By Kyllan B. Kershaw, Esq.

Seyfarth synopsis: The Board majority holds firm to its standard for evaluating employer work rules despite Member Miscimarra’s vigorous dissent advocating for a new, clearer standard that takes into account an employer’s legitimate business justifications.

Last Wednesday, a split Board panel (Hirozawa, McFerran) held in William Beaumont Hospital and Jeri Antilla, 363 NLRB No. 162,  that several work rules promulgated by a Michigan hospital violated the National Labor Relations Act.  The Board’s analysis of the hospital’s work rules arose out of a dispute regarding whether the hospital acted lawfully in firing two nurses for bullying behavior following an investigation into the death of a newborn at the hospital.  The Board unanimously upheld the Administrative Law Judge’s finding that the terminations were lawful, but Member Miscimarra, in a scathing partial dissent, disagreed with the Board panel’s finding that certain work rules were unlawful. He called for the Board to adopt a new standard that would allow the Board to consider the degree of adverse impact a given rule might have on protected activity and the legitimate justifications an employer may have for maintaining such a rule.

The Board panel, in affirming the administrative law judge’s finding that several of the rules violated the Act, reached even farther–declaring two additional rules to be unlawful under the Board’s Lutheran Heritage standard.  Specifically, the Board panel found the hospital’s language prohibiting conduct that “impedes harmonious interactions and relationships” and “negative or disparaging comments about the…professional capabilities of an employee or physician to employees, physicians, patients, or visitors” to be unlawful because such language “would reasonably be construed to prohibit expressions of concerns over working conditions.”

In his dissent, Member Miscimarra called for the Board to abandon its Lutheran Heritage standard, under which he claimed that “reasonable work requirements have become like Lord Voldemort in Harry Potter: they are ever-present but must not be identified by name.”  In doing so, Member Miscimarra identified numerous defects with the Lutheran Heritage “reasonably construe” standard, including that the standard: (1) ignores legitimate employer justifications of particular rules; (2) invalidates facially neutral work rules solely because they are ambiguous;  and (3) prohibits the Board from differentiating among industries or taking specific events into consideration that may justify the work rule, noting that the hospital setting should have factored into the analysis of the rules in this case.  Member Miscimarra commented that the standard has resulted in extensive confusion and litigation, arguing that the application of the standard does not permit one to understand the difference between many “lawful” and “unlawful” rules.    Member Miscimarra noted that the Board’s standard stems from a misguided belief that unless employers correctly anticipate and carve out every possible overlap with NLRA coverage, employees are best served by not having employment policies, rules, and handbooks, claiming that “in this respect, Lutheran Heritage requires perfection that literally has become the enemy of the good.”

Employer Takeaways

Although Member Miscimarra’s dissent may offer some solace to employers frustrated by the Board’s recent rulings in the context of employer policies and work rules, unfortunately, the Board majority has chosen not to pursue a clearer standard for evaluating employment policies, once again leaving employers seeking guidance as to what constitutes a lawful work rule with confusion instead of answers. While the Board’s intense focus on workplace rules lingers, employers should consult their labor lawyers to ensure their work rules can withstand the Board’s scrutiny and to determine whether such narrowly-tailored lawful rules actually further the employer’s legitimate business interests.

 

By Paul Galligan and Samuel Sverdlov

Employers scored a big victory in In re Trump Entertainment Resorts, a case of first impression in the Third Circuit, which held that a debtor-employer can terminate their obligations under an expired Collective Bargaining Agreement (CBA) and implement the terms of a final offer.

Background

By way of background, Trump Entertainment employs 1,467 unionized workers in the Trump Taj Mahal casino in Atlantic City, New Jersey, most of whom are represented by UNITE HERE Local 54. Although the Taj Mahal is one of the preeminent casinos in Atlantic City, it filed for Chapter 11 bankruptcy protection on September 9, 2014. Trump Entertainment made several proposals aimed at keeping the Taj Mahal afloat, but the union staunchly refused the terms and engaged in a corporate campaign communicating with the Taj Mahal’s customers who had scheduled conferences at the Casino to urge them to take their business elsewhere.

The CBA expired on September 26, 2014, and Trump Enterprises filed a motion pursuant to 11 U.S.C. § 1113, “seeking to reject the CBA and implement the terms of [Trump Enterprise’s] last proposal to the union.” Section 1113 allows a Chapter 11 debtor to ‘reject’ its CBAs under certain circumstances, with the Bankruptcy Court’s approval. If the Bankruptcy Court denied Trump Entertainment’s motion, then Trump Entertainment would have to maintain the “status quo” and continue the terms of the expired CBA until it bargained to a legal impasse with the Union, a potentially long drawn out process.

The Bankruptcy Court for the District of Delaware balanced the need for an expedited process by which debtors could restructure labor obligations and protections necessary for union employees, and held that § 1113 was applicable to both expired and unexpired CBA’s. (519 B.R. 76 (Bankr. D. Del. 2014)).  However, the Court noted that “the Union was not focusing its efforts on negotiating to reach agreement with Debtors.”  The Court held that  it had the authority to authorize Trump Enterprise “to modify the expired CBA and implement the terms of [its] proposal.” UNITE HERE Local 54 thereafter appealed the Bankruptcy Court’s decision to the Third Circuit.

Third Circuit Decision

The Third Circuit affirmed the finding of the Bankruptcy Court. The Circuit Court only considered “whether the Bankruptcy Court may grant a motion to reject an expired CBA under § 1113.” Trump Enterprise, in the opinion of the Court, illustrated the very essence of a § 1113 rejection of a CBA.  Trump Enterprises needed to reject the CBA in order to restructure their company, and if they were unable to do so, they would be forced to liquidate.  Furthermore, the Court held that Trump Enterprises was very willing and forthright in their efforts to bargain in good faith, while the Union “stalled the bargaining sessions engaged in picketing, and attempted to harm [Trump Enterprise’s] business.”  As, Judge Roth explained, “it is preferable to preserve jobs through a rejection of a CBA, as opposed to losing the positions permanently by requiring the debtor to comply with the continuing obligations set out by the CBA.”

Advise for Employers

In the wake of this precedential opinion, employers entertaining a Chapter 11 bankruptcy can explore a § 1113 motion to reject their obligations under an expired CBA.  However, employers must remember that “before the bankruptcy court will consider an application to reject, the debtor must make a proposal, provide relevant information, meet at reasonable times, and confer in good faith.”  In this respect, employers would do well to follow in the footsteps of Trump Entertainment Resorts, and engage the union proactively as Trump Enterprises did with UNITE HERE.

It is important to note that Bankruptcy Courts are divided on whether § 1113 permits debtors to reject CBAs and to what extent. For instance, in Hostess Brands, Inc., 477 B.R. 378 (S.D.N.Y. 2012), the court refused to relieve a debtor from maintaining its obligations under an expired CBA under similar circumstances. Therefore if you are considering filing a Chapter 11 bankruptcy, and you have outstanding CBA obligations, you should contact your local Seyfarth Shaw attorney to decide whether a § 1113 is an available option.

By Kevin A. Fritz and Craig B. Simonsen

iStock_000048141232_LargeWould your company’s employee handbook pass a National Labor Relations Board (NLRB) social media review and investigation?

The U.S. Chamber of Commerce highlighted some troubling notions in a report issued last week: “Theater of the Absurd: The NLRB Takes on the Employee Handbook” (Chamber Report). The Chamber Report notes that “through a series of decisions and official guidance, the National Labor Relations Board (NLRB) has undertaken a campaign to outlaw heretofore uncontroversial rules found in employee handbooks and in employers’ social media policies—rules that employers maintain for a variety of legitimate business reasons.”  When it comes to protecting concerted activity, the NLRB has been anything but consistent in its application of the law and subsequent decisions.

In the realm of social media policies alone, the NLRB’s General Counsel’s Office issues Advice Memos that detail the results of “investigations in dozens of social media cases.” The Advice Memos claim to show many cases where “some provisions of employers’ social media policies were found to be overly-broad” and unlawful.  But the Chamber Report disputes the NLRB findings, noting that “unfortunately, in recent years the NLRB has changed. Rather than serving as an impartial referee, it has become dominated by a decidedly pro-union majority. These activist Board members have disregarded the overarching objectives of the NLRA and disrupted the careful balance that the Board has traditionally sought.”

And, more recently the NLRB’s General Counsel’s Office released its guidance memorandum to “help employers” draft compliant handbooks: “Report of the General Counsel Concerning Employer Rules,” GC-15-04 (March 18, 2015). The guidance sets out that the NLRB considers a policy or rule as unlawfully interfering with employees’ rights under the NLRA where an employee would “reasonably construe” the policy or rule to prohibit protected activity.” The Chamber Report indicates that the guidance “goes on to provide examples of lawful and unlawful employer policies. Unfortunately, many of the examples provided confuse matters even more given the similarities between that which is legal and that which allegedly is not.”

Our readers may appreciate the complexity through a real life example: Consider an NLRB decision where a technician had been warned by his employer three times over a five-month period for violating safety rules. The technician was finally fired after being seen on a ladder working without protective headwear, safety glasses or gloves. In November 2012, the NLRB found that the employer had a legitimate reason for firing the technician, dismissing his claim that he had been retaliated against for union activity (Dish Network Corp., N.L.R.B. A.L.J., No. 16-CA-62433 (11/14/12). The Chamber Report notes that while it didn’t take issue with the NLRB’s core finding in this case, it observed that the Board then went a step further, finding unlawful three provisions of the employer’s employee handbook that “had nothing to do with the underlying case.”  The motivation behind the NLRB’s decision is certainly concerning.

As an employer, it is not easy to maneuverer in this “legal” space.  From the NLRB finding that policies prohibiting “negative comments about fellow team members” to those which subject one to disciplinary action for “disclosure of proprietary information” as being illegal, employers are right to feel challenged and perhaps even intimidated by the rampage an sporadic nature the NLRB has taken. Employee handbooks are an important source for you to communicate your company’s policies and procedures. Given this current state of uncertainty and “decidedly pro-union majority,” be sure that your company materials are up-to-date and able to withstand a government inspector’s review.

Those with questions or concerns about any of these issues or topics are encouraged to reach out to the authors, your Seyfarth attorney, or any member of the Labor & Employee Relations, Social Media Practice Group, or Workplace Policies and Handbooks teams.

By Bradford L. Livingston, Esq.

On the eve of a new college football season, the referees at the National Labor Relations Board (NLRB) got it right on instant replay: they called off the game. In a ruling yesterday, the NLRB’s five Members unanimously declined to assert jurisdiction over Northwestern’s scholarship football athletes. There will be no union of college football players — at least for now.

In case you forgot the game being played during the 17 months since the NLRB Regional Director’s original decision that scholarship college football players are employees who may form a union under the National Labor Relations Act (NLRA), the facts are this: In early 2014 the College Athletes Players Association or CAPA, a union affiliated with The United Steelworkers, filed a petition seeking to represent Northwestern University’s scholarship football players. Following a hearing before Region 13 of the NLRB, on March 26, 2014, the Regional Director ordered a representation election, finding that it would “effectuate the purposes of the [National Labor Relations] Act to assert jurisdiction over scholarship athletes.” The NLRB conducted an election in April 2014 and impounded the ballots while Northwestern University appealed the Regional Director’s decision to the full NLRB. Following the filing of multiple briefs by both the parties and various amici curiae, the NLRB issued its ruling today. In this case, all 5 current members of the NLRB joined in the decision by outgoing member Harry Johnson, whose term expires on August 27.

While fans often disagree with both the referees’ and replay booth’s calls, this time the referees got it right. In earlier blog posts, College Football Unions: NLRB to Play the Game, Will the NLRB Tackle the NCAA?, College Football Unions: What Game Is Being Played?College Football Unions: Throw the Flag for a False Start, and in my testimony at a Congressional hearing on the issue, I noted various problems with a finding that college football players could be considered employees under the NLRA.

Although the referees got it right, they did so only by avoiding the central issue in the case. Rather than deciding whether or not scholarship athletes are employees under the NLRA, the Board found an astute and politically correct way for its three-Democrat Member majority to avoid antagonizing their friends in organized labor. Contrary to its Regional Director, the NLRB found that it “would not effectuate the policies of the Act” and therefore — as suggested in our original blog post — declined to asset jurisdiction over Northwestern’s scholarship athlete. In reaching its conclusion, the Board noted that college and professional sports are played not alone but against other teams. And at the professional level, all the teams and their players are typically covered by a common labor agreement. A single team with its own labor agreement would lead to an un-level playing field. Likewise, the NLRB noted that it can only assert jurisdiction over private universities, which represent only 17 of the 125 colleges and universities in the FBS or top level of college football. The vast majority of teams are public colleges and universities beyond the reach of the NLRA and NLRB. Rather than promoting uniformity and stability, the Board recognized that an inherent asymmetry would be created when different teams play by different rules. Therefore, the NLRB decided that a “no call” was the best call. Hedging its bets, however, the NLRB noted that the result might be different if circumstances changed or if a different petition were filed.

Like other instant replay decisions in college football, this decision cannot be appealed any further. Just as the Big Ten or SEC Commissioner cannot overturn referees’ decision on the field or from the instant replay booth, there is no court to which CAPA can now turn. Decisions of the NLRB in representation cases like this are final; so we will never know how Northwestern’s scholarship athletes voted. And while other courts will decide when (and fans can debate) whether college football players should be paid for participating in their sports under other laws and legal theories, it is now clear that college football players cannot unionize and bargain under the National Labor Relations Act (for the foreseeable future). So as we begin a new season of college football, let’s get set to enjoy the game on the gridiron rather than before the NLRB.

By: Tracy Billows

Although employers are not required by law to have employee handbooks, if an employer chooses to go down such a path, legal compliance and being current with latest trends is a must. A non-compliant employee handbook can be used in claims of discrimination, union grievances, and other employee-employer disputes. Does your employee handbook need to be updated? Test your knowledge of latest legal trends in employee handbooks.

True or False?

Employers should consider including a pregnancy accommodation policy in its handbook.

True. The Equal Employment Opportunity Commission issued Guidance in July, 2014 on pregnancy discrimination and related issues, including addressing accommodations of pregnant workers. Additionally, the issue of accommodating pregnant workers is on the U.S. Supreme Court’s agenda. A decision on this issue (Young v. UPS) is expected by the U.S. Supreme Court later this year. Regardless of the federal legal landscape, states and municipalities are passing pregnancy accommodation laws that require accommodation of pregnant workers, and in most cases provide greater rights and protections. Thus, employers need to review their employee handbooks for this issue.

True or False?

Non-union employers do not need to worry about the National Labor Relations Board guidance on Handbooks.

False. The National Labor Relations Act applies to all employers – union and non-union. The NLRB has been very active in challenging policies and handbooks of non-union employers, especially in the areas of Social Media, Employer Confidential Information and Rules of Conduct. All employers should be reviewing their handbooks in light of this guidance.

True or False?

There should be a carve out for the employment at will policy in any handbook that references the employer’s ability to change at any time any of the employer’s policies in the handbook.

True. It is best practice to include in any handbook a reference to an employer’s right to revise, modify or eliminate any policy at any time – except for the policy of at-will employment. An employer does not want to concede that a mere policy or handbook change can result in any changes to the at-will employment relationship that governs in most workplaces. It is important to maintain the at-will employment policy and relationship to prevent wrongful termination claims and breach of contract claims.

True or False?

We reviewed and revised our employee handbook in 2014 so we do not need to review again in 2015.

False. 2015 is shaping up to be a busy year in terms of employment law changes. The Department of Labor issued a final rule on same sex spouses and the Family Medical Leave Act.  Numerous states have paid sick leave laws taking effect in 2015. Pregnancy accommodation laws are continuing to be proposed and enacted. There are many other issues on the horizon and employers need to be paying attention to these developments.

How did you do? If you have any questions about this topic, please contact the author, who is also co-chair of Seyfarth’s Workplace Policies and Handbook Team, or your Seyfarth attorney.

By Charles F. Walters

This blog recently discussed the upswing in EEOC retaliation charges and what employers can and should do about this undeniable trend. A National Labor Relations Board (NLRB) case now before the D.C. Circuit Court of Appeals on appeal provides a powerful reminder that non-union employers must also be concerned about retaliating against employees for exercising their NLRA rights.

It’s no secret that more and more non-union employees having turned to the NLRB – and with plenty of success – for help when being terminated or subjected to other employer treatment with which they disagree. The current NLRB’s expansion of what constitutes “protected concerted” activity under the NLRA has made it much easier for employees to allege and ultimately prove they were disciplined for exercising their NLRA rights. In fact, from protecting employee criticism of their employers on social media, to striking down countless seemingly innocuous handbook policies, to prohibiting arbitration agreements with class action waivers, the NLRB has been an accommodating, cost-free forum for employees feeling aggrieved by their employer.

This phenomenon is evidenced by the NLRB decision earlier this year finding that Virginia-based Inova Health System violated the NLRA when firing a nurse because she engaged in protected concerted activity – some of which took place four years before her termination. The NLRB reached this result despite the employer terminating the nurse only after a detailed human resources investigation of multiple workplace hotline complaints revealed that she had created a hostile work environment, shared unwelcome details with colleagues regarding her sex life and regularly used unwelcome profanity at work. The NLRB also found that another nurse who engaged in protected concerted activity along with the terminated nurse later was unlawfully denied a promotion as a result this activity, while a second nurse was found to have been unlawfully suspended for her overly aggressive treatment of a human resources manager while engaged in protected concerted activity.

So, what should a non-union employer do in the face of this new reality?

First, employers must know the ever-changing contours of what constitutes protected concerted activity under the NLRA, which means keeping abreast of the regular NLRB decisions that establish these contours. Second, all managers involved in employee discipline and other policy enforcement – including human resources personnel – should be trained on the NLRA the same way they are trained on civil rights and other employment laws. Third, disciplinary decisions must be scoured for any employee protected concerted activity underlying, or even arguably underlying, the discipline. Fourth, employee handbooks and any other personnel policies should regularly be reviewed for NLRA compliance given that the mere existence of a policy that an employee reasonably believes prohibits NLRA-protected conduct is unlawful.

If you would like more information about this topic or preventative training options to guard against NLRA violations, then please contact the author or your Seyfarth attorney.

By: Bart A. Lazar

A company faced with a security breach has a lengthy “to do” list, things to accomplish with respect to its incident response plan. It must, among other things, determine the root cause of the vulnerability or breach, investigate and eliminate the vulnerability or breach, determine the full nature and extent of the breach, determine who to notify and finalize the notifications.

If the American Postal Workers Union (APWU) has its way, a unionized employer facing a security breach involving employee personal information would have yet another responsibility – bargaining over the impact of or response to the security breach.

The APWU has filed a complaint with the NLRB asserting that the United States Postal Service sent notice of the breach to employees on November 10, 2014, and offered the employees free credit monitoring for 1 year, but “did not give the Union advance notice that would enable it to negotiate over the impact and effects of the data breach on employees.” The Union’s complaint further states that by providing free credit monitoring, the USPS made a unilateral change in wages, hours and working conditions.

Under the various state database security notification laws and the HiTech provisions of HIPAA, employers that encounter a breach of personal information regarding employees, must, absent certain exceptions, notify the affected employees (or for a HIPAA breach, plan participants), as well as potentially notify regulators and others.

There is no legal requirement in the United States that companies must consult with their employees regarding the investigation and/or impact of a security breach involving employee data. In fact, it is important that information concerning potential security incidents be maintained confidential so that the investigation is not compromised. Therefore, the APWU is taking a novel, unprecedented stance in claiming that the USPS had an obligation to be at the table and bargain over what actions USPS would take with respect to investigating and/or remediating a breach.

Although it will be several months (at the earliest) before the NLRB issues any type of ruling or guidance on this matter, employers should consider this type of communication should a data breach occur.  In other words, while not legally required, it is certainly important and prudent for a company to consider all stakeholders in determining how to respond to a security breach. The goodwill of a company, and its relationships with employees and customers are  extremely valuable.

Since the wrong internal or external communications concerning a breach can have a significant impact on how actual and potential customers and employees, as well as shareholders, perceive the company we recommend that every incident response plan include a company’s public relations and communications experts in order to make sure that the proper groups are properly informed as to the status of a security incident and the measures a company is taking to protect affected individuals.

By: Paul Kehoe

As the dust settles on the 2014 midterm elections, Republicans have expanded their lead and the House of Representatives and taken control of the Senate with at least 52 and possibly 54 seats.  For employers, this could signal many positive developments in oversight, legislation, and appropriations over the coming year, but the election results will not end regulatory and sub-regulatory agency priorities over the next two years.

Appointments

Key appointments will likely face stiff opposition for various posts in the Administration over the next two years.  In that vein, the Senate Health, Education, Labor and Pensions Committee is holding confirmation hearings for pending EEOC nominations on November 13, 2014.  The Committee will consider David Lopez for another four year term as EEOC General Counsel and Charlotte Burrows as a new EEOC Commissioner for a five year term.  All indications are that the Senate will attempt to confirm Mr. Lopez and Ms. Burrows in the lame duck session of Congress.  If successful, the EEOC will again be fully seated, empowering a majority of Commissioners to issue controversial guidance in the area of reasonable accommodation requirements, restrictions on wellness plans, and to authorize litigation, if sought by the General Counsel, on cases that attempt to expand the reach of the law under the EEOC’s jurisdiction.

At the NLRB, the President just yesterday withdrew the re-nomination of Sharon Block and, instead, nominated Lauren McFerran, currently the chief labor counsel to the Senate HELP Committee.  Ms. Block was one of the recess appointees whose appointment was invalidated by the Supreme Court in the Noel Canning decision.  If Ms. McFerran is confirmed in the lame duck session, there will be a majority of three Democrat NLRB members for the remainder of the Obama Presidency.  The NLRB is still considering the expedited election regulations and other controversial regulatory and decision issues.

Oversight

In January, Senate Committee Chairmanships will be held by Republicans.  Executive overreach in many agencies, including the NLRB, OFCCP, and EEOC will likely be the subject of Senate oversight hearings.  Indeed, recent executive actions applicable to government contractors related to minimum wage (here), overtime exemptions under the Fair Labor Standards Act (here), and additional penalties for the violation of civil rights laws (here) are prime candidates for additional oversight.

In the House of Representatives, the Committee on Education and Workforce has actively conducted oversight on DOL, NLRB, and EEOC activities, joint-employer issues, minimum wage and Executive Orders which impact government contractors over the last two years.  With a larger majority in the House, continued oversight activity is expected.

Legislation

Republicans stressed during the midterms the necessity to repeal the Affordable Care Act.  Recognizing the wholesale repeal is unlikely given that the President would have to agree to repeal his signature accomplishment, Republicans will likely endeavor to repeal the medical device tax, adopt the 40-hour workweek threshold for full time employment, and other measures to limit the ACA’s applicability. We would also note that the Supreme Court just granted certiorari in King v Burwell which will address whether the Federal exchanges can include premium subsidies.   Depending upon the resolution of this case, some Congressional activity can be expected.

In addition, on September 16, 2014, Senator Alexander, the incoming chairman of the Senate HELP Committee, and Mitch McConnell introduced S. 2814, the National Labor Relations Board Reform Act, which would increase the number of Board Members to 6 and require a four vote majority for NLRB decision.  In the House, several bills are pending regarding EEOC overreach and its delegation of authority to the General Counsel.  With a Republican controlled Congress, each of these and other bills will likely gain some traction, though ultimate enactment remains questionable.

Appropriations

Funding for the government expires on December 11, 2014, which the lame duck Congress will have to address in the coming weeks.  It remains to be seen whether a short-term extension or an extension for the balance of Fiscal Year 2015 will be considered by Congress.  Come January, the Republican-controlled Congress will likely use its power of the purse to limit government overreach.  Last year, the House passed several appropriations bills, some of which contained riders limiting how the agencies spend funds.  For example, on May 30, 2014, the House voted to approve the 2015 Commerce, Justice, Science Appropriation bill, directing the EEOC to engage in good faith conciliations before filing suit.  Similar restrictions may be on the horizon for all agencies.

Conclusion

The coming months will be critical in determining how a Republican Congress and Democratic Administration will approach all questions, including important labor and employment issues.  Regardless, there will be plenty of activity from agencies trying to adopt new policy positions in the final two years of the Administration.  Please continue to follow this blog for periodic updates on how employers may be impacted by these changes.

 

By: Jonathan L. Brophy

Employers know that the National Labor Relations Board may scrutinize their policies to determine if they violate the National Labor Relations Act (the “Act”) – and specifically, Section 7’s protections for “concerted activity.”

When searching for clear guidance on what standards to follow, employers soon find that the NLRB’s most recent fact sheet only addressed cases as recent as 2012 – leaving them to the unenviable task of navigating the myriad Administrative Law Judge Decisions (which are not legal binding precedent unless they have been adopted by the Board on review of exceptions), unpublished Board Decisions (also not binding precedent for anyone other than the parties at issue) and Board Decisions.  Three recent cases from the summer of 2014 demonstrate that the intersection of social media, employer policies and the Act, are still at the forefront of the NLRB’s agenda.  While these decisions do not provide clear standards, they offer valuable take-aways that employers should be aware of when drafting or reviewing their social media policies.

Encouraging Civility Is Not Unlawful

To be protected under Section 7 of the Act, employee conduct must be both “concerted” and engaged in for the purpose of “mutual aid or protection.”  Policies that restrict those activities can violate the Act.

In June 2014, an administrative law judge issued a decision finding that the employer’s social media policy did not violate the Act.  The primary policy language at issue was as follows: “While your free time is generally not subject to any restriction by the Company, the Company urges all employees not to post information regarding the Company, their jobs, or other employees, which could lead to morale issues in the workplace or detrimentally affect the Company’s business.”

The judge examined whether employees would reasonably construe the language to prohibit Section 7 activity and concluded that the policy language was lawful.  Specifically, it was not the job-related subject matter of the postings that were of concern to the employer, rather it was the manner in which the subject matter was articulated and debated among the employees.  The judge found that the language at issue “urged [employees] to be civil with others in posting job-related material and discussions on social media sites” and that such language did not violate the Act.  The policy could be understood under common parlance to prohibit posting of personal (not personnel) information about social relationships and similar private matters, which could result in morale problems or which could also constitute “harassment” (to which the social media policy referred). The judge also found that the policy did not prohibit posting of “personnel” information or “payroll information” or “wage-related information,” which would be unlawful under the Act.

The take-away here for employers is to ensure that the purposes of the social media policy (and other policies generally) are clearly articulated to ensure that discussion of subject matter protected by the Act (i.e., wages, work environment, job issues, etc.) are not prohibited.

Avoid Overbroad Confidentiality Rules

On August 11, 2014, the Board issued a decision in which it found that an employee had engaged in concerted, protected activity when she enlisted the help of coworkers to report a claim of sexual harassment.

In a footnote to the decision, the Board found that employer’s handbook violated the Act because it contained an overbroad and discriminatory confidentiality clause.  However, the Board also found that the employer’s instruction “not to obtain additional statements from her coworkers in connection with that Complaint” did not, in itself, violate the Act.  Specifically, the employer had instructed the employee to let the Human Resources representative obtain additional statements.  The company did not prohibit the employee from discussing the pending investigation with her coworkers, asking them to be witnesses for her, bringing subsequent complaints, or obtaining statements from coworkers in the future.  The Board acknowledged that employers have a “legitimate business interest in investigating facially valid complaints of employee misconduct, including complaints of harassment.”

The take-away here for employers is to ensure that company policies, whether related to social media or not, are not so restrictive as to be construed against employees exercising their Section 7 rights.

Savings Clause For Policy Doesn’t Save Policy

On August 22, 2014, the Board issued another decision where it determined that the employer unlawfully terminated an employee who “liked” a comment about their employer.  (Click here to read Seyfarth’s One Minute Memo on that decision).

The Board also examined whether the employer’s social media policy violated the Act by analyzing three questions, whether: “(1) employees would reasonably construe the language to prohibit Section 7 activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7 rights.”

The Board found that the employer’s prohibition against “inappropriate discussions about the company, management, and/or coworkers” on social media was “sufficiently imprecise” such that employees would reasonably understand it to encompass protected Section 7 activity.  The employer’s general savings clause that the policy “is of no force or effect” if “state or federal law precludes it” was not enough, especially because the employer had, in fact, terminated two employees whose Facebook discussion of tax withholding issues was concerted, protected activity.  The Board also found it instructive (and harmful to the employer) that the policy provided “no illustrative examples of what the [employer] consider[ed] to be ‘inappropriate.’”

The take-away here for employers is that social media policies (and other policies, generally) should provide fairly specific examples of prohibited conduct under their policies.  Savings clauses likely will no longer survive NLRB scrutiny and policies should be crafted to avoid being overly broad, but specific enough to accomplish the protections desired.

Conclusion

Employers should review their social media policies to ensure that the policies provide the most protection for the employer to enforce its anti-harassment, trade secret and other policies, but that the policies also do not unlawfully prohibit protected concerted activity.

Be sure to download Seyfarth Shaw’s Social Media Desktop Guide by clicking here.  Or contact the author or a member of Seyfarth Shaw’s Social Media Practice Group to get more information.

By Taron K. Murakami

Employees will not make “negative comments about our fellow team members” and will not “engage in or listen to negativity or gossip.”[1]

Company prohibits “discourteous or inappropriate attitude or behavior to passengers, other employees or members of the public,” and “disorderly conduct during working hours.”[2]

“Gossip is not tolerated at [the Company].  Employees that participate in or instigate gossip about the company, an employee, or customer will receive disciplinary action.”[3]

Dissemination of confidential information within the Company, such as personal or financial information, etc., will subject the responsible employee to disciplinary action or possible termination.[4]

Do these policies look familiar to you?  Perhaps you have them, or similar versions, in your company’s employee handbook.  Employers often put in writing the expectations for its employees’ conduct, with the “standard language” that violation of those policies can lead to discipline up to and including termination of employment.  Employers may be surprised to learn, however, that the National Labor Relations Board (“NLRB”) recently found each of the above policies to be unlawful under the National Labor Relations Act (“NLRA”).

An employer’s maintenance of an overly broad rule or policy can be held to interfere with the rights of employees to engage in activity protected by Section 7 of the NLRA, which gives employees the right to form, join or assist unions, bargain collectively through representatives and engage in other “concerted activities.”  Although some employers assume that Section 7 protects only conduct engaged in during union organizing activity or in an already union workplace, the NLRB applies these protections to non-union workplaces as well as those where the employees may have no interest in unionizing.

The NLRB’s determination of whether a policy or rule violates the Act typically turns on a showing of one of the following:

  • Employees could reasonably construe that the language prohibits Section 7 activities;
  • The rule is promulgated in response to union activity; or
  • The rule has been applied to restrict the exercise of Section 7 rights.

The NLRB found that each of the above policies was overbroad and could reasonably be construed by employees to prohibit protected concerted activity under Section 7.

In another example, earlier this year, an NLRB administrative law judge found unlawful several policies that related to providing service to customers. [5]  Specifically, the ALJ found that a restaurant’s policies prohibiting “insubordination to a manager or lack of respect and cooperation with fellow employees or guests” and “disrespect to guests including discussing tips, profanity or negative comments or actions” interfered with protected rights.  It is hard to believe that an employer, particularly one in the service industry, could not establish a policy that requires its employees to treat its customers with respect, but, that is exactly what happened here.  This case is more fully discussed here.

Further complicating things for employers is the lack of clarity in the NLRB’s many different decisions striking down these so-called “overbroad” handbook policies, making it difficult to predict whether a given rule or policy will be deemed lawful or not.  Even worse, the NLRB has been scrutinizing employer policies even when its investigation arose from employee complaints that have nothing to do with the employer’s policies in the first place.  The result in many cases is that an employee can get the NLRB to issue a complaint asserting that the employee’s termination violates the NLRA, leaving the employer facing expensive and time-consuming litigation against an employee with free legal representation through the NLRB’s General Counsel office.

Given the current NLRB landscape, all employerseven those likely to never be unionizedshould review carefully their employee policies and handbooks to assess their compliance with current NLRB case law.  This, in turn, will allow companies to gauge their risk tolerance or make appropriate changes in the increasingly difficult effort to balance control of their workplace and compliance with the NLRA.  For further guidance and assistance, contact the author or your Seyfarth Shaw attorney.