate justifications associated with the rule.

The General Counsel’s memorandum provides guidance regarding whether common types of employer handbook policies meet this standard, and accordingly are lawful or not, delineating three different categories of rules:

Category 1 – designated by the Board as generally lawful to maintain.

Category 2 – warrant individualized scrutiny by the Board.

Category 3 – designated as generally unlawful.

Category 1 Rules

Rules that fall within Category 1 are generally presumed to be lawful, and charges asserting rules falling into this category should be dismissed.

• Civility Rules – including rules prohibiting disparaging other employees, rules prohibiting rude, discourteous, or un-businesslike behavior, and rules prohibiting offensive language.
• Rules Prohibiting Photography or Video/Audio Recording At Work – This is a notable change from the NLRB’s 2015 decision in Whole Foods Market, Inc.
• Rules Against Insubordination – Rules prohibiting 1) insubordination, 2) unlawful or improper conduct, 3) uncooperative behavior, 4) refusal to comply with orders or perform work, or 5) other on-the-job conduct that adversely affects the employer’s operation.
• Disruptive Behavior Rules – Rules prohibiting disturbances or disruptions during work hours or disorderly conduct on employer premises. The General Counsel noted, however, that such rules should not be used to discipline employees for engaging in walk-outs or strikes.
• Rules Protecting Confidential, Proprietary, and Customer Information – This is a notable change from the 2017 Verizon Wireless
• Rules against Defamation or Misrepresentation
• Rules Prohibiting Using Employer Logos – In a departure from the Board’s 2015 decision of Boch Honda, the Board will uphold bans on employees using company logos or intellectual property for non-business purposes.
• Rules Requiring Authorization to Speak for the Company – The memorandum indicates that rules regulating who may speak on behalf of the company has no usual impact on employee Section 7 rights and is therefore lawful.
• Rules Banning Disloyalty, Nepotism, or Self-Enrichment – These rules will be held to be lawful based on an employer’s legitimate and substantial interest.

Category 2 Rules

Rules that fall under Category 2 are considered to be close calls regarding the balancing of employer and employee interests. Employers should review their handbooks and seek legal advice regarding the following types of provisions:

• Broad Conflict-Of-Interest Rules – Where the rules do not specifically target fraud and self-enrichment, they will be scrutinized.
• Confidentiality Rules – Where such rules are not limited to customer or proprietary information, they may be interpreted to limit Section 7 rights.
• Anti-Disparagement Rules – Rules regarding disparagement or criticism of the employer should be scrutinized (Those that prohibit disparagement of co-workers/customers may be fine).
• Rules Regulating Use of the Employer’s Name (as opposed to the company’s logo which may be protected).
• Rules Prohibiting Speaking to the Media.
• Off-Duty Conduct Rules.
• Rules Generally Prohibiting False Statements (as opposed to rules against defamatory statements, which are lawful).

Category 3 Rules

Category 3 Rules will be found by the Board to be unlawful, and employers should review their handbook policies to ensure the following categories of rules are not present:

• Confidentiality Rules as to Terms and Conditions – Where rules prohibit discussion of wages, benefits, or working conditions they remain presumptively unlawful; and
• Rules Prohibiting Involvement with Outside Organizations – Such rules are readily understood to cover employee involvement in unions and will remain presumptively unlawful.

Bottom Line

The General Counsel’s Memorandum continues the recent-trend at the Board of allowing employers to maintain common-sense policies that have a minimal burden on employee rights under the NLRA.

Given the fact that the memorandum delves into detail regarding the legality of common handbook provisions, it is a good idea for employers to take the opportunity to review their handbooks to ensure that they do not contain any Category 2 or Category 3 Rules, which may be subject to heightened scrutiny.

The post NLRB Issues New Rules on Validity of Handbooks and Policies appeared first on Felhaber Larson.

This marks only the second time that the Court of Appeals has vacated an arbitration award reinstating a police officer, and signals a possible basis for challenging arbitration awards despite a long-standing judicial deference toward them.

Great Deference For Arbitration Awards

A long-standing tenant of labor arbitration is that the arbitrator is the final judge of both fact and law, and that in the absence of fraud, an arbitrator’s award will not be set aside due to a mistake of either fact or law. In furtherance of this principle, Minnesota Courts have ruled that every reasonable presumption must be exercised in favor of the finality and validity of arbitration awards.

Recently, however, the Court of Appeals deviated from this long-standing precedent when reviewing the case of a terminated Richfield Police Officer.  The officer was fired for striking an individual of Somali descent during an encounter and later failing to report this use of force in violation of Department policy.

After the officer’s labor union challenged the termination at arbitration, the arbitrator ruled that the officer did not engage in excessive force and that his failure to report the use of force was merely a “lapse in judgement.” The arbitrator ordered the officer be reinstated and reduced the termination to a three-day unpaid suspension.

The Public Policy Exception is Historically Narrow

The City of Richfield challenged the arbitration award alleging that it should be vacated as contrary to public policy.  Despite the strong policy favoring the validity of arbitration awards, Minnesota has recognized a limited exception for arbitration awards to be vacated if they are contrary to a “well-defined and dominant public policy.” Historically, the critical question was not whether the award (and not the underlying conduct) violated an established public policy.

The public policy exception is a narrow one and the Minnesota Supreme Court has only weighed in on it in just one other case.  There, the State Auditor at the time (current Minnesota Governor Mark Dayton) fired three auditors for falsifying expense reports.  An arbitrator ordered the auditors to be reinstated and subsequent appeals to vacate the award proved fruitless.

The Minnesota Supreme Court explained that although there was “a well-defined and dominant public policy against the embezzlement of state funds by public employees,” the public policy exception did not prohibit the arbitrator from finding mitigating circumstances to permit reinstatement. In other words, even though the employees’ actions were contrary to public policy, the award reinstating them was not.

The Court’s Public Policy Has Dubious Grounds

In the current case, the Supreme Court cited a well-defined and dominant public policy arising out of the Minnesota Rule requiring that all police officers hold licenses pursuant to the Minnesota Board of Peace Officers Training and Standards (POST), That rule states that “it is paramount that peace officers demonstrate that they are capable of self-regulation.” The Court therefore determined that failing to vacate the award reinstating the officer “would violate a well-defined and dominant public policy by jeopardizing public safety and undermining public trust in law enforcement.”

In short, the Minnesota Supreme Court announced that public policy demands that police officers incapable of self-regulation must not be returned to work.

Bottom Line

While the impact of this decision remains to be seen, it could usher in a renewed vigor in seeking to invalidate arbitration awards in Minnesota, especially those involving public employees covered by the Public Employment Labor Relations Act. The “well-defined and dominant public policy” requirement has traditionally been a high bar to meet but perhaps that bar has been lowered just a bit.

On the other hand, there may be some question as to whether the public policy cited here is in fact “well-defined and dominant” and an appeal to the Minnesota Supreme Court could be forthcoming.  It won’t be long until we know for sure.

The post Arbitrator’s Reinstatement of Police Officer Vacated Under Rare Public Policy Exception appeared first on Felhaber Larson.

While there still will be decisions finding employers responsible for unlawful behavior, the NLRB’s new 3-2 majority on the Republican side means we can anticipate that they will roll back a number of positions that had taken under President Obama.

What Can We Expect?

Many of the policies and decisions of the past 8 years on matters such as social media activity by employees, employer handbooks and policies, and mandatory arbitration agreements are ripe for reversal or, at the least, paring back.  These changes probably will not happen overnight; many will need to come as cases on appeal make their way to the NLRB for review.  Still, the NLRB will certainly act as quickly as the cases present themselves.

One area to watch would be the NLRB’s rules for “fast-track” union elections, an issue on which they have already been taking public comment for months.  No doubt, the NLRB Chair has been waiting to have a solid majority before closing the comment period and moving either to rescind the rules altogether or at least modify them in an employer-friendly way.

Another change might come in the continuing saga surrounding joint employment.  In 2015, the NLRB’s Browning Ferris decision relaxed the standard for finding multiple entities (e.g. a fast food franchise and its franchisor) jointly responsible for obligations under a collective bargaining agreement.  In December, 2017, the NLRB reversed that ruling in their Hy-Brand decision and reestablished the long-held principle that the second entity must be shown to have a high degree of actual control over the workers before being considered a joint employer of them.  However, just two months later the Hy-Brand decision was vacated, after the NLRB’s Inspector General indicated that one Board member had a conflict of interest when he ruled on the case.  Therefore, the Browning Ferris standard remains in place.

With a new majority in place, there is a strong possibility that the NLRB will address this issue again either through a recently revived appeal of the Browning Ferris decision or in a new case posing the same questions.

Bottom Line

Stay tuned, as the next six months will likely see a number of important developments for employers in a great number of different industries.

The post New NLRB Member is Confirmed: More Employer-Friendly Decisions Are Eagerly Awaited appeared first on Felhaber Larson.

The employer locked out their employees after they were unable to come to successfully renegotiate a new union contract. This led them to bring in temporary replacement workers, many of whom were African American, while the regular employees remained outside in picket lines.

Ugly Isn’t Necessarily Illegal

One employee in particular, Anthony Runion, took to yelling racial epithets at the replacements as they crossed the picket lines going to and from the plant. Most of what Runion said related to stereotypical remarks about food preferences on the part of African American people.  When the lockout ended and the company called back their regular workers, Runion was excluded and ultimately terminated due to his picket line behavior.

After an arbitrator found just cause for Runion’s termination, the union filed an unfair labor practice charge with the National Labor Relations Board (NLRB).  They alleged that Runion’s picket line behavior was protected concerted activity under the National Labor Relations Act (NLRA) and that the employer unlawfully interfered with the exercise of his rights under the Act. The NLRB sided with the union, leading the company to seek an order from the Eighth Circuit vacating that decision.

The Eighth Circuit affirmed, noting that Runion’s remarks themselves were not violent or threatening, nor were they accompanied by threatening behavior. They comments were not directed at any particular individual – they were merely a “package of verbal barbs thrown out during a picket line exchange.”  As such, Runion’s behavior was protected picket line activity and a termination stemming from it violated the NLRA.

Don’t Worry About Title VII

The Court rejected the contention that Runion’s reinstatement conflicted with the employer’s obligation under Title VII to prevent racial harassment. For one thing, Runion’s behavior was not so severe or pervasive as to rise to the level of an illegally hostile work environment so there was no actual conflict between the two federal laws.  Moreover, even if the company was required to take some sort of remedial action for harassment, they could have done something other than fire him.

The Court also rejected the company’s insistence that the NLRB should have deferred to the arbitrator’s opinion, as is usually the case when the same facts give rise to both an unfair labor practice charge and a union grievance. The Court explained that deferral is not mandatory, especially in a case such as this where the arbitrator applied the wrong legal standard.

This was a split decision, with one of the judges dissenting quite vigorously in stating “no employer in America … can be required to employ a racial bigot” and that Runion’s remarks had nothing to do with the cause of the workers on the picket line.  The dissenting judge concluded by lamenting how the NLRB (with the Court’s approval) continually “broadens the protections for such repulsive, volatile, incendiary and heinous activity.”

Bottom Line

We understand that the picket line is not a genteel environment and that there will be heightened tension between the demonstrators and those who are crossing the line in order to work.  Still, it is difficult to accept that race, ethnicity and other legally protected traits can now be targeted during workplace disputes.

It is even more difficult to envision how different groups of people might be expected to work together in harmony after the strike or lockout is concluded but such distasteful words still ring in the air.

The post Appeals Court Says Racist Slurs On The Picket Line Are Protected appeared first on Felhaber Larson.

In MikLin Enterprises, Inc., employees at ten Twin Cities’ Jimmy John’s sandwich-shop restaurants were in the process of trying to bring in a union to represent them.  One big point of contention was the company’s policy prohibiting employees from calling in sick without first finding a replacement to cover their shift. Failure to attend a shift without finding a replacement resulted in termination.

Workers Roll Out Negative Ads

During the organizing campaign, the employees attempted to pressure the company by putting up 3,000 posters on public bulletin boards within the stores as well as in other locations around the Twin Cities which contained two identical images of Jimmy John’s sandwiches. The first image stated: “Your sandwich made by a healthy Jimmy John’s worker.” The second image stated: “Your sandwich made by a sick Jimmy John’s worker.” Below both images there was text that asked “Can’t tell the difference? That’s too bad because Jimmy John’s workers don’t even get paid sick days. Shoot, we can’t even call in sick. We hope your immune system is ready because you’re about to take the sandwich test.”  Interestingly, the restaurants had regularly and consistently passed all health department inspections.

The six employees who coordinated the attack were terminated. They then challenged their terminations before the National Labor Relations Board (NLRB).

Under Section 7 of the National Labor Relations Act, employee communications to the public that are part of an ongoing labor dispute are protected unless they are “so disloyal, reckless, or maliciously untrue as to lose the Act’s protections.” The NLRB found for the employees, noting that “an employee’s public criticism . . . must evidence ‘a malicious motive,’” be made with knowledge of the statements’ falsity, or be made with reckless disregard for their truth in order to lose protection.

Because the NLRB found that the employee’s statements were at least arguably true, albeit hyperbole, the statements were not knowingly false and therefore were not subjectively malicious. As a result, the NLRB determined that the statements made in the posters were protected.

Claim of Protection Doesn’t Cut the Mustard

The Eighth Circuit disagreed, finding that the NLRB misstated and misapplied the law. Noting that “there is no more elemental cause for discharge of an employee than disloyalty to his employer,” the Court clarified that the operative question is not the employee’s subjective intent to harm their employer. Rather, the key inquiry is whether the employee’s public communications reasonably targeted the employer’s labor practices or if they indefensibly disparaged the quality of the employer’s product or services. In other words, although the posters dealt with terms and conditions of employment – sick leave – this alone did not protect the statements when they were made in an objective effort to harm the employer.

Under this different standard, the Court observed that an allegation that a food industry employer is selling unhealthy food is the labor-relations dispute’s “equivalent of a nuclear bomb.”  Since the employees’ tactics were unnecessarily excessive, the Court concluded that the employees’ statements were unprotected and that their terminations were therefore lawful.

Bottom Line

We first reported on this matter in 2011 in our article Firings Over “Sick Day” Flyer May Have Been Unlawful.  Almost 6 years later (a far cry from the Jimmy Johns motto of “freaky fast”), we finally have some assurance that even though an employee’s statements may contain technically true allegations, such statements may still lose the protections of the NLRA if they are made in an attempt to attack and harm the employer, even in the absence of evidence of subjective malice.

The post Court Says Protecting Negative Ads From Jimmy Johns Workers is Baloney appeared first on Felhaber Larson.

What the Rule is All About

As we reported in New Persuader Rule Hampers Employers, the DOL angered many employers, their legal counsel, and the American Bar Association in early 2016 when they sought to expand reporting requirements imposed on “persuader activities” under Section 203(a) of the Labor-Management Reporting and Disclosure Act.  Persuader activities include those services performed by consultants and attorneys the object of which “is to persuade employees to exercise or not to exercise, or persuade employees as to the manner of exercising, the right to organize and bargain collectively through representatives of their own choosing.”

Under the “old” rule, reports to the DOL were required on an employer’s arrangement with the “persuader” and the cost/fees incurred for those services but only if the provider was engaged in direct persuasion with the employees.  The rule exempted attorneys providing legal advice and excluded any reporting by legal counsel working indirectly with an employer to manage strategy and communications related to union avoidance.

The DOL’s proposed change expanded the scope of the rule to cover indirect activities such as planning, directing or coordinating with employers engaged in a union election campaign, and/or providing scripts and campaign materials to employers for use in such a campaign.  Lawyers are often called-upon to provide this guidance to make sure that the employer stays on the correct side of the complex and ever-changing legal framework for union election campaigns.  Thus, the rule intruded extensively into the privilege of confidentiality that exists between lawyers and their clients.

What Happens Next?

In November, 2016, as we wrote  at the time, a federal judge in Texas granted a permanent injunction staying enforcement of the new persuader rule. An appeal of that decision by the DOL is pending before the 5^th Circuit Court of Appeals, and the DOL under the new administration has been evaluating their options regarding the rule and the pending appeal.

With their evaluation apparently completed, the DOL will start by publishing a Notice of Proposed Rulemaking to rescind the rule.  The public will now have the opportunity to comment on the proposed revocation of the rule, and you can be sure the employer community and their legal advisors will not be shy in expressing their desire to see the rule revoked.

Bottom Line

Our prediction is that the new persuader rule manufactured during the Obama presidency is dead in the water and that the more traditional interpretation of persuader activities – which does not include legal advice offered by attorneys – will remain in place.

The post Labor Department Seeks to Revoke Controversial “Persuader” Rule for Union Elections appeared first on Felhaber Larson.

A number of state legislatures recently have passed “Right-to-Work” laws making it unlawful for unions and employers to negotiate agreements requiring employees to become and remain union members in order to keep their jobs.

Minnesota is not one of those states, but we could become one if Iowa Congressman Steve King gets his way.  He has just introduced a bill in the U.S. House of Representatives for a National Right to Work Act that would make “Right-to-Work” the law throughout the U.S.

“What a Great Idea” Said No Union Official Ever

Some state Right-to-Work laws provide a compromise by allowing labor unions to collect “fair share” fees from employees who are in their bargaining units but have not actually become dues-paying members of the union. This allows the union to defray the cost of still representing these employees who are not actually financially supporting the union.  However, many other Right to Work states, as well as Rep. King’s pending bill, allow employees to refuse paying any dues or fair share fees to the union even though the union continues to be legally obligated to bargain on their behalf.

Unions are increasingly concerned about the “Right-to-Work trend and their need to expend union resources benefitting what they call “free riders.”  Some are taking action to make it more difficult for existing members to resign.  Local 58 of the International Brotherhood of Electrical Workers, for example, passed such a rule in 2014 whereby someone seeking to resign membership in the union or revoke authorization to deduct union dues from his or her pay, “must do so in person at the Union Hall of IBEW Local 58 and show a picture identification with a corresponding written request. . . .”.  The employee could, however, contact the union to set up an alternative method for submitting their identification.

Even a Little Restraint is Still Restraint

One member of Local 58 who wanted to resign filed an unfair labor practice charge contending the this rule violated the National Labor Relations Act (the “Act”). The National Labor Relations Board (the “NLRB”) considered the claim and agreed that the rule violated the law, which among other things prohibits actions “to restrain or coerce . . . employees in the exercise of the rights guaranteed in Section 7,” including the right to refrain from any or all forms of union activity.

Essentially, the NLRB found that Local 58’s rule constituted an unlawful restraint on the right of employees to resign their union membership because it imposed a condition upon this right and implied that the union had control over it.  The fact that an employee seeking to resign could avoid the intimidation of the union hall in submitting their resignation was not persuasive – it still presented the appearance that the union controlled the right to resignation.

As a final matter, the NLRB also ruled that Local 58’s rule also violated the Act by imposing a new restriction on dues checkoff authorization without the assent of the affected employees.

Bottom Line

Employers negotiating with unions in Right-to-Work states should be wary of any request to by the union to negotiate restrictions on an employee’s right to refrain from paying dues or fees.

Where the union acts unilaterally to make it harder for union employees to resign and/or revoke, employers can expect to get questions from employees about their rights and obligations. Although the Act permits employers to discuss such matters, the employer must be careful not to promise any sort of benefit if employee resign, or threaten any reprisals if they do not.

The post This Pro-Employee Decision Will Make Employers Happy appeared first on Felhaber Larson.

As we previously reported, the DOL’s revisions were set to significantly expand the obligations of lawyers and their employer clients to submit reports (which would be publicly available) on advice and activities designed to persuade employees not to join labor unions.

The revised rule was supposed to become effective July 1, 2016, but had been temporarily enjoined in June of this year on a nationwide basis.

District Judge Sam Cummings’ decision reinforces the important distinction between what has typically been considered reportable persuader activity and the non-reportable, privileged advice and work product of legal counsel.  It is a significant victory for employers and attorneys that preserves the right of those employers to engage legal counsel concerning union organizing activity without fear that privileged communications will be at risk of disclosure.

Bottom Line

The Department of Labor could choose to appeal Judge Cummings’ decision.  However, it is unlikely that such an appeal will meet with success since it almost certainly would not be heard prior to inauguration day on January 20, 2017.  Thereafter, our guess is that the Trump Administration would not move forward in challenging Judge Cummings’ decision.

This could mark the end of a very long and arduous process to limit the ability of employers to obtain confidential legal advice during union organizing campaigns.  Let’s hope so.

The post Judge Strikes Down DOL Persuader Rule Revisions appeared first on Felhaber Larson.

Although this Advice Memorandum is not legally binding and is not yet embraced by the courts, it does reflect the interpretation of the NLRB’s General Counsel (who authored the Memorandum) and signals the likelihood of enhanced enforcement of this interpretation of the law.

The Union Organizing Drive

The Advice Memorandum addressed a company that entered into independent contractor agreements with their truck drivers.  These agreements contained a number of typical indicators of an independent relationship, including recognition that the drivers could decline work, permission to use their own trucks, compensation by the load instead of at an hourly rate and the requirement that the drivers secure their own insurance for their vehicles.

After the union began a campaign to organize the drivers, unfair labor practice charges were filed with the NLRB alleging that the company illegally threatened to close its facility if the drivers supported the union.  The charges also asserted that the company illegally interrogated one of the drivers about the extent of union support among his colleagues.

Not surprisingly, the company contested the allegations on the grounds that the drivers were not employees and therefore, the NLRB had no jurisdiction over them.

An NLRB Regional Office ruled against the company, finding that the drivers really were employees and that the threats and interrogation violated their rights under the National Labor Relations Act (NLRA).  The company settled the charges but soon thereafter issued a memorandum announcing that the company had no actual employee drivers and that the settlement did not apply to independent contractors.

The company’s actions prompted withdrawal of the settlement, another round of unfair labor practice charges and additional legal wrangling over the employment status of the drivers.  The dispute eventually landed at the doorstep of the NLRB General Counsel.

NLRB Unloads on the Company

The General Counsel agreed that the level of control and the ongoing nature of the relationship reflected that the drivers were employees, not contractors.  The company set non-negotiable compensation rates and controlled the drivers’ schedule and work hours to such a degree that the drivers could not work elsewhere.  Drivers received employee handbooks and other employment memos, they were provided with all necessary training, and were disciplined (or even terminated) for driving infractions.  What’s more, almost all of the drivers operated vehicles that were rented from, maintained by and insured through the company.

As employees then, the drivers were entitled to their rights under Section 7 of the NLRA, namely the right to join a labor union.  In that regard, the Advice Memorandum highlighted three critical legal principles at issue in this case:

1.   An employee’s right to engage in union activity is violated when an employer’s actions chill or curtail that person’s future Section 7 activity;

2.  An employer violates the NLRA when telling employees that their exercise of Section 7 rights would be futile (e.g. “Even if the union wins, we will never accept it”); and

3.  Misstatements of law amount to an unlawful interference with Section 7 rights if the statement reasonably implies adverse consequences for engaging in protected activity.

Based on these principles, the General Counsel concluded that the company unlawfully interfered with the drivers’ Section 7 rights.  Notwithstanding the terms of the independent contractor agreements, it should have been clear that the drivers were employees.  Continuing to treat them as contractors, especially after the NLRB found otherwise, was “without any legitimate business purpose other than to deny the drivers the protections that inure to them as statutory employees, and operates to chill its drivers’ exercise of their Section 7 rights.”

Moreover, the continued insistence that the drivers were not employees when the NLRB had ruled otherwise was “akin to a misstatement of the law that reasonably insinuates adverse consequences” for engaging in protected activity. Since independent contractors can be let go for union organizing activity, the company’s persistence in claiming that the drivers were not employees was deemed “tantamount to the Employer telling its employees that they engage in Section 7 activity at the risk of losing their jobs.”

Bottom Line

Misclassifying employees as independent contractors already posed a huge burden on an employer, and this new development just keeps piling it on.

Look for labor unions to get much more active in pursuing this new opportunity to enforce employee rights and to demonstrate their value to work forces they are trying to organize.

The post Treating Employees as Contractors May Violate NLRA appeared first on Felhaber Larson.

Employer reports must include information concerning the nature of the agreement or arrangement and the cost/fees incurred for the provision of such services.  Importantly, while the fact that persuader activities are provided will be reportable, the substance of the advice provided by legal counsel is not.  Consultants and law firms providing such “persuader” services are also required to submit annual reports to the DOL.

The Change

Presently, employers and consultants must file reports only when consultants are retained to engage in persuader activities directly with employees.  As interpreted, the current rule essentially excluded any reporting by legal counsel working indirectly with an employer to manage strategy and communications related to union avoidance activities.  Under the DOL’s revised rule, the scope of what must be disclosed is expanded to include indirect activities such as planning, directing or coordinating with employers engaged in a union election campaign, and/or providing scripts and campaign materials to employers for use in such a campaign.

Exemptions

The DOL’s attempt to revise the persuader rule began in 2011 and has been the subject of widespread opposition.  It is almost certain to face additional challenge from Congressional Republicans, employer organizations, and perhaps even the American Bar Association.  While response to the revised rule is certain to be strong, it is important for employers to understand that much of the advice and counsel provided by outside counsel is exempted from the reporting obligation imposed by the revised rule.  Specifically, the reporting obligation will not extend to many services offered by legal counsel, including:

• Legal services generally – including guidance on employer policies and best practices, and the conduct of seminars and training on various labor and employment related topics (including employee rights under Section 7 of the NLRA);
• Representation in civil or administrative litigation or arbitration; and
• Advice and counsel relating to collective bargaining negotiations;

Bottom Line

Employers wishing to take full advantage of the exemptions outlined above, are advise to treat union avoidance and campaign activities as discrete representations to avoid unnecessarily incurring an obligation to report information relating to otherwise excluded representations.  Look for additional detailed analysis of the new persuader rule over the next few weeks, as discussion of and challenges to the revised rule shed additional light on what it may mean for employers.

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After screen shots of Mr. Schultz’s comments were publicly circulated, the Company, Archer Daniels Midland, (“ADM”) investigated and then issued a statement explaining that Schultz no longer worked for ADM. It did not say whether he resigned or was terminated.

“These remarks are unacceptable and do not reflect ADM’s values,” the statement said.

This incident is a reminder of the potential pitfalls of social media – for both employees and employers alike. With 65 percent of American adults using social networking sites, social media is a significant presence both on and off the job.  As a result, people should anticipate being held more accountable when their behavior on social media is offensive.

While employees may consider their opinions on social media to be part of their “private lives,” the spread of social media and the public nature of online comments means that employers often become responsive to conduct of which they otherwise would be unaware.

It is critical to remember that employees do not have a First Amendment right to free speech or free expression at a private employer.   In most states, like Minnesota, employment is at-will.  Therefore, if an employer determines that an employee’s speech—whether at work or online—runs counter to the company’s values or image, the employee may be terminated.

This does not mean, however, that an employer has the right to control everything that an employee says at work or posts online or discipline employees for their remarks. Employees’ discussions—online or otherwise—about their terms and conditions of employment are protected speech.

The National Labor Relations Act (“NLRA”) protects the rights of employees to act together, or collectively, to address and improve their conditions at work.  This protection applies regardless of whether the employees are represented by a union.  In a string of decisions over the past few years, the National Labor Relations Board (“NLRB”) has made clear that this protection for “protected concerted activity” extends to work-related conversations conducted on social media.

An employee who complains about her boss online, for example, is most likely engaging in protected conduct. So are employees who take to social media to gripe about their wages or their work conditions.  An employer that disciplines its employees for social media activity that can be construed as protected concerted activity likely will be found in violation of the NLRA.

For example, a sports bar fired two employees who complained on Facebook that they owed higher state income taxes than they expected.  Co-workers “liked” one of the postings, and another wrote about the bar owner: “I owe too. Such an a[**]hole.”  The bar owner fired two employees for the complaints, but the NLRB ruled in favor of the employees as being wrongfully terminated, and the Second Circuit upheld that decision on appeal.

In addition, any company policy that prevents employees from discussing the terms and conditions of their employment (such as wages, hours, or personnel issues) or that would reasonably be understood by employees to prohibit protected activity, is unlawful. However, employers can maintain and enforce codes of conduct or anti-discrimination and anti-harassment policies that narrowly prohibit employees from engaging in discrimination, harassment, hostility on account of race, sex, religion , age, ethnicity, nationality or other protected status.

And employers can apply those anti-discriminatory policies to online conduct, as was likely the case in the ADM instance.

The NRLB has explained, in general terms, its position as follows:

• Employer policies should not be so sweeping that they prohibit the kinds of activity protected by federal labor law, such as the discussion of wages or working conditions among employees.
• An employee’s comments on social media are generally not protected if they are mere gripes not made in relation to group activity among employees.

Bottom Line

Employers may narrowly prohibit discrimination, harassment, threats of violence or other similarly inappropriate comments online, and may terminate those employees whose online conduct violates the employer’s values and mission.

Employers must be wary of disciplining employees for online posts or discussions about the employees’ terms and conditions of employment—even when the posts contain profanity, are negative toward the employer, or possibly inaccurate.

The post Employee’s Racist Post Means His Job is Toast appeared first on Felhaber Larson.

Setting the Stage

The NLRA protects the right of employees to act collectively to improve their working conditions or terms of employment. Any employer policy that prevents employees from doing so, or would reasonably be understood by employees to prohibit protected activity, is unlawful.

Since around 2001, Whole Foods Market’s employee handbook prevented employees from taking photos or making recordings in the workplace unless they first obtained a supervisor’s permission. Employees challenged the policy because it potentially could inhibit them from either communicating with fellow workers about protected collective action or documenting certain working conditions believed to be unlawful.

The company disagreed, contending that the policy actually promoted an open, communicative workplace where employees could “speak up and speak out” without the fear of surreptitious recording devices taking down their words.

In October, 2013, an Administrative Law Judge sided with Whole Foods, finding that “making recordings in the workplace is not a protected right” and that the policy was not intended as an anti-union device.  Moreover, permitting recording would have a “chilling effect” on the willingness of employees to speak up about concerns.

NLRB Sees It Through a Different Lens

On review, the NLRB also focused on the “chilling effect” of recording in the workplace but reached an entirely different conclusion.  They first noted that photos, videos, and recordings made on smartphones have become increasingly prevalent in labor actions. The NLRB explained that past case law is “replete with examples” in which covert photography or recordings have formed the essential basis for finding a violation of the NLRA.

As a result, the NLRB voted 2-1 against the employer on the grounds that recordings in the workplace can be considered protected under certain circumstances.   Whole Foods Market, Inc., 12/24/2015, 363 NLRB No. 87

Context Matters

Are all such policies now impermissible? Not necessarily. The NLRB did reinforce a ruling in a prior case where a ban on recordings was approved.  The significant issue for consideration is the context in which the rule applies.  The former case that the NLRB referenced arose in a healthcare setting where “employees would reasonably interpret the rule as a legitimate means of protecting [patient privacy], not as a prohibition of protected activity.”

Thus, where there are other legal interests at stake, and the policy is reasonably aimed at protecting those rather than inhibiting employee speech, a policy might be acceptable.

Bottom Line

Employers with broad, sweeping bans of photo, audio, or video in the workplace should review them to be sure that they are properly focused.  For example, if the policy bans recordings of product or production methods, the NLRB my very well view such a ban as a legitimate protection of trade secrets.  However, if the policy is vague, general or overly broad, it may be read as an attempt to limit employees’ ability to document, raise or respond to workplace concerns.

Even the best-intentioned policies can have unforeseen consequences or interpretations. Be sure to evaluate all policies in the widest possible context and get good legal advice before implementing them.

For questions, please contact John Hauge at jhauge@felhaber.com.

The post Labor Board Clicks “Pause” on No-Recording Policy appeared first on Felhaber Larson.

Fired Over Facebook Comments

In January 2011, at least two current and former employees of the Triple Play Sports Bar learned that they owed more in state income tax than they had expected. One former employee speculated on herFacebook page that this happened because the bar owner allegedly failed to properly complete tax paperwork. She wrote: “Maybe someone should do the owners of Triple Play a favor and buy it from them. They can’t even do the tax paperwork correctly!!! Now I OWE money . . . Wtf!!!!” Vincent Spinella, a current employee, clicked the “Like” button on the post. Several other current and former employees responded with their own comments, including Jillian Sanzone, a bartender, who wrote: “I owe too. Such an a[**]hole.” The bar’s owner fired Sanzone and Spinella for their Facebook activity soon after discovering it.

The employees took their case to the National Labor Relations Board (NLRB), alleging that the bar’s owner violated their rights under the National Labor Relations Act (NLRA) to act collectively “to improve terms and conditions of employment or otherwise improve their lot as employees.” The NLRB ruled in favor of the employees, and the Second Circuit upheld that decision on appeal, ruling that their right to act together to improve their employment includes the right to use social media to communicate with one another or the public for that purpose.

Are Facebook posts protected concerted activity?

When an employee is terminated over their public comments, a court is forced to engage in a balancing act—the employees’ rights to act collectively to pursue improvements to their working conditions must be weighed against the employer’s interest in preventing disparagement of its products or services. How do we know which one weighs more heavily?

The nature of the discussion matters. In this case, the employees were found to be engaged in concerted action because the comments involved current employees and were “part of an ongoing sequence of discussions that began in the workplace about [the bar’s] calculation of employees’ tax withholding.” The Facebook discussion was protected because the topics included withholding and possibly being owed back wages, which can fairly be considered terms and conditions of employment. Also key to the Court’s reasoning was that although the discussion among employees was public and viewable by customers, there was no evidence that the discussion was targeted at customers. Moreover, although the alleged reason for the tax liability may have been inaccurate, the statements were not made maliciously, but as part of a good faith discussion of working conditions.

Wait . . . is “Liking” a Facebook post concerted activity?

Does the simple act of clicking the “Like” button on a message typed by another person rise to the level of engaging in a discussion to improve the terms and conditions of employment? Both the NLRB and the Appeals Court said yes. While a “Like” is somewhat ambiguous, in the context of an ongoing dialogue among employees about tax withholding Spinella’s “Like” was construed as an expression of approval of the initial post by the former employee.

Bottom Line

Employees are not unconditionally entitled to communicate messages with the public that are disloyal or defamatory to their employer. Employers should recognize, however, that online discussions about the employees’ terms and conditions of employment might be protected even where they contain profanity, are negative toward the employer, or possibly inaccurate.

Employers can protect themselves by implementing clearly worded social media policies that cannot be construed to prohibit employees from discussing the terms and conditions of their employment.

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What Used to be a Business Contract . . .

Browning-Ferris Industries (“BFI”) retained a staffing agency (Leadpoint) to supply temporary workers to its recycling facility in California.  The contract between the two companies specifically stated that Leadpoint was the workers’ sole employer and set forth the following assignment of responsibilities:

• Leadpoint handled all the hiring (but the contract required that they make “reasonable efforts” to not assign former BFI workers who had been deemed ineligible for rehire at BFI);
• Leadpoint was responsible for disciplinary matters (but there were a couple of occasions where BFI insisted that a temp be disciplined);
• Leadpoint set wages (but could not pay more than what a BFI employee would get for similar tasks); and
• Leadpoint handled all terminations (although BFI could bar any worker from continuing to work at BFI facilities).

A union then petitioned the NLRB to represent both the BFI employees and the Leadpoint temporary workers under the theory that the two companies jointly employed the Leadpoint workers.   This theory required that the supposed joint employer (1) possessed authority to control the terms and conditions of employment, and (2) actually exercised that authority.

. . . Is Now an Employment Agreement

The NLRB ruled for the union, choosing to adopt a new and scaled-back version of the joint employer test.  Now, for the first time, an employer need only possess the authority to control the working conditions but does not have to have actually exercised that control.  The NLRB declared that the explosive growth of the contingent workforce meant that continuing to follow the old test would represent a failure “to adapt the [National Labor Relations] Act to the changing patterns of industrial life.”

In determining whether an employer possessed control over the working conditions of contract workers, the NLRB acknowledged that “direct, indirect, and potential control” were all relevant to the joint-employer inquiry, as was the “way the separate entities have structured their commercial relationship” because it determines whether the putative employer might have the authority to govern working conditions.

Under the new, relaxed standard, BFI was deemed to be a joint employer of the Leadpoint workers because:

• BFI “codetermined” the outcome of the hiring process by imposing specific conditions on Leadpoint’s ability to hire certain workers.
• BFI essentially had the ability to terminate Leadpoint employees because of their “unqualified right to ‘discontinue the use of any personnel.’”
• BFI managers actually assigned specific tasks that needed to be completed, specifed where Leadpoint workers needed to be positioned, and exercised “near-constant oversight of employees’ work performance.”
• BFI played a “significant role in determining the employees’ wages” because contract specifically prevented Leadpoint from paying employees more than BFI employees performing similar work.

Bottom Line

Pay attention to this decision if you use independent contractors.  If you are considered a joint employer of the people working at your company from staffing agencies, subcontractors, etc., the value of using those resources is greatly diminished.  Therefore, you should try very hard to minimize your involvement in decisions affecting contract workers in the areas of hiring, discipline, termination and all the others that are typically associated with employers.  Hire a good contractor and let them make those decisions.

Incidentally, the NLRB is not the only government agency looking at these issues.  The Department of Labor recently announced that is also is exploring an expansion of liability for OSHA violations by joint employers, as is the Equal Employment Opportunity Commission in regard to discrimination liability.

The post Are Employers Now Responsible for Their Contract Workers? appeared first on Felhaber Larson.

Given the unique nature and structure of NCAA Division I Football, the Board concluded that asserting jurisdiction in this case would not “promote stability in labor relations.”  First, unlike professional sports such the NFL or MLB, the vast majority of Division I schools are public institutions, which are not subject to the Board’s jurisdiction.  In fact, because all of the other schools in the Big10 are public institutions, the Board could not assert jurisdiction over any of Northwestern’s competitors.  Second, the Board noted that both the NCAA and individual conferences exercise considerable control over individual teams, so asserting jurisdiction over a single team would not promote stability in labor relations across the league.  Indeed, the Board noted that “all previous Board cases concerning professional sports involve league-wide bargaining units.”

In the end, the Board took care to limit the effect of this decision just to the case at hand.  They made clear that other athletic personnel (e.g., coaches, groundkeepers, etc.) may be subject to the Board’s jurisdiction and could seek to unionize.  Northwestern’s players, however, have been stopped short of the goal line.

Bottom Line

While nothing prevents the Board from changing its mind in the future, today’s decision likely means that the Board will likely decline to exercise jurisdiction over future election petitions filed by college athletes.  As such, those players will have to go back to the huddle and come up with a different game plan to seek greater control over their “work” environment.

The post Labor Board Stiff Arms College Players’ Unionization Attempt appeared first on Felhaber Larson.

If you are a unionized employer, you almost certainly know that your employees have something called “Weingarten” rights, meaning that unionized employees may request (and must then receive) union representation as a condition of participation in any interview the employee reasonably believes may result in disciplinary action. The rule does not apply, however, where the employee could not reasonably believe that an interview may lead to discipline – e.g., run-of-the-mill shop-floor conversations, task-related instructions, training or corrections, or meetings in which previously determined discipline is actually imposed.

While Weingarten guarantees the presence of a union representative upon request, it does not give that representative the right to turn the interview into a full adversarial proceeding. The Supreme Court has ruled that employers still may investigate the issue at hand without interference, including the right to insist on hearing the employee’s account of the events rather than a sanitized version offered by the union representative. Still, recent National Labor Relations Board (NLRB) decisions have begun to authorize expanded rights for the union representative, including the right to “remind” the suspect employee of his story by writing out answers to the employer’s questions, and the right to direct the employee not to respond until the employer “clarified” the questions to the union representative’s satisfaction.

No Truth + No Union Rep = No Worries

The NLRB recently went one step (or perhaps two or three) further in the case of E.I. Dupont de Nemours & Co., where an employee with a history of dishonesty was questioned on multiple occasions by managers about an alleged work-related injury he claimed to have suffered. The employer denied his requests for union representation and then fired him for providing what the NLRB described as “seemingly inconsistent and dishonest answers. . .” to the employer’s questions.

The employee and union filed an unfair labor practice charge against the company, which the NLRB upheld. Essentially, they assumed that a union representative would have protected the employee from acting contrary to his best interest and therefore, the employee should not be held accountable for dishonesty or intemperate behavior taking place during an unlawful investigative interview. The employee was ordered reinstated with full back pay.

This decision is particularly significant, and not just because of the NLRB’s attenuated reasoning. In previous cases, employees did not necessarily get their jobs back if the NLRB concluded that an employee was suspended or discharged for reasons unrelated to the denial of the employee’s Weingarten rights. Now, the NLRB seems to tell us that any misconduct during an unlawful interview will be considered out of bounds for disciplinary action, and that the employer will need to be able to prove that they would have discharged the employee even absent the purported interview-related misconduct.

Bottom Line

It is now more important than ever that employers understand the protections afforded union employees and their representatives when planning to conduct workplace interviews. Employers must determine in advance whether the interview is or is not investigative, how they will respond to a demand for representation and how they will deal with the increasingly broad rights union representatives now have during interviews.

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Franchisor Named In Complaint

The inclusion of McDonald’s USA, LLC (the franchisor) as a named party in the complaints came after the Office of the General Counsel for the NLRB determined that, in its view, the franchisor is a “joint employer” with the individual franchisees.  Minneapolis and Chicago are among the locations where the NLRB issued complaints in mid- to late-December.

As expected, McDonald’s USA, LLC will contest the NLRB’s position as to joint employer status, arguing that, as a parent company, it helps provide “resources” to its franchisees – through things like brand name recognition and operating material – but lacks meaningful control over workplace conditions.

The complaints filed by the NLRB allege that a joint employer relationship exists where McDonald’s USA, LLC has “a franchise agreement with [the franchisee], possessed and/or exercised control over the labor relationship policies of [the franchisee] and has been a joint employer of the employees of [the franchisee].” The complaints filed in Minneapolis (Region 18) and Chicago (Region 13) offer little factual support for the assertion that McDonald’s has “extensive influence over the business operations of its franchisees.” McDonald’s has already filed motions requesting more information and claiming that the NLRB’s complaints are unconstitutionally vague. Without additional facts, McDonald’s says it cannot appropriately defend itself and it will be denied due process of law in violation of the U.S. Constitution and federal law.

In a McDonald’s Fact Sheet published by the NLRB on its website, the Agency has summarized its joint employer theory as follows:

Our investigation found that McDonald’s, USA, LLC, through its franchise relationship and its use of tools, resources and technology, engages in sufficient control over its franchisees’ operations, beyond protection of the brand, to make it a putative joint employer with its franchisees, sharing liability for violations of [the NLRA]. This finding is further supported by McDonald’s, USA, LLC’s nationwide response to franchise employee activities while participating in fast food worker protests to improve their wages and working conditions.

Only time will tell if this argument is factually and legally supportable.

Bottom Line

The concern for McDonald’s, and other franchisors, is the potential for liability where they have not been directly involved with workplace decisions and conditions such as hiring, firing, discipline and supervision at each franchise location.  A hearing is scheduled to commence in Chicago on March 30, 2015, where we are likely to learn more of the NLRB’s factual basis behind its joint employer theory.

We will keep you updated as to any significant developments.

The post McDonald’s Is Not-So-Happy about Getting Served appeared first on Felhaber Larson.

Register Guard Decision

In 2007, the Board issued a decision in Register-Guard, 351 NLRB 1110 (2007), which held that employees have no statutory right use their employer’s email systems for engaging in conduct protected by the National Labor Relations Act (“NLRA”). Such activities include union organizing and other concerted activities for mutual aid or protection.

Accordingly, employers had been able to promulgate and enforce policies that prohibited employees from using company-provided email systems for all non-work related activities, such as selling a car or soliciting donations. The fact that these blanket prohibitions included activities protected by the NLRA was of no consequence, provided that the employer did not enforce the policy in a way to target union or other activities protected by the NLRA.

Right to Use Company-Provided Email for Activities Protected by NLRA

In its decision in Purple Communications, 361 NLRB No. 126 (Dec. 11, 2014), the Board ruled that employees who have been given access to a company email system must presumptively be allowed to use the system during their non-working time for communications that are protected by the NLRA. In short, according to the NLRB, federal labor law prohibits employers from implementing or maintaining policies that prohibit all non-work related use of its email system.

Because the right is subject to a “presumption,” it may be possible for the employer to rebut the presumption in certain cases. According to the Board, “[a]n employer may rebut the presumption by demonstrating that special circumstances necessary to maintain production or discipline justify restricting its employees’ rights.” However, the Board made clear that it would be a “rare case” where an employer’s business interests would justify a total ban on non-work email use.

Another limiting aspect of the decision is that it only applies to “non-working time.” Therefore, employers can continue to prohibit use of its email systems for non-work related purposes during the employees’ working time. (However, employers are not permitted to discriminatorily enforce a prohibition against non-business use by selectively prohibiting email communications that constitute NLRA-protected discussions.) In addition, the Board made clear that its decision applies only to company email and not to other forms of electronic communication, such as employer-provided instant messaging services or social media.

Bottom Line

Although not unexpected, the Board’s decision represents a “sea change” for employee email use. According to the Board, employers can no longer maintain an electronic communications policy that generally prohibits all non-work related use of the employer’s e-mail system.

Employers with such policies should, with the assistance of counsel, consider whether and to what extent changes need to be made. Considerations include the following: (1) the possibility that the Board’s decision will be reversed on appeal, (2) the fact that maintaining an unlawful policy may be grounds for setting aside a union election, (3) the possibility that managers who are not expected to keep up with these legal nuances may independently authorize the termination of an employee in reliance upon a policy that the NLRB considers to be unlawful for engaging in NLRA-protected communications (which raises the stakes of an adverse outcome), and (4) the fact that the NLRB cannot force an employer to change its policy unless a charge is filed.

Employers with questions should feel free to contact any of Felhaber Larson’s experienced Labor Law attorneys. We will continue to monitor this issue as it develops.

The post Labor Board Rules that Employees Have Right to Use Employer-Provided Email appeared first on Felhaber Larson.

Overbroad Social Media Policies Are Unlawful under the NLRA

In the report, Solomon confirmed that overbroad company rules and policies violate the NLRA where employees would reasonably interpret them as limiting their exercise of rights guaranteed by federal labor law.

Solomon cited the following policies as overbroad and unlawful:

• “You also need to protect confidential information when you communicate it. . . . Never discuss confidential information at home or in public areas.”

• “If you engage in a discussion related to [Employer], . . . you must also be sure that your posts are completely accurate and not misleading and that they do not reveal non-public company information on any public site.” Nonpublic information was defined to include information “related to” the company’s financial performance, as well as personal information about employees.

• “Don’t pick fights” and reminding employees to communicate in a “professional tone” without making “objectionable or inflammatory” comments.

Even though some of these policies had a “savings clause,” stating that they were not intended to cover rights protected by the NLRA, Solomon still considered the policies unlawful.

Carefully Drawn Restrictions Are Lawful

Solomon did deem some restrictions permissible, particularly when the policy contains specific examples of prohibited conduct, so that employees understand that the policy does not prohibit protected activity under the NLRA.

For example, one prohibition against “harassment, bullying, discrimination, or retaliation that would not be permissible in the workplace . . . even if it is done after hours, from home and on home computers,” was considered lawful because the rule gave employees an illustrative list of prohibited acts, such as bullying and discrimination.

Likewise, while a specific policy instructing employees to be “fair and courteous” when posting online material could be overly broad, Solomon concluded that the policy provided sufficient examples of plainly egregious conduct, so that employees would not reasonably construe the rule to prohibit protected conduct.

Solomon specifically commented on Wal-Mart’s revised social media policy, finding it lawful in its entirety. A copy of this policy is available here.

Bottom Line

This new guidance provides additional insight into the NLRB’s treatment of social networking policies. Employers should analyze their own policies in light of this instruction and develop a social media policy that provides clear examples of what is prohibited.

The post New Guidance Issued on Social Media Policies appeared first on Felhaber Larson.

SEIU Healthcare Minnesota has been sending letters to employers, stating that they are required to post the notice by January 31, 2012. (A redacted version of the SEIU’s letter is available here).

As we advised on December 23, 2011, the effective date of the posting requirement is now April 30, 2012.  Although the scheduled effective date was at one time January 31, the NLRB announced on December 23 that it has postponed the effective date to April 30. (The NLRB’s December 23 announcement of the postponed effective date is here).

Thus, contrary to SEIU’s letter, you do not have to post the new NLRB notice (in hardcopy or electronic form) by January 31.  Moreover, it should be noted that litigation over the posting requirement is pending, and we expect that at least one U.S. District Court will address the validity of the posting requirement prior to the April 30 effective date.

We will of course provide you with any important updates concerning the new posting requirement.

The post Union Wrongly "Reminds" Employers to Post New NLRB Notice by January 31 appeared first on Felhaber Larson.

The new procedures are scheduled to take effect on April 30, 2012, although legal challenges have already been filed.

The procedures that have been adopted consist of some – but not all – of the changes that were proposed by the Board back in June of 2011.  The remainder of the proposed changes (which would significantly shorten the time period leading up to a union election in all cases) have not been dropped, but are merely on hold pending further consideration by the Board.

A full article discussing the adopted changes is posted on the Felhaber, Larson, Fenlon & Vogt website, available here.

The post Labor Board Adopts Procedural Changes for Handling Representation Cases appeared first on Felhaber Larson.

On the East coast, 45,000 Verizon workers went on strike in early August, after the company sought concessions from its landline workers to help offset declining revenue in the division. Despite an inability to agree on a new contract, employees agreed last week to return to work provided Verizon agreed to revise the manner in which collective bargaining would proceed.

Out West, members of the United Food and Commercial Workers, which represents approximately 62,000 workers at various grocery stores in California, including Ralphs Grocery Co., Albertsons Inc., and Safeway Inc.’s Vons supermarkets, voted overwhelmingly in favor of authorizing a strike if union negotiators cannot reach agreement with the companies on a bargaining contract to replace the one that expired March 6.

More locally, on August 1, 1,300 union workers were locked out of American Crystal Sugar’s five sugar processing plants in Minnesota, North Dakota and Iowa. The lockout is the company’s first labor impasse in 30 years. American Crystal accounts for 38 percent of the country’s production of sugar from beets and 15 percent overall.

Prior to the lockout, American Crystal offered its employees a 17% pay increase over five years. The offer included a 4% increase in the first year, a $2,000 one-time bonus, followed by annual percentage increases of 3, 2, 2, and 2 percentage points. The previous contract had offered 2 percent annual pay increases. But, the union rejected the offer, citing concerns about provisions relating to subcontracting and health care costs.  On August 24, both sides agreed to resume negotiations.

Bottom Line

Only time will tell whether this trend will continue. But, with hopes fading for a strong economic recovery in the near future, negotiators for labor and management will likely find themselves continuing to battle over a shrinking piece of the pie.

The post Rifts Between Labor and Management Increase appeared first on Felhaber Larson.