By David S. Baffa, Noah A. Finkel, and Joseph S. Turner

Seyfarth Synopsis: Congress has once again proposed legislation that would seek to ban mandatory workplace arbitration of employment claims, despite a string of United States Supreme Court decisions upholding arbitration and class/collective action waivers as a lawful and appropriate mechanism to resolve workplace disputes. 

H.R. 7109, the Restoring Justice for Workers Act, was introduced by Representative Jerrold Nadler, D-N.Y., and Representative Bobby Scott, D-Va., with 58 Democratic co-sponsors.  Similar legislation is expected to be introduced in the Senate by Senator Patty Murray, D-Wash, with eight Democratic co-sponsors.  The proposed legislation would  overturn the U.S. Supreme Court’s decision in Epic Systems, and would amend the National Labor Relations Act to specifically prohibit class and collective action waivers under a new “Section 8(a)(6).”

As proposed, the new law would prohibit any pre-dispute agreement requiring arbitration of employment disputes.  The law also would prohibit post-dispute agreements to arbitrate, unless the agreement is obtained without coercion or condition of employment-related privilege or benefit.  Employees entering into voluntary post-dispute agreements also must be made aware of their rights under what would be a new section of the National Labor Relations Act.  That new section would make it an unfair labor practice to “enter into or attempt to enforce any [pre-dispute] agreement” that would bar or prohibit class or collective actions relating to employment, or to retaliate against any employee for refusing to promise not to pursue a class claim.

While there is no chance that this bill will move in the House of Representatives as currently comprised, it previews the legislation Democrats are likely to pursue if the House changes control next week.  A bill like this could even put a narrowly-controlled Republican Senate to the test, as the perceived unfairness of pre-dispute mandatory arbitration has been the target of considerable media attention, social media campaigns, and as recently as yesterday — large-scale employee activism.  As such, protecting mandatory arbitration of workplace disputes may be an issue on which even conservative legislators might waver.

Indeed, this is not Congress’ first attempt to ban workplace arbitration.  Before the Supreme Court’s decision in Epic Systems, and as part of the #metoo movement, Congress introduced in December 2017, bi-partisan legislation ostensibly aimed at preventing employers from enforcing arbitration agreements of sexual harassment claims.  That bill, “Ending Forced Arbitration of  Sexual Harassment Act,” was introduced by Senator Kristen Gillibrand, D-NY (and attracted some Republic support), but was penned in a way that would actually ban workplace arbitration in its entirety.  We figured it was an oversight at the time, as written in our blog, “Slow Down Congress: You Are About to Render the FAA Inapplicable to Employment Disputes (and Class Waivers), and You Probably Don’t Realize It.”  Clearly, this week’s Halloween bill was no accident.

Most legislative action against workplace arbitration has centered on the idea of prohibiting arbitration of sexual harassment claims, and by extension all other Title VII claims.  Among the earliest efforts begun in 2009, when — perhaps ironically — then-Senator Al Franken pursued the Arbitration Fairness Act, which sought to prohibit the mandatory arbitration of sexual harassment claims.  While that legislation was not successful, Senator Franken’s efforts led to provisions in the Department of Defense Appropriations Act of 2010, which to this day prohibits contractors to the U.S. DoD, with limited exceptions, from requiring arbitration of Title VII claims (including sexual harassment claims).  Under President Obama, the DoD prohibition was expanded by his Fair Pay and Safe Workplaces Executive Order on July 31, 2014, effective January 2016, to all federal contractors.  President Trump, however, rescinded this EO shortly after taking office in late 2016.

Several state legislatures have sought to ban mandatory arbitration of sexual harassment claims.  Washington, Maryland, and New York each passed laws that would prohibit mandatory arbitration of sexual harassment claims, but those laws are either explicitly or presumptively preempted by the Federal Arbitration Act.  See our Client Alert on the New York Ban.

Facing increasing headwinds against mandatory arbitration of sexual harassment claims, several large companies have proactively and publicly declared that they will exempt sexual harassment claims from existing mandatory arbitration programs.  Other companies also are considering more limited arbitration programs, such as mandatory arbitration and class waivers for wage-hour claims only.  But the Halloween bill and other attempts to ban workplace arbitration altogether are also becoming more common following Epic.  The California legislature passed a law that would have barred arbitration of any violation of the California Labor Code or the Fair Employment and Housing Act, but it was vetoed by Governor Brown on September 30, 2018.  Governor Brown’s term ends this year, and on November 6th Californians will pick a new Governor of California to take office on January 7, 2019.

Kentucky also recently joined the fray.  On September 27, 2018, the Kentucky Supreme Court, in Northern Kentucky Area Development District v. Snyder shot down a workplace arbitration agreement on the basis that a mandatory arbitration agreement for employment claims is prohibited by Kentucky law, and not preempted by the Federal Arbitration Act.   Kentucky’s law prohibits any employer from requiring as a condition of employment an employee to “waive, arbitrate, or otherwise diminish any existing or future claim, right, or benefit…”.  The Court ruled that the statute was not an anti-arbitration clause provision, but an anti-employment discrimination provision.  Of course, calling arbitration a diminution of rights are “fightin’ words” to the U.S. Supreme Court, so we remain on the lookout for a cert petition.

For now, employers are staying the course.  Many companies remain interested in implementing dispute resolution procedures and mandatory arbitration programs that would limit their exposure to class and collective actions.  Most employers report faster and more efficient resolution of workplace grievances and concerns, with more ability to direct money and time to the resolution of real complaints, rather than simply to line the pockets of class action plaintiffs’ lawyers.

For more information on this topic, please contact the authors, your Seyfarth Attorney, or any member of the Firm’s Labor & Employee Relations Team.

By Kristen Peters

Seyfarth Synopsis: Even if bad Glassdoor reviews have you feeling like you need to fight back, employers should stay out of the ring, and instead implement social media policies that clearly define prohibited behavior and disclosures, while spelling out the consequences for violations. Employers must not retaliate against employees for their lawful out-of-office behavior.

People are used to sharing everything about their lives—from what they ate for breakfast to the funny name on their Starbucks Frappuccino. But this behavior can be scary for employers when current and former employees take to social media to complain about their jobs—or even defame their boss. Of particular interest are online platforms such as Glassdoor, which purport to provide “inside” information about working conditions, salaries, and company culture.

So what can an employer do when an employee posts a negative comment on Glassdoor about the company? The answer is … not much. The law often protects an employee’s off-duty speech. But the law does not protect defamatory speech, and it does not protect the disclosure of confidential, protected information. So proactive employers can take steps to make sure they are not unfairly smeared online and that their trade secrets are protected. We have a few suggestions in that regard.

What Are You Tryin’ To Prove: Don’t Get In The Ring

Websites such as Glassdoor, which has about 30 million monthly users, allow current and former employees to criticize or praise a company, typically through anonymous posts. Though many such sites screen critiques to prevent the posting of offensive comments and those that would disclose private information, they nonetheless present a conundrum for employers: Do you ignore criticism—even if it’s false—or do you respond to it? The former tactic can permit damage to an employer brand to go unchecked; the latter can make an employer look defensive.

In this new age of information, job applicants search employer review sites for information about companies. Responding to a negative review can help your brand if you do so in a way that shows the organization is genuinely committed to improving. But a response could also provide more fodder for further negativity, so it’s best to try to get ahead of the problem by making changes in-house, if necessary.

If your employees are posting on social media outside of working hours, California’s constitutional right to privacy can protect them from retaliation. Labor Code section 96(k) protects employees where they have engaged in lawful conduct asserting “recognized constitutional rights,” such as free speech postings on social media, occurring during nonworking hours away from the employer’s premises. A better avenue is to get ahead of the problem and educate employees about what they can and can’t post online about the company.

Put Your Robe On—And Implement a Social Media Policy

You can restrict free speech online for current employees with a social media policy (but only up to a point!). Employers should have a social media policy that prohibits posting confidential information about the company (and perhaps about posting anything about the company at all) without permission from the company’s public relations group. Every employee is required to follow the company’s legally compliant policies even if they are stricter than what the law would otherwise allow. If an employee violates your policies, that employee could be subject to employment discipline up to and including termination.

That said, there are limits to the restrictions employers can place on what employees can say about them online. The National Labor Relations Act protects the rights of workers to discuss wages and working conditions with other workers. These protections apply to posts on social media, so your social media policy cannot prevent employees from communicating with other employees online about the company’s pay or working conditions, such as might be the case with a Glassdoor review.

For example, in analyzing one company’s social media policy that forbade employees from making anonymous posts about the company online, the NLRB’s general counsel found that “requiring employees to publicly self-identify in order to participate in protected activity imposes an unwarranted burden on Section 7 rights [of the National Labor Relations Act]. Thus, we found this rule banning anonymous comments unlawfully overbroad.”

You Never Got Me Down—Employers’ One-Two Punch Combo for Dealing with Social Media

  • It is prudent for employers to prepare and implement a social media in the workplace policy in order to avoid risks of disclosure of confidential and proprietary information and claims of cyberbullying, harassment, and discrimination.
  • Social media policies should clearly articulate the legitimate business interests the employer seeks to protect, as well as provide clear definitions of prohibited behavior and private and confidential information, and spell out the consequences for violations of the policy.
  • Employers should use caution when disciplining employees based on social networking activities, as certain union and nonunion employee rights need to be considered.
  • An employer may discipline an employee for posting negative comments on a social networking site if the employee’s comments are offensive or inappropriate, and not related to employment issues, and should do so on a consistent basis.

Workplace Solutions: Employers should open up a dialogue with employees about social media and encourage them to bring grievances to Human Resources, instead of airing their grievances online. Employers should also avoid retaliating against employees for posting on social media outside of work hours, and implement social media policies that clearly articulate the penalties for posting confidential information, and any defamatory statements.

Seyfarth Synopsis: Last week, members of the Chicago L&E Team hosted the Fourth Quarter Breakfast Briefing to a packed room.  This Briefing looked at four key governmental agencies/trends (OSHA, OFCCP and equal pay, EEOC, and NLRB) to review key highlights from 2017 and how 2018 was shaping up.

In case you missed it, here are the slides from the presentation.

Please consider joining us for Firm Breakfast Briefings (which also offer CLE credit if that’s on your yearly “to do” list).  Upcoming topics likely include the ongoing issues impacting ADA/FMLA and other leave laws; paid sick leave; and other emerging topics in HR and employment law. We will be announcing dates for 2018 Chicago briefings in the next several weeks; so be on the (Employment Law) “Lookout” for those emails.

 

By Christopher M. Cascino

Synopsis: On May 25, 2017, Seyfarth attorneys Chris DeGroff, Noah Finkel, and Brad Livingston presented their insights on how the Trump administration will affect employers.  Specifically, they discussed the effect the Trump administration is having and will have on the EEOC, the DOL’s Wage and Hour Division, and the NLRB.  All presenters agreed that, while the Trump administration will have an effect on these agencies, it will take time for the changes to take place.

The Presentation

Chris began the presentation by discussing the EEOC.  He observed that the new administration has not yet replaced the high-ranking EEOC officials who set EEOC policy.  He pointed out that the majority of the EEOC still consists of Democratic appointees, though observed that this will change around July 2017.  He further pointed out that the General Counsel position remains unfilled.  When that is filled, Chris thinks we should have a better idea about the direction the EEOC will head in the Trump administration.

Chris discussed the ways in which the Trump administration might affect the EEOC’s strategic enforcement priorities.  For example, Chris pointed out that the EEOC’s strategic priority of eliminating systemic barriers to hiring will likely be a focus of a Trump administration focused on job growth, while strategic priorities like eliminating pay disparities might be less of a focus to the administration.

Chris concluded by pointing out that the EEOC has shown itself to be resilient to changes in administrations.  In the past, it has been aggressive after changes from a Democratic to a Republican administration.  That trend appears to have continued, as the EEOC’s lawsuit filings are up 75% over this time last year.  Chris observed that this may be because the EEOC may be trying to justify continued funding from what could be a less friendly administration.

Noah then spoke about how the Trump administration will affect the DOL’s Wage and Hour Division.  Like Chris, Noah pointed out that Trump has not been able to fill the key DOL positions.  While the administration has put in place a Secretary of Labor, none of the three key policymaking positions in the Wage & Hour Division – the Administrator, Deputy Administrator, and Solicitor of Labor – have been filled by Trump’s administration.  In fact, the   Administrator and Deputy Administrator positions are vacant, and the current Solicitor of Labor is temporary.  Noah observed that, when the administration fills these positions, we will have a better idea about how the Wage and Hour Division will function under the Trump administration.

Noah stated that, though the DOL’s Wage and Hour Division grew under the Obama administration, there are no proposed changes to its funding in the Trump administration’s proposed budget.  As a result, like with the EEOC, while there could be a change in the focus of wage and hour investigations, the actual number of investigations will probably remain steady.

Noah pointed out that probably the biggest outstanding question is how the Trump DOL will handle the rule promulgated under the Obama administration raising the wage needed to qualify for the white collar exemption.  Currently, the rule is not in effect because a federal judge enjoined the DOL from enforcing it.  The injunction is on appeal and, to date, the Trump administration has not filed a brief on the appeal.  Noah said we should look for the Trump administration’s position on appeal to see where the law is heading on the wage needed for the white collar exemption.  For more information about Noah’s presentation, see link.

Brad  then presented on changes to expect from the NLRB.  As with the EEOC and the DOL’s Wage & Hour Division, Brad stated that change within the NLRB will take time because the Trump administration has not yet put its appointees into place.  At this point, there are two vacancies on the five member NLRB.  Its chair is a Republican appointee whose term ends this December, and its other two current members are Democratic appointees whose terms end in late 2018 and 2019.  Although Trump can create a Republican-appointed majority by filling the two vacancies, he has not done so.

Brad stated that even after Republican appointees are a majority of the NLRB, change will take time because the NLRB tends to interpret the law in decisions rather than through rulemaking.  As a result, it will have to wait for the right case to come before it before it can change its view of the law.

Brad argued that the Obama administration’s NLRB was the most aggressive in limiting the rights of employers and expanding the rights of individual employees and unions in history.  He emphasized that, while a Trump NLRB will likely take a different course and even overturn many of the recent decisions of the NLRB, it will take time before these changes are made.  For more information about Brad’s presentation, see link.

Implications For Employers

While the Trump administration will result in changes to the way government agencies interact with employers, these changes will occur gradually.  Further, employers should not expect a decrease in enforcement actions brought by government agencies against employers.  The latest budget proposal out of the Trump administration keeps funding for these agencies steady, which will allow them to continue to operate at the level they operated at in the prior administration.

 

 

By Karla E. Sanchez and Craig B. Simonsen

Seyfarth Synopsis: Employer must reinstate four employees after it terminated the employees for agreeing with a former coworker’s email that complained about their terms and conditions of employment.

Recently, a National Labor Relations Board Administrative Law Judge ruled that a restaurant unlawfully reprimanded and discharged several employees in violation of Section 8(a)(1) of the National Labor Relations ActMexican Radio Corp., Case No. 02-CA-168989 (April 26, 2017).

A series of disagreements between a new manager and several of the restaurant’s employees led to several employees reaching out to management to complain about the new manager and to one employee quitting her employment. After resigning, the employee sent management and several of her former coworkers a lengthy email that management described as “hurtful and mean spirited.”  The email went through the reasons why she had worked at the restaurant, why she had loved working with her coworkers, and how the new manager had changed that.  She complained about how the new manager treated them, how several coworkers had complained to other managers, who according to her, did nothing, and she alleged that the new manager was engaging in unlawful conduct. Four employees replied to the email in agreement with the sender and thanked her for sending the email.

Management, who also received the coworkers’ replies, viewed the replies as “deeply insubordinate.” As a result, management decided to meet with the four coworkers to ask them on an individual basis why they had supported their former coworker and agreed with the contents of the email. All four were discharged for, among other things, allegedly engaging in insubordination and agreeing with an email that contained “false accusations of management” and had used “inappropriate language,” including profanity.

The ALJ found that the restaurant unlawfully discharged the four employees for replying to the former coworkers’ email. The ALJ found that the employees’ conduct had been protected, concerted activity. The ALJ noted that these four employees had complained to management about the new manager and about their working conditions and that their replies to the email was an extension of this protected, concerted activity. The email itself also addressed their working conditions, and thus, responding to it was also protected, concerted activity.

The restaurant tried to argue that the email was “opprobrious conduct,” and therefore, lost the protections of the Act. The ALJ disagreed, finding:

  • The four employees did not add anything negative to the original email;
  • The email was a part of an ongoing dialogue between the restaurant and the workers;
  • The email contained little profanity and did not constitute insubordination, but rather, was “a critique of the management style” of the restaurant;
  • The email was distributed internally and did not cause a loss of reputation or business for the restaurant; and
  • The email did not cause a disruption of the business.

The ALJ ordered the restaurant to reinstate the four employees to their former positions, to make them whole for their lost earnings, to pay them for their job-search and interim employment expenses, to remove any reprimands from their files, and to post at the restaurant a standard NLRB notice.

The takeaway for employers:  Employers must be careful when confronted by employees’ criticisms, complaints, and allegations, whether in person, by email, or by posting on social media platforms.  While some “complaints” might not be protected by law and/or might constitute insubordination, an employer should discuss the particulars with an attorney before determining whether the conduct warrants discipline or termination.  Some “complaints,” even when profanity is used and even when they are hurtful to the reader, are protected under the NLRA or other laws, and adverse conduct taken against the employees will be found to be unlawful.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Social Media Team or the Workplace Policies and Handbooks Team.

By Ashley Laken

Seyfarth Synopsis: NLRB affirms ALJ’s ruling finding that a union member’s criticisms on Facebook of the union that represented him were protected by the NLRA.

On February 7, 2017, in Laborers’ International Union of North America, Local Union No. 91, 365 NLRB No. 28, the National Labor Relations Board affirmed an NLRB administrative law judge’s ruling that found that the Laborer’s International Union of North America Local 91 violated the National Labor Relations Act by punishing one of its members for criticizing the union’s business manager on Facebook. We had previously blogged about the ALJ’s earlier decision.

The member’s Facebook posts criticized the union’s business manager for allowing a local politician to become a journeyman without first going through the union’s five year apprenticeship program, and the union punished the member by fining him $5,000, suspending his union membership for two years, and taking him off of its out-of-work referral list.

In finding that the union’s actions were unlawful, the Board observed that it is “elementary” that an employee’s right to engage in intraunion activities opposing the current leadership of his union is concerted activity protected by Section 7 of the NLRA, and therefore found that the member had engaged in protected concerted activity by posting his criticisms of the union’s business manager on Facebook.

The Board then examined whether the union’s interests outweighed the member’s Section 7 rights, and found that they did not. The Board reasoned that the member’s Section 7 right to press the union to change its policies outweighed the union’s vague claim that its reputation was damaged. The Board ordered the union to make the member whole for any loss of earnings he suffered as a result of the unlawful action taken against him, including backpay with interest compounded daily and his search-for-work expenses.

The decision highlights that not only are employee criticisms of their employers potentially protected by Section 7, employee criticisms of the labor unions that represent them may also be protected by Section 7.

For more information on this or any related topic please contact the author, your Seyfarth attorney, or any member of the Labor & Employee Relations Team.

 

By: Ashley K. Laken, Esq.

Seyfarth Synopsis: NLRB rules that the operators of the Detroit Masonic Temple unlawfully refused to bargain with a union that represented various engineers and maintenance workers at the temple, even though none of the remaining members of the bargaining unit were union members.

NLRB Chairman Pearce and Members Miscimarra and McFerran unanimously ruled that the Masonic Temple Association of Detroit and 450 Temple, Inc. violated the National Labor Relations Act by refusing to bargain with Local 324 of the International Union of Operating Engineers for a successor collective bargaining agreement. Masonic Temple Association of Detroit, 364 NLRB No. 150 (Nov. 29, 2016).

Facts

The Union had represented employees at the temple since approximately 1968. The most recent collective bargaining agreement covering the temple expired in early 2010, and the Association began operating the temple shortly thereafter.  At the time, there were approximately ten members in the bargaining unit, two of whom were dues-paying Union members.  In mid-December 2010, the Union sent the Association a written request to bargain over a new CBA.  The Association did not respond, and in January 2011, the Union filed an unfair labor practice charge against the Association for refusing to bargain in good faith.  The parties entered into a settlement agreement, with the Association agreeing to recognize the Union and bargain in good faith as a successor employer, and they met approximately once per month between January 2011 and May 2011.

After the last negotiation session in May 2011, the Union was told that a new unnamed entity would take over management of the temple and that the Union should wait until the changeover to negotiate a CBA with that entity. In the fall of 2011, the Detroit Masonic Temple Theater Company took over management of the Temple, and the Union held one negotiation session with that entity in January 2012.  The Association and the Theater Company ended their relationship in November 2012, and shortly thereafter, 450 Temple Inc. took over management of the temple.

From late 2012 until January 2015, the Union made multiple attempts to restart negotiation discussions, but in January 2015, the President of the Association and 450 allegedly told the Union that because Michigan had become a right-to-work state and there were no longer any Union members working for the temple, he did not feel it necessary to and would not bargain with the Union. In response, the Union filed the unfair labor practice charge at issue in this case.

Board’s Decision

An administrative law judge found that the Association and 450 were a single employer, in part because the Association had 100% ownership of 450 and they operated out of the same office, and no exceptions were filed in response to that ruling. Thus, the Board’s decision did not address this issue.

Regarding the merits of the charge, the Association and 450 argued that they did not violate the Act because the Union was not the exclusive representative of a majority of employees in the bargaining unit, pointing to the fact that none of the employees in the bargaining unit were Union members. The Administrative Law Judge (and the Board) disagreed, observing that an employer may rebut the continuing presumption of an incumbent union’s majority status and unilaterally withdraw recognition only on a showing that the union has in fact lost the support of a majority of the employees in the bargaining unit, and that bargaining unit employees’ union membership status is not determinative of the employer’s obligation to bargain.  In other words, evidence of a desire to withdraw from membership in the union is insufficient proof that the union has in fact lost the support of a majority of the unit.

The Board found that there was no evidence of any action taken by the bargaining unit employees to express their lack of support for the Union, such as a petition to decertify the Union or statements by the employees that they no longer wanted to be represented by the Union. The Board ordered the Association and 450 to bargain with the Union on request and to post a notice to employees.

Employer Takeaway

The decision highlights the fact that there is a distinction between an employee’s desire to be a member of a union and his or her desire to be represented by a union.  Even if the majority of employees in a bargaining unit are not union members, that does not necessarily mean the union has lost its majority support.  Employers that have questions about the status of an incumbent union’s support should connect with their labor attorney to ensure they do not engage in conduct that would run afoul of the Act.

By Michael Rybicki, Esq.

Seyfarth Summary: The relevance of the National Labor Relations Act to industries and business sectors that have not traditionally had to deal with its implications – such as hedge funds.

The New York Times recently ran on the front page of its business section a lengthy article discussing the National Labor Relation’s Board challenge to a number of provisions of an employment agreement that Bridgewater Associates, the world’s biggest hedge fund firm, requires each full-time employee to sign. Under the headline Confronting Wall Street’s Secretive Culture – N.L.R.B. Challenges Confidentiality Clauses, the article notes that the Board is challenging Bridgewater’s confidentiality, non-disparagement, and arbitration clauses and went on to state “[t]he unusual action is calling into question longstanding practices and prompting some companies to re-examine their employment agreements.”

With all deference to The Times, however, for a number of years the Board has been finding confidentiality provisions (see e.g., Target Corporation, 359 NLRB No. 103 (2013)) and non-disparagement clauses (see Dish Network Corporation, 359 NLRB No. 108 (2013)) unlawful and has steadfastly maintained, despite much criticism from the courts, that clauses restricting employees to arbitrating disputes are unlawful (D. R. Horton, Inc., 357 NLRB 184 (2012)). If anything is “unusual” – if unsurprising – it is that the Board is going after a hedge fund.

Although many employers (and some of their attorneys) think that the application of the National Labor Relations Act is limited to union-represented employees or at least limited to union or union-related activities, such as collective bargaining, union organizing, or union strikes, hand billing, picketing, or boycotts, the Act’s coverage is much broader. As the Board’s website notes:

  • The NLRA applies to most private sector employers, including manufacturers, retailers, private universities, and health care facilities.
  • Employees at union and non-union workplaces have the right to help each other by sharing information, signing petitions and seeking to improve wages and working conditions in a variety of ways.See NLRB Website: FAQ’s.

The Complaint against Bridgewater (Case Number: 01-CA-169426 (06/30/2016)) is not the first one in the financial sector. For example, as Seyfarth Attorney Ashley Laken noted, the D.C. Circuit recently upheld the Board’s finding that the confidentiality and non-disparagement provisions of Quicken Loan’s employment agreements (see our earlier blog post here) violated the Act.

Confidentiality agreements, for example, can be drafted to lawfully prohibit the disclosure of a wide variety of confidential information, see e.g., GC MEMORANDUM OM 12-31, Case 7 (pp. 17-18) (a rule by a drugstore chain prohibiting the disclosure of confidential information lawful where the rule was clearly in the context of not disclosing personal health information); see also GC MEMORANDUM OM 12-59, p. 20 [Walmart, Case 11-CA-067171] (finding lawful a rule requiring employees to maintain the confidentiality of the employer’s trade secret and confidential information where rule was sufficiently contextualized by examples of prohibited disclosures (i.e., information regarding the development of systems, processes, products, know-how and technology, internal reports, policies, procedures or other internal business-related communications) for employees to understand that it does not reach protected communications about working conditions).

It seems reasonably clear, however, that too often the implications of the NLRA for industries and sectors that have not traditionally had to deal with issues arising under the Act are not considered. Further, even where they are at least considered, frequently all that is done is to include a so-called “savings clause,” stating in effect that nothing contained in an employment agreement, handbook, or work rule, shall be construed as restricting activity protected by the National Labor Relations Act. The Board, however, routinely finds such clauses ineffective. Chipotle Services LLC d/b/a Chipotle Mexican Grill, 364 NLRB No. 72 (2016); see also ISS Facility Services, Inc., 363 NLRB No. 160 (2016).

As noted, the National Labor Relations Act applies to most private sector employers, including industries and business sectors that have not traditionally had to deal with issues arising under its provisions. However, because it provides for only compensatory damages and generally does not offer the opportunity for attorney’s fees, it has generally been ignored by the Plaintiff’s Bar. But in today’s digital age, where employees can readily become aware of the Act’s scope via social media and online content providers, the Act’s implications need to be considered by almost all private sector employers when drafting employment agreements, handbooks, and work rules –  areas into which the Board clearly is looking to expand its effective reach.

 

By Erin Dougherty Foley and Craig B. Simonsen

Compliance Concept on İnterface Touch ScreenSeyfarth Synopsis: A couple of Circuit Court decisions last week may cause some trepidation for your company’s HR managers as they shuffle through the off-duty activities of company employees that get brought onto the company’s property and into its business. This blog offers some comments on the decisions, and recommendations for employers.

Last week, we had decisions from two federal circuit courts that may be concerning to employers. In Robert Swindol v. Aurora Flight Sciences Corp., No. 14-60779 (5th Cir. Aug. 8, 2016), the employer had what it thought was a legal company policy that banned firearms from company property, including the employee parking lot. The employee had a firearm in his automobile, which was discovered by the employer, who then terminated the employee for violation of the no firearms policy.

In Swindol, the plaintiff argued that the employer wrongfully terminated him for keeping a firearm locked inside his car in violation of company policy. He alleged his action was protected by Mississippi Code Chapter 9, Section 45-9-55 (which states that an employer is not permitted to prohibit transportation or storage of firearms on employer property). The employer responded that the plaintiff could not assert wrongful discharge because Section 45-9-55 did not create an exception to the employment-at-will doctrine; however, the Mississippi Supreme Court weighed in on that argument in an earlier, related decision, Robert Swindol v. Aurora Flight Sciences Corp., No. 2015–FC–01317–SCT, 2016 WL 1165448, at *6 (March 24, 2016), and held that the State statute could make an employer liable for wrongful discharge.  Thus, the Fifth Circuit concluded that the plaintiff had stated a claim for wrongful discharge under Mississippi law where he alleged he was terminated when the employer enforced a legally impermissible firearms policy against him.

In Ronald Godwin v. Rogue Valley Youth Corr. Fac., et al., No. 14-35042 (9th Cir. Aug 10, 2016), that employer terminated the employment of that plaintiff for wearing a motorcycle club insignia and expressing that association. The district court held that the plaintiff “was not wrongfully terminated in violation of his First Amendment rights to association and free speech.”  On appeal the plaintiff challenged that ruling arguing that his association with the motor cycle club would be protected under the First Amendment, which in this context “required that his expression/association relate to a matter of public concern.”

On appeal, the Ninth Circuit Court of Appeals found that “public concern is something that is a subject of legitimate news interest; that is, a subject of general interest and of value and concern to the public at the time of publication.” Citing City of San Diego v. Roe, 543 U.S. 77, 83-84 (2004) (per curiam). As such, the Court stated, “[a]n employer may not interfere with an employee’s First Amendment rights unless there is evidence that the employee’s actions have actually disrupted the workplace or are reasonably likely to do so in the future.” Citing Nichols v. Dancer, 657 F.3d 929, 931 (9th Cir. 2011).

The Court reversed and held that nothing in the record before the Court indicated that the plaintiff’s expression “impeded the performance of his job duties, adversely affected discipline or personnel relationships, or interfered with the work of the [employer]. Nor does the record indicate that his expression would be reasonably likely to disrupt the workings of the [employer] in the future.”

While these cases are both pretty unique from a factual perspective, they do suggest that it’s a good idea to dust off your employee policies and determine whether they are current, in conflict with any specific state laws in which your company does business, or whether it’s an opportune time to give those policies a tune-up. Additionally, before disciplining or terminating an employee, remember that the courts, the U.S. Department of Labor, and the National Labor Relations Board have consistently and regularly been updating and revising what they consider to be “clearly legal.”  So, stay tuned for further updates on other “things that make you go…. huh???”

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Workplace Policies and Handbooks Team.

By Howard Wexler, Esq. and Samuel Sverdlov, Esq.

Seyfarth Synopsis: An Administrative Law Judge held that an employer’s policy of prohibiting employees from conducting personal business at work, along with its social media and solicitation/distribution policies, violated the National Labor Relations Act (“NLRA”).

In Casino Pauma, the NLRB’s General Counsel (“GC”) alleged that four of the employer’s handbook policies violated Section 8(a)(1) of the NLRA.  Specifically, the NLRB took issue with the wording of the following policies: (1) Conducting Personal Business; (2) Solicitation and Distribution; (3) Social Media; and (4) Conflicts of Interest (which relates to solicitation and distribution).

With regard to the policy prohibiting employees from conducting personal business, the GC alleged that such a policy was unlawful because it “bans employees from all of [the employer’s] property except when conducting [the employer’s] business.” The GC contended that “the rule unlawfully restricts off-duty employees from engaging in protected activity; and it prohibits protected activity during nonworking time.”

The solicitation policy was alleged to be unlawful because “it prohibits protected solicitation and distribution ‘if the intended recipient expresses any discomfort or unreceptiveness whatsoever.’”

The GC alleged that the social media policy was unlawful “because it prohibits employees from (1) ‘communicating anything to do with work’ on social media without an employer-approved disclaimer; (2) posting social media references to co-workers without their prior approval; and (3) posting photos ‘in conjunction with work-related postings’ without [the employer’s] prior approval.”

Finally, the GC contended that the conflicts of interest policy unlawfully required the employer’s advance notice before employees could solicit co-workers.

An NLRB Administrative Law Judge (“ALJ”) agreed with the GC that the wording of these policies violated the NLRA.  The ALJ held that the “prohibition against conducting ‘personal business’ on company property and ‘while at work’ can reasonably be read to restrict the communications of employees with each other about union or other Section 7 protected rights in non-work areas and on nonwork time.”  In particular, the ALJ found that the language “while at work” was overly broad.  Moreover, the ALJ found that the term “personal business” was ambiguous enough to include union activity.

With respect to the solicitation, social media, and conflict of interest policies, the ALJ noted that employees are permitted to “engage in persistent union solicitation even when it annoys or disturbs the employees who are being solicited.” The ALJ also found that the employees should not be required to get the employer’s pre-approval in writing.

The ALJ also admonished the employer, by stating that the policies: “restrict the free exercise of [employee’s] Section 7 right to comment to fellow employees and others, including union representatives, about their work-related complaints concerning wages, hours and working conditions.”  With regard to the restriction on posting pictures, the ALJ held that, “[o]ne can easily imagine an employee who observes unsafe conditions in the workplace taking a photo for use by a union, to obtain the support of fellow employees in an effort to resolve the unsafe working conditions, or even to report them to the appropriate government agencies.”

Outlook

When an employee handbook has ambiguous or overbroad language, or has language that could conceivably be interpreted to restrict employees from engaging in broadly defined protected activities, the NLRB will not hesitate to allege a violation of the NLRA. The wording of each policy in an employee handbook must be carefully crafted so as to not restrict employees from communicating about union activity, or wages, hours and other working conditions during employees non-working time.  As such, it is imperative that employers have their handbooks constantly updated, and reviewed by attorneys familiar with the NLRA.