turbulent times in labor law part i saul ewing llp... · what has nlrb been doing? • requiring...

© Copyright 2013 Saul Ewing LLP

Presented by:Harriet E. Cooperman, Esq.Edward R. Levin, Esq.Robert C. Nagle, Esq.

March 5, 2013

TURBULENT TIMESIN LABOR LAW

PART I


Goals/Agenda for Today

• Recognize that the National Labor Relations Act applies to both nonunion and union employers

• Understand “protected concerted activity”

• Discuss Board’s recent decisions and impact on employers’ enforcement of workplace policies and employee behavior

• Possible impact of Noel Canning on NLRB cases

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What Has NLRB Been Doing?

• Requiring employers to post a notice to employees spelling out their rights under NLRA.– Currently enjoined by court order

• The “quickie elections” rule, designed to shorten the period between filing of an election petition and date of election– Currently enjoined by court order

• Allowing organizing in “micro” bargaining units.– Barneys of New York and other cases

• Revamped website to highlight employees’ rights and enforcement actions. http://www.nlrb.gov ; http://www.nlrb.gov/concerted-activity.

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Why is NLRB Moving Into New Territory as Workplace Czar?

Possible motives for NLRB actions:

� Increase union organizing–Remind employees what unions do

– Political considerations?�Try to achieve goals of EFCA

– Breathe life into old statute�Mission Creep


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Protected Concerted Activity

Section 7 Rights

Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and …


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Section 7 Rights

to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection,

and shall also have the right to refrain from any or all of such activities….


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Protected Concerted Activity

Two Requirements

WHY? Must be engaged for the purpose of “mutual aid or protection”

HOW? The activity must be concerted—that is, “done in concert with others” --“group-minded”


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“ Protected”

Employees have a statutory right to:

– Take action for better job conditions.

– Discuss dissatisfaction of working conditions with each other

– Discuss wage rates with each other– Complain about favoritism, bonuses, wages– Criticize management internally and publicly – Enlist outside support


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“ Concerted”

If:

– Employee acts formally or informally, on behalf of the group

– Action grew out of prior group activity

– Employee solicits other employees to engage in group action, even if rejected

– Employees don’t have to agree on all terms of the protest


“ Concerted”

� Protected activity must involve two or more employees or be action for the benefit of or on behalf of more than one employee

� “with or on the authority of…” or to move others to join in …

� Invoking CBA Rights

� Right to support employees of other employers (mutual aid)

� Lobbying (mutual aid)


Not Concerted = Not Protected

Action by an employee on behalf of

his/her individual issues is not protected

Practice Tip:It is not always easy to distinguish concerted activity and non-concerted activity. Listen carefully to what the employee is saying and consult with counsel before acting.


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Examples

• Protest that general working conditions are not safe or desirable

• Statement that it is unfair to provide a benefit to one group and not another

• Discussing pay with other employees – (such rules on confidentiality are unlawful)

• Walkout/strike over a group concern


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Examples

• You are not paying us properly for vacation.

• You are not giving me the days I want for vacation.

• … and never forget COLLECTING AUTHORIZATION CARDS ALL ALONE = as concerted as it gets.


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NOT ALL CONCERTED ACTIVITIES ARE PROTECTED

Reckless or malicious behavior, such as sabotaging equipment, threatening violence, spreading lies about a product, or revealing trade secrets, may cause concerted activity to lose its protection.

http://www.nlrb.gov/concerted-activity


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Guidelines and Pointers

• Employers may not engage in conduct that “tends to interfere with the free exercise protected concerted activity”

– No Handbook Policies Which Prohibit or Chill Action

• Protects both union and non-union employees


Is Workplace Rule Unlawful?

– Does rule explicitly restrict activities protected by Section 7?• if so, it is unlawful

– If not, then look at whether:

• Employees would reasonably construe rules to prohibit protected concerted activities

• Rule was promulgated in response to union activity

• Rule has been applied to restrict exercise of Section 7 rights

– Does rule tend to chill employees in the exercise of their rightto engage in PCA?

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Confidentiality Rules

Internal Investigations•Employer instructed employees who submitted complaints not to discuss the matter with co-workers while the employer’s investigation was ongoing

•NLRB found employer’s blanket confidentiality rule unlawful

•Employer must justify confidentiality on a case-by-case basis, considering:

– whether witnesses need protection, – whether evidence is in danger of being destroyed,

– whether testimony is in danger of being fabricated, or whether some other reason warrants confidentiality

Banner Estrella Medical Center, 358 NLRB No. 93 (July 30, 2012)

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Internal Investigations

•Employer’s oral rule prohibiting employees from discussing “with other persons any matters under investigation by its HR dept., violated 8(a)(1)

•Employer failed to show a countervailing and legitimate interest in preserving confidentiality because it did not conduct individualreview to determine whether confidentiality was necessary in each case where the admonition was given.

Hyundai America Shipping Agency, Inc., 357 NLRB No. 80 (2011).

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Confidential Information

•Costco Handbook Policy: “In the course of our business, we collect from our members and employees a substantial amount of personal information (such as name, address, phone number, e-mail address, social security number, membership numbers and credit card numbers). All of this information must be held strictly confidential and cannot be disclosed to any third party for any reason, unless (1) we have the person’s prior consent or (2) a special exception is allowed that has been approved by the legal department.

•All Costco employees shall refrain from discussing private matters of member and other employees. This includes topics such as, but not limited to, sick calls, leaves of absence, FMLA call outs, ADA accommodations, workers’ comp injuries, personal health information, etc.

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Confidentiality RulesNLRB held:

• “Private matters” include sick calls, leaves, FMLA, ADA accommodations, workers’ comp. injuries, which are terms and conditions of employment

• Rule’s prohibition against discussing these matters found to restrictexercise of Section 7 rights - overbroad

• Employees also would reasonably interpret rule to prohibit them from discussing terms and conditions of employment with co-workers and union

• Nothing in policy to except PCA

• Rule could have been limited to disclosure of private medical information in files

Costco Wholesale Corp., 358 NLRB No. 106 (September 7, 2012)

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– DirecTV Handbook stated “Never discuss details about your job, company business or work projects with anyone outside the company”and “Never give out information about customers or DIRECTV employees.”

– “Employee records” expressly included as category of “company information” that must be held confidential.

– NLRB found that explicit prohibition on releasing information about job, co-workers, and employee records would reasonably be understood by employees to restrict discussion of their wages and other terms and conditions of employment.

– Fact that policy also covers information about customers and company business” does not save it from condemnation.”

DirecTV U.S., 359 NLRB No. 55 (January 25, 2013)

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Non-Disclosure Agreement

–Confidential Information defined to “include[s], but is not limited to, information that is related to: our customers, suppliers, distributors; [our] organization management and marketing processes, plans and ideas, processes and plans; our financial information, including costs, prices; current and future business plans, our computer and software systems and processes; personnel information and documents, and our logos, and art work” held unlawful as overly broad.

Flex Frac, Inc., 358 NLRB No. 127 (2012)

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Confidentiality RulesNon-Disclosure Agreement

–Reasonable interpretation employees are prohibited from discussing wages and other employment terms and conditions

–Nothing in agreement to except PCA

–Employer’s argument that agreement was lawful because restricted only disclosure outside company and employer had a legitimate interest in restriction was rejected by NLRB because:

• Would prohibit disclosure of information to union representatives

• No legitimate interest in prohibiting employees’ discussion of wages and terms and conditions of employment

–Rules that could be interpreted to have a coercive effect on employees must be construed against employer, even if no intent and no manifestation of chilling effect

Flex Frac, Inc., 358 NLRB No. 127 (2012)

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Confidentiality RulesNon-Disclosure/Non-Disparagement Agreement

• Employer sued former employees for violation of non-disclosure/non-compete agreement

• Employees filed ULP claiming that non-disclosure and non-disparagement provisions violated Section 7 rights

• ALJ agreed, held overbroad non-disclosure provisions unlawfully hindered employees’ rights to engage in PCA.

• Non-disparagement provision would reasonably be understood by employees as chilling protected rights.

• “Within certain limits, employees are allowed to criticize their employer and its products as part of their Section 7 rights, and employees sometime do so in appealing to the public, or to their fellow employees, in order to gain their support.”

Quicken Loans, 28-CA-75857 (Jan. 8, 2013)

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Wage Confidentiality Rules

• ALJ found that handbook provisions prohibiting employees from disclosing wages or compensation to each other or to a third party and protecting the confidentiality of confidential and proprietary info, including personnel information violated 7.

Design Technology Group, LLC, 20-CA-35511 (April 24, 2012)

• NLRB upheld ALJ decision finding that engineering firm’s termination of employee for discussing salary information with co-workers violated NLRA. Employer ordered to rescind handbook policy prohibiting employees from discussing their salaries.

Jones & Carter, Inc., 16-CA-27969 (February 8, 2013)

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Social Media Rules

Costco Wholesale Corp., 358 NLRB No. 106 (September 7, 2012)

•Policy providing for discipline of employees who electronically post statement that damages company, defames an individual or damages an individual’s reputation held to violate NLRA•Employees would reasonably construe rule as prohibiting PCA

•NLRB rejected ALJ conclusion that rule would reasonably construed as ensuring a decent and civil workplace

EchoStar Techs. LLC, No. 27-CA-066726 (September 20, 2012)

•ALJ held that provision in employer’s social media policy that prohibited employees from using social media on company time chilled an employee’s rights under 7

•Rule prohibiting disparaging comments on about company, employees, vendors, customers, affiliates or our, or their products/services” on social media sites also found unlawful

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Social Media

NLRB Chairman Mark G. Pearce on Board’s Social Media Rulings:

“Many view social media as the new water cooler. All we are doing is applying traditional rules to a new technology.”

Steven Greenhouse, “Even If It Enrages Your Boss, Social Net Speech is Protected,” The New York Times, January 21, 2013.

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Social Media

NLRB AGC Solomon Deems Unlawful Rule that:

•Is ambiguous and does not contain limiting language or context that makes clear that rule does not restrict employees’ exercise of their Section 7 rights

•Prohibits employees from expressing personal opinions to the public regarding “the workplace, work satisfaction or dissatisfaction, wages hours or work conditions”

•Prohibits employees from sharing confidential info with co-workers unless needed for job, and from discussing confidential info in break areas, home, public or open areas

•Instructs employees to make sure their posts are “completely accurate and not misleading”

– Overbroad. Discussions and criticisms about employer labor policies and employee treatment are protected unless maliciously false

Office of General Counsel, Memorandum OM 12-59 (May 30, 2012)

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Social Media

NLRB AGC Solomon Deems Unlawful Rule that:•Cautions employees that when in doubt about whether info falls into a prohibited category DO NOT POST. Check with Company PR or Legal to see if it’s a good idea to post.

•Prohibits employees from posting photos, music, videos, and the quotes andpersonal information of others without obtaining the owner’s permission and ensuring that the content can be legally shared

•Prohibits non-commercial use of Company trademark or logo on electronic communications including social media postings

•States that “offensive, demeaning, abusive or inappropriate remarks are out of place online as they are offline.”

•Requires employees to report any inappropriate internal social media activity


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Social Media

NLRB AGC Solomon Deems Unlawful Rule that:

•Threatens employees with discharge or criminal action for failing to report unauthorized access to or misuse of confidential info•Prohibits employees from commenting on any legal matters

•Warns employees not to pick fights and to avoid topics that might be considered objectionable or inflammatory—such as politics and religion, and reminding employees to communicate in a “professional tone”

•Encourages employees “to resolve concerns about work by speaking with co-workers, supervisors or managers”

•Warns employees to “avoid harming the image and integrity of the company”

•Instructs employees to “think carefully about ‘friending’ co-workers”


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Social MediaNLRB AGC Solomon Deems Lawful Rule that:•Clarifies and restricts its scope by including examples of clearly illegal or unprotected conduct, such that the rule would not reasonably be construed to cover protected activity

•Contains limiting language stating that rule does not restrict employees’Section 7 rights

•Advises employees to be cautious about unwittingly divulging confidential information and does not proscribe any particular communications

•Requires non-disclosure of confidential information and includes limited definition and examples of conduct which makes clear does not to include wages and terms and conditions of employment

•Prohibits discussion about “Secret, Confidential or Attorney-Client Privileged information” since doesn’t refer to employees


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Social Media

NLRB AGC Solomon Deems Lawful Rule that:

•Prohibits representing “any opinion or statement as the policy or view of the [Employer] or of any individual in their capacity as an employee or otherwise on behalf of [Employer].”

•Requires that employees must expressly state that their postings are “my own and do not represent [Employer’s] positions, strategies or opinions.”

•Prohibits “inappropriate postings that may include discriminatory remarks, harassment and threats of violence or similar inappropriate or unlawful conduct.”

•“Be Respectful Rule” that contains examples of plainly egregious conduct such as posts that could contribute to creating an unlawful hostile work environment or offensive posts meant to intentionally harm another’s reputation


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Social Media Activity

Hispanics United of Buffalo, 359 NLRB No. 37 (December 14, 2012)

•Employee Cruz relayed her intention to complain to employer that her co-workers did not work hard enough

•In response, co-worker Rivera posted a Facebook message saying that Crux “feels that we don’t help our clients enough at [Employer’s name]. I about had it! My fellow coworkers how do u feel?” Four employees posted angry, nasty replies about Cruz

•Cruz complained to employer who terminated Rivera and the 4 other employees who posted on Facebook for bullying and harassing co-worker

•NLRB found that the employees were engaging in PCA for mutual aid and protection though Facebook posts. Terminations held unlawful and employer ordered to reinstate employees

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Social Media Activity

Karl Knauz Motors, 358 NLRB No. 164

•Board found that the firing of a BMW salesman for photos and comments posted to his Facebook page did not violate NLRA.

•Issue was whether the salesman was fired exclusively for posting photos of an embarrassing accident at an adjacent Land Rover dealership, which did not involve fellow employees, or for posting mocking comments and photos with co-workers about serving hot dogs at a luxury BMW car event. Both sets of photos were posted to Facebook on the same day; a week later, the salesman was fired.

•The Board agreed with ALJ that the salesman was fired solely for the photos he posted of a Land Rover incident, which was not concerted activity and so was not protected.

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Handbook Policies

Courtesy Policy•Rule: “Courtesy is the responsibility of every employee. Everyone is expected to be polite and friendly to our customers, vendors andsuppliers, as well as to their fellow employees. No one should be disrespectful or use profanity or any other language which injures the image or reputation of the dealership.”

•NLRB: Rule violates NLRA because employees would reasonably construe its broad prohibition against disrespectful conduct andlanguage which injures the image and reputation of the dealership as encompassing 7 activity.

•Remedy: Rescind the rule!

Karl Knauz Motors, 358 NLRB No. 164

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Handbook Policies

Leaving worksite– Rules at issue in TT&W Farm Products, Inc., 358 NLRB No., 125 (Sept.

11, 2012):• 1) You are expected to be at your work station during working hours and you

should obtain permission from your supervisor or plant manager before leaving the work station or plant.

• 2) Leaving the plant without your supervisor/group leader’s permission is considered a major violation of the attendance policy and such an incident will be considered a voluntary quit.

• 3) Leaving your work station without permission or approval will be considered cause for disciplinary action.

• 4) Walking off the job or leaving the plant without permission or notifying the supervisor will be considered cause for immediate discharge.

• 5) Willfully restricting production, impairing or damaging product or equipment, interfering with others in the performance of their jobs or engaging or participating in any interruption of work will be considered cause for immediate discharge.

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Leaving Worksite (cont.)

• ALJ found all 5 rules unlawful.• Board found only the last 2 unlawful.

• Board purported to draw distinction between prohibiting unauthorized leaves or breaks (lawful) and walking off the job or willfully restricting production (unlawful).

• See also Ambassador Services, Inc., 358 NLRB No. 130 (striking down rule prohibiting walking off job or leaving premises during working hours without permission because it reasonably could be construed as prohibiting Section 7 activity).

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Handbook Policies

Grooming standards

•Grooming policy that prohibited employees from wearing emblems, badges or buttons with messages on them other than employer-issued nametags or official hotel pins found to violate NLRA

•Board rules that mere maintenance of this policy in handbook was sufficient to set aside results of decertification election held in September 2006.

Jurys Boston Hotel, 356 NLRB No. 114 (2011)

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Handbook Policies

Code of Conduct

Corporate-wide code of business conduct and ethics policy requiring employees to report “any known or suspected violations of this Code, including any violations of the laws, rules, regulations, or policies that apply to [Hotel],” alleged to be overbroad and unlawful, because of its requirement that employees report violations to the employer, rather than choosing to report elsewhere, such as in social media.

Hyatt Hotels, Case No. 28-CA-61114 (settled)

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Practice Pointers

– Avoid ambiguous and overly-broad language and restrictions

– Limit language to what really needs protection

• Definition of “Confidential Information”

– Include clear statement that rule does not restrict employees inexercise of their rights under Section 7 of NLRA

• Provide examples of prohibited conduct to make clear doesn’t cover section 7 activity

• Provide examples of conduct excluded from prohibition

• Does not restrict employees from discussing wages, hours and terms and conditions of employment

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Noel Canning Decision• In February 2013, the D.C. Circuit Court of Appeals

ruled that President Obama’s three appointments to the NLRB in January 2012 were invalid.

• Court ruled that the U.S. Senate was not in recess at the time these appointments were made, so President could not utilize “recess appointment”procedure.

• Based on this, the Court ruled that the Board lacked a quorum when it issued its decision in Noel Canning (Feb. 2012)

• Under the court’s reasoning, all decisions by NLRB since January 2012 are at risk of being thrown out.

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Noel Canning Decision (cont.)

• The issue ultimately will be resolved by the Supreme Court; likely not before October 2013 at the earliest.

• Court’s decision does not mean the Board will “shut down.”

• NLRB has indicated that it will conduct “business as usual” despite the court’s ruling.

• Thus, employers ignore the Board’s recent rulings at

their peril.

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“But wait, there’s more!”

• In our next Webinar (March 21) we will review NLRB decisions regarding the following: – Access to employer’s property by off-duty to employees– Status of “at-will” statements– Status of class action waivers in arbitration agreements

– Unionized employers’ post-certification, pre-contract bargaining obligations

– Reversal on employers’ obligations to maintain dues checkoff following expiration of CBA

– Further update on Noel Canning– And more!

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Presentation Materials

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• Download: Click on “Handout” button at top right (three pieces of paper together). Click on name of presentation and proceed to download.


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CONTACT INFORMATIONHarriet C. Cooperman, EsquireSaul Ewing LLP500 E. Pratt Street, 9th FloorBaltimore, MD 21202Phone: 410.332.8974Email: [email protected]

Robert C. Nagle, EsquireSaul Ewing LLPCentre Square West1500 Market Street, 38th FloorPhiladelphia, PA 19102Phone: 215.972.7760Email: [email protected]

Edward R. Levin, EsquireSaul Ewing LLP1919 Pennsylvania Avenue, N.W.Suite 550Washington, DC 20006Phone: 202.338.3420Email: [email protected]


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DISCLAIMERThe content of this webinar and the presentation materials have been prepared by Saul Ewing for information purposes only. The provision and receipt of the information in this webinar and the presentation materials should not be considered legal advice, does not create a lawyer-client relationship, and should not be acted on without seeking professional counsel who have been informed of the specific facts. Should you wish to contact a presenter to obtain more information regarding your company's particular circumstances, it may be necessary to enter into an attorney/client relationship.

turbulent times in labor law part i saul ewing llp... · what has nlrb been doing? • requiring...

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