In collective bargaining, a “final” proposal is often a term of art, used to signal the end of a party’s willingness to move. However, negotiators frequently will continue to move even after a purportedly final offer. In the view of the National Labor Relations Board ("NLRB"), “final” does not always really mean final. Recently, the Fifth Circuit Court of Appeals agreed with the NLRB's view. In Carey Salt Co. v. NLRB, the Fifth Circuit Court of Appeals affirmed the NLRB's holding that labor negotiations had not reached impasse, even though the union had asked for the company’s “final” proposal, the company had provided it, the union had rejected it, and the parties had thereafter confirmed that they were far apart. These facts, on their face, would seem to suggest that the parties had reached impasse, and that the company was therefore entitled at that point to suspend negotiations and implement its final offer. However, the NLRB looked behind these facts, and concluded that the union, when it requested the company’s final offer, had not intended to bring negotiations to a halt. The NLRB credited the union’s testimony that the union had wished only to poll its membership on the company’s position and continue bargaining. The union’s negotiator testified – without significant rebuttal – that his request for a “final” offer had included the caveat that the parties negotiate further after receiving it. Under these circumstances, the NLRB held, and the Fifth Circuit affirmed, that the company had prematurely seized on the final offer phraseology to declare impasse and to decline to meaningfully negotiate thereafter. This strategy had disastrous consequences for the company, not the least of which was that it was ultimately responsible for wages lost during an ensuing strike, which – as a result of the company’s premature cessation of negotiations and implementation of its final offer – was held to constitute an “unfair labor practice strike.” Although the Fifth Circuit does not have jurisdiction over employers in New York, the Court's decision illustrates the treacherous waters that employers in any state must navigate when assessing whether impasse – always an evasive concept – has truly been reached. The Fifth Circuit's decision includes a particularly scholarly recitation on the subject of impasse in collective bargaining, recounting and discussing precedent on this difficult issue. A second issue addressed in the case is whether, and under what circumstances, purportedly “regressive” proposals – i.e., company proposals that reduce previous terms or concessions – can be a factor in assessing “bad faith” bargaining on the part of the company. The NLRB held that the company had bargained in bad faith by introducing so-called regressive proposals. However, the Fifth Circuit rejected the NLRB's position, clarifying that regressive proposals are lawful as long as they are not designed or intended to avoid or frustrate bargaining. The Fifth Circuit found no evidence that the regressive proposals had been deployed in a bad faith manner in this instance. Therefore, the Court rejected the NLRB’s sweeping conclusion of bad faith based on these proposals alone.
In D.R. Horton, Inc., the National Labor Relations Board ("NLRB") held that a mandatory arbitration agreement between an employer and an employee that included a class action waiver was unlawful under Section 8(a)(1) of the National Labor Relations Act ("NLRA") because it prohibited the employee from engaging in concerted activity with other employees. The NLRB's D.R. Horton ruling, which was the subject of a prior blog post, dealt a significant blow to employers who sought to manage their litigation risk by requiring employees to sign mandatory arbitration agreements and class action waivers as a condition of employment. The Second Circuit Court of Appeals, in a separate case decided on August 9, 2013, expressly declined to follow the NLRB's D.R. Horton ruling and held that a class action waiver in an arbitration agreement was enforceable under the Fair Labor Standards Act ("FLSA"). Recently, the Fifth Circuit Court of Appeals rejected the NLRB's D.R. Horton ruling, holding that class action waivers contained in mandatory arbitration agreements do not violate the NLRA and are enforceable under the Federal Arbitration Act ("FAA"). The Fifth Circuit began its analysis by noting that the FAA requires arbitration agreements to be enforced according to their terms, with two exceptions: (1) an arbitration agreement may be invalidated "upon such grounds as exist at law or in equity for the revocation of any contract" (commonly referred to as the FAA's "saving clause"); and (2) application of the FAA may be precluded by another statute's contrary congressional command. The Court concluded that neither of these exceptions applied to preclude the enforceability of the class action waiver contained in the mandatory arbitration agreement. The Court stated that the saving clause "is not a basis for invalidating the waiver of class procedures in the arbitration agreement." The Court then examined whether the NLRA contained a congressional command to override the provisions of the FAA, and found that it did not. The Court found that the "NLRA does not explicitly provide for such a collective action, much less the procedures such an action would employ," and concluded that "there is no basis on which to find that the text of the NLRA supports a congressional command to override the FAA." The Court also looked to the legislative history of the NLRA for evidence of a congressional command to override the FAA, and found no such evidence. Finally, the Court determined that no congressional command to override the FAA could be inferred from the underlying purpose of the NLRA. Accordingly, the Court held that the class action waiver in the mandatory arbitration agreement was valid and enforceable under the FAA. The Fifth Circuit recognized that every other Circuit Court of Appeals that considered the issue (including the Second Circuit, as noted above) either suggested or expressly stated that they would not defer to the NLRB's rationale, and held class action waivers in arbitration agreements to be enforceable. The Court stated that it did not want to create a split among the Circuit Courts by enforcing the NLRB's D.R. Horton decision. Although the Court refused to enforce the NLRB's ruling that the class action waiver violated the NLRA, the Court agreed with the NLRB that the mandatory arbitration agreement violated the NLRA to the extent that it would lead an employee to believe that the filing of unfair labor practice charges was prohibited. The employer argued that this was not the intent of the mandatory arbitration agreement, and that employees remained free to file unfair labor practice charges with the NLRB. However, the Court nevertheless enforced the portion of the NLRB's order requiring the employer to clarify the language of the mandatory arbitration agreement to permit the filing of unfair labor practice charges. It remains to be seen whether the NLRB will ask the U.S. Supreme Court to review the Fifth Circuit's decision. In the meantime, employers should consider whether arbitration agreements with employees containing class action waivers might be a useful tool to limit the risk and cost associated with employment-related litigation.
Recently, in Quicken Loans, Inc., the National Labor Relations Board ("NLRB") continued its close scrutiny of employers' confidentiality rules by affirming an administrative law judge's decision invalidating a rule prohibiting non-union employees from disclosing personal information about themselves or their co-workers, such as home phone numbers, cell phone numbers, addresses, and email addresses. Quicken's "Proprietary/Confidential Information" rule that was included in certain employment agreements prohibited employees from disclosing non-public information relating to the company's personnel, including "all personnel lists, rosters, personal information of co-workers, managers, executives and officers; handbooks, personnel files, personnel information such as home phone numbers, cell phone numbers, addresses, and email addresses" to any person, business, or entity. In affirming the administrative law judge's decision, the NLRB held that "there can be no doubt that these restrictions would substantially hinder employees in the exercise of their Section 7 rights." Quicken defended the rule as necessary to protect the time and expense invested in its employees, and to protect the confidential and proprietary information entrusted to the company. The NLRB rejected this defense, and agreed with the administrative law judge that complying with Quicken's rule would prohibit employees from discussing with union representatives or their co-workers their own wages and benefits, or the names, wages, benefits, addresses, or telephone numbers of other employees. The NLRB concluded that "this would substantially curtail their Section 7 protected concerted activities." The NLRB also affirmed the administrative law judge's invalidation of Quicken's Non-Disparagement provision in its entirety. The provision stated that employees would not "publicly criticize, ridicule, disparage or defame the Company or its products, services, policies, directors, officers, shareholders, or employees, with or through any written or oral statement or image . . . ." The NLRB concluded that an employee would reasonably construe this provision as restricting his or her rights to engage in protected concerted activities. In the wake of this decision, and considering the fact that the NLRB is now comprised of a Senate-approved Democratic majority led by Chairman Mark Gaston Pearce, employers should expect continued close scrutiny of confidentiality policies. Employers should carefully review their confidentiality rules to ensure that they do not prohibit employees from discussing wages, benefits, or other terms and conditions of employment either with their co-workers or with union representatives. Employers should also consider including specific examples of prohibited disclosures and a clause specifically providing that the rule is not intended to prohibit an employee's exercise of rights protected by Section 7 of the National Labor Relations Act.
In a recent decision of statewide applicability to public employers with unionized members of the Police and Fire Retirement System (“PFRS”), the New York Court of Appeals (“Court”) addressed the issue of whether the City of Yonkers’ refusal to pay or reimburse new employees for their statutorily-required Tier V pension contributions was arbitrable. In City of Yonkers v. Yonkers Fire Fighters, the Court affirmed the decision of the Appellate Division, Second Department (which had reversed the lower court’s decision), and held that the dispute was not arbitrable, thereby affirming a permanent stay of arbitration. The case will likely have positive implications for similarly-situated public employers across the state. The City of Yonkers ("City") was represented by Bond, Schoeneck & King in the litigation.
The dispute arose in connection with the 2009 enactment of Article 22 of New York’s Retirement and Social Security Law (“Tier V”). Among other changes, Tier V provides that those who join the PFRS on or after January 10, 2010 must contribute 3% of their salary towards the retirement plan in which they are enrolled.
Prior to the enactment of Tier V, the City and the Yonkers Fire Fighters (the “Union”) were parties to a collective bargaining agreement (“CBA”) which expired on June 30, 2009. Like many other firefighter and police collective bargaining agreements throughout the state, the CBA required the City to provide a “non-contributory” pension/retirement plan to its firefighters.
In late 2009, the City hired several firefighters who, because of a “gap” in the law, had the option of joining the PFRS as either members of Tier III or Tier V – both contributory (3%) tiers. In an attempt to apply the terms of the expired CBA to relieve its Tier V members of the statutorily-required 3% member contribution, the Union filed a grievance and sought arbitration based upon the contractual obligation to provide a non-contributory plan.
The Union relied upon an exception (Retirement and Social Security Law, Article 22, Section 8) in the Tier V statute which provides that members of the PFRS need not join the contributory Tier V if there is an alternative (non-contributory) retirement plan available to them under a CBA “that is in effect on the effective date of Tier V.” This provision gives new members of the PFRS a means by which they could avoid Tier V and its 3% contributions and join an existing non-contributory plan. The Union sought to use the “Triborough” provisions of the Taylor Law, which require that the terms of an expired agreement continue until a new agreement is reached, to extend this exception to its members hired in late 2009 on the theory that its CBA, which expired on June 30, 2009, was nonetheless still “in effect.”
Finding that the Union’s reliance on “Triborough” applying to the statutory Section 8 exception was misguided and not the Legislature’s intent, the Court found that the CBA in question expired on June 30, 2009 and, therefore, was not “in effect” on January 10, 2010, the effective date of Tier V. The Court adopted a position taken by the City and determined that the Legislature intended to honor only agreements providing for non-contributory status that had not expired at the time the statute became effective.
The Union also grieved, and attempted to arbitrate, an alternative argument that even if its new members could not join Tier V as non-contributing members, then, under the CBA, the City should pay (or potentially reimburse) its new members’ 3% pension contributions. The Court, however, found that the arbitration sought by the Union was barred as an impermissible negotiation of pension benefits. The Court accepted the City’s argument that Section 201(4) of the Civil Service Law and Section 470 of the Retirement and Social Security Law prohibit the arbitration of this dispute. While New York generally favors arbitration, an issue is not proper for arbitration when the subject matter of the dispute violates statutory law, as was the case here. Among other things, Sections 201(4) and 470 state that the benefits provided by a public retirement plan are prohibited subjects of collective bargaining. In this case, arbitration of the relevant dispute would be improper, as these statutes clearly bar the negotiation of benefits provided by a public retirement system such as the PFRS 3% contribution.
Finally, the Court rejected the Union’s remaining contention that the Section 8 exception runs afoul of the Contract Clause of the United States Constitution, which prohibits the retroactive impairment of contracts after their inception.
This 4-2 decision of the Court could impact any public employer that employs police and/or firefighter members of Tier V, and who has a collective bargaining agreement that addresses non-contributory retirement plans. However, because of the many complex legal issues involved, it is recommended that these matters, as well as those involving questions surrounding the applicability of this decision to Tier V, be reviewed with labor counsel.
Citing “unprotected, indefensible conduct” that “created a reasonably foreseeable danger” to patients, the Second Circuit, in NLRB v. Special Touch Home Care Services, Inc., stung the National Labor Relations Board (“NLRB”) by upholding a home care employer’s refusal to reinstate strikers who “misled the employer” by falsely advising that they intended to report to work.
In 2003, when 1199 SEIU announced a three-day strike -- after giving 10 days advance notice required for health care institutions -- the employer lawfully polled its home health aides as to whether they intended to report to work as usual at the homes of patients they were assigned to assist. While the employees were under no obligation to answer, most of them did respond, and the employer made arrangements to cover those who said they would not report to work, in order to meet the employer’s duty to its patients.
However, 48 home health aides who advised the employer that they intended to report to work nevertheless did not do so. The employer argued that this conduct was “unprotected,” because, by misleading the employer, the aides failed to take “reasonable precautions” to avoid a risk of injury to the homebound (typically frail and elderly) patients whom the aides were assigned to assist. Because the employer had no notice that these 48 employees would not report to work -- and none of them called in to say so -- the employer had to struggle to find coverage belatedly, and could not cover all of the patients, many of whom suffer from conditions like Alzheimer’s, strokes, Parkinson’s disease, and diminished mobility.
Seventy-five strikers who told the employer they would be out, or who called in prior to their shift, were reinstated to their positions when the three-day strike ended. However, the 48 who misrepresented that they would report to work were not immediately reinstated (the employer instead placed them on a list for future openings).
The NLRB held that both groups of strikers were protected, reasoning that the 10-day advance-notice for strikes at health care entities was the only pre-strike notice required. However, the Second Circuit rejected the NLRB’s view, holding that an otherwise lawful striker becomes unprotected if he “cease[s] work without taking reasonable precautions” to shield employers (or here, patients) from “foreseeable imminent danger due to sudden cessation of work.” This conduct was regarded as unprotected under a line of industrial cases where strikers left their workstations in conditions that were potentially perilous to the public or the employer. Here, by misleading the employer as to their intention to report to work, the 48 home health aides left the employer unable to protect seriously ill patients, thereby placing them in “imminent danger,” and rendering their strike activity “unprotected.”
For nearly 35 years, employers in pre-arbitration discovery with a union have not been required to disclose witness statements obtained during internal workplace investigations. However, consistent with its unabashedly pro-union year-end theme of overturning longstanding precedent, the National Labor Relations Board (“NLRB” or "Board") in American Baptist Homes of the West, d/b/a Piedmont Gardens abandoned this bright-line rule in favor of a fact-specific balancing test. The balancing test will be applied to all information requests made after December 15, 2012.
Under Section 8(a)(5) of the National Labor Relations Act (“NLRA”), an employer must furnish a union with relevant information necessary to the union’s performance of its duties, including for grievance or arbitration purposes. Under a rule established in its 1978 Anheuser-Busch decision, the Board had consistently applied a blanket exemption from disclosure for witness statements obtained during internal investigations of employee misconduct, reasoning that such an exemption was necessary to avoid coercion and intimidation and to encourage cooperation in internal investigations.
Finding its logic “flawed,” the Board in Piedmont Gardens explicitly rejected the Anheuser-Busch rule. In its place, the Board held that the production of witness statements should be subject to the same standard as other union information requests and that any attempts to withhold disclosure should be analyzed using the test developed by the U.S. Supreme Court in Detroit Edison Co. v. NLRB. Under this test, where requested witness statements may contain relevant information, an employer may refuse to produce them only if it can show that a legitimate and substantial confidentiality interest outweighs the union’s need for the information. Additionally, in order to assert a valid confidentiality defense, an employer must raise its concerns to the union in a “timely manner” and offer an accommodation regarding the information requested before refusing to disclose the statement.
Essentially, a longstanding bright-line rule has been replaced with a test that will force employers to make a case-by-case prediction of how the Board will apply a subjective balancing of interests. This unclear standard is almost certain to extend the grievance process as parties engage in lengthy proceedings to resolve confidentiality claims. Lone dissenting member Brian Hayes expressed these very concerns, and he also noted that the production of witness statements is inconsistent with existing guidance from the Equal Employment Opportunity Commission regarding confidentiality in connection with an investigation of an employee’s harassment complaint.
When this decision is combined with the NLRB’s Banner Health decision (previously reported here), which found that an employer’s rule requiring confidentiality during an internal investigation was an unfair labor practice, the effect is a major shift in the law that impedes an employer’s ability to conduct effective and meaningful internal investigations. In light of these decisions, employers should reassess their current investigatory practices, including whether to continue to produce witness statements, and if so, how best to protect employees from legitimate confidentiality concerns regarding the disclosure of those statements.
The National Labor Relations Board (“NLRB”) continues to issue rule-changing decisions that create troubling results for employers. We recently reported, for example, on the NLRB’s reversal of decades-old precedent when it ruled that a dues checkoff provision survives the expiration of a collective bargaining agreement. Two days after issuing that decision, the NLRB issued a decision in Alan Ritchey, Inc., holding that an employer must bargain with a union under certain circumstances prior to imposing discretionary discipline on an employee who is represented by a union.
This new rule will apply only in the absence of a binding agreement between the employer and the union to address discipline, such as a grievance-arbitration procedure. Therefore, as the NLRB explained, this obligation to bargain over employee discipline will typically arise only after a union is newly certified, but before the parties have agreed to a first contract.
In Alan Ritchey, Inc., after the union was certified and while negotiations were being conducted for a first contract, the employer continued to rely on its pre-existing five-step progressive disciplinary system set forth in its employee handbook to discipline several employees for absenteeism, insubordination, threatening behavior, and failure to meet efficiency standards. Pursuant to the handbook, the employer reserved the right to exercise discretion in the enforcement of policies, and the employer admittedly exercised this discretion in setting the levels of discipline with regard to the employees in this case. For example, when imposing discipline for failing to meet performance standards, three employees were treated leniently because of extenuating circumstances -- one employee’s husband died, another worked in a low volume area, and another was unable to work consecutive days in the same position.
The Union filed unfair labor practice charges to challenge these disciplinary actions, taking the position that it should have first been notified and given an opportunity to bargain. The NLRB agreed. It held that even though the employer’s existing discipline system represents the status quo that can and must be continued during bargaining for a first contract, the employer was not privileged to exercise any discretion with regard to that discipline system without negotiating with the union. Rather, the employer was required to provide the union with notice and an opportunity to bargain each time it seeks to exercise any discretion with regard to employee discipline. Recognizing that it had never articulated this requirement before, the NLRB opted to apply the rule only prospectively.
The NLRB set forth a few limiting principles in laying out this rule:
First, the employer will only be required to provide the union with notice and an opportunity to bargain prior to implementing the discipline where it seeks to impose a suspension, demotion, or discharge. For lesser forms of discipline, such as warnings and counselings, there is still a bargaining obligation, but the employer can delay providing the notice and opportunity to bargain until after the implementation of the discipline.
Second, where there is an obligation to provide pre-implementation notice and opportunity to bargain, the employer need not bargain to agreement or impasse at this stage. The employer need only provide sufficient notice, and provide responses to union information requests, if any. If the parties cannot reach an agreement, the discipline can be imposed, and the bargaining obligation continues after imposition (albeit with the possibility that the discipline may have to be rescinded or altered).
Third, no prior notice is required where “exigent circumstances” exist. The NLRB defines this as a reasonable, good faith belief that “the employee’s continued presence on the job presents a serious, imminent danger to the employer’s business or personnel.” This includes situations where the employer believes the employee is engaging in unlawful conduct, is posing a significant risk of imposing legal liability on the employer, or threatens safety, health, or security inside or outside the workplace.
In its decision, the NLRB expressed its view that this new bargaining obligation will not “unduly burden” employers. It is difficult to agree with this assessment. This new obligation presents a significant impediment to an employer's ability to manage its workforce while bargaining for an initial contract. Although the employer need not complete bargaining regarding the discipline before imposing the proposed discipline, the obligation to provide meaningful notice and to respond to union information requests prior to imposing the proposed discipline will certainly create significant delays in the disciplinary process.
The National Labor Relations Board ("NLRB") recently re-examined the issue of whether an employer's obligation to check off union dues from employees' wages terminates upon the expiration of a collective bargaining agreement that contains a dues checkoff provision. This issue was seemingly resolved more than 50 years ago, in the NLRB's Bethlehem Steel decision. However, on December 12, 2012, in its WKYC-TV, Inc. decision, the NLRB reversed its 50 year-old precedent and held that an employer's obligation to check off union dues continues after the expiration of a collective bargaining agreement that establishes such an arrangement.
In its 1962 Bethlehem Steel decision, the NLRB considered the issue of whether the employer had violated its obligation to negotiate in good faith by unilaterally refusing to honor the union security clause and the union dues checkoff provisions contained in an expired collective bargaining agreement. Although the NLRB found that both union security and dues checkoff provisions are mandatory subjects of bargaining, the NLRB held in Bethlehem Steel that the employer did not violate the National Labor Relations Act ("NLRA") by unilaterally refusing to honor the union security clause and discontinuing union dues deductions from employees' pay checks. The NLRB determined that the language of Section 8(a)(3) of the NLRA, which permits employers and unions to make an "agreement" to require union membership as a condition of employment, means that parties cannot enforce a union security provision after the collective bargaining agreement containing such a provision has expired. The NLRB further reasoned that dues checkoff provisions are intended to implement union security clauses, and that an employer's obligation to continue deducting union dues from employees' pay checks ceases upon the expiration of the collective bargaining agreement.
According to the three NLRB members who comprised the majority in the WKYC-TV decision, the reasoning contained in the Bethlehem Steel decision is flawed. The three-member majority disagreed with the premise that dues checkoff provisions are intended to implement union security clauses, and stated that "union-security and dues-checkoff arrangements can, and often do, exist independently of one another." The three-member majority also found that employees cannot be required to authorize union dues deductions as a condition of employment even if the collective bargaining agreement contains a union security clause that requires them to be a member of the union. Although employees generally choose to sign authorizations allowing the dues deductions as a matter of convenience, employees retain the option of transmitting their union dues directly to the union instead of consenting to automatic deductions. The three-member majority observed that employees who sign dues checkoff authorizations are free to revoke those authorizations upon the expiration of the collective bargaining agreement if they no longer wish to continue those automatic deductions.
For these reasons, the three-member majority reversed the Bethlehem Steel decision and held that employers are required to honor dues checkoff provisions in an expired collective bargaining agreement until the parties have reached a new agreement or until a valid impasse has been reached that permits unilateral action by the employer. This new rule will only be applied prospectively, and will not be applied to any pending cases.
Not surprisingly, Member Hayes wrote a strong dissenting opinion. Member Hayes found no adequate justification for the NLRB to abandon more than 50 years of precedent. Member Hayes stated that a union security clause operates as a powerful inducement for employees to authorize union dues deductions, and "it is unreasonable to think that employees generally would wish to continue having dues deducted from their pay once their employment no longer depends on it." Member Hayes also responded to the majority's view that employees can simply revoke their authorizations, stating that "it is unlikely that employees will recall the revocation language in their authorizations, and less likely still that they will understand that their obligation to pay dues as a condition of employment terminated as a matter of law once the contract expired." Member Hayes also recognized that an employer's ability to cease collecting union dues from employees upon the expiration of a collective bargaining agreement is "a legitimate economic weapon in bargaining for a successor agreement" and accused the three-member majority of deliberately stripping employers of this weapon to provide more leverage to unions in negotiating for successor agreements.
It is not clear at this point whether the NLRB's WKYC-TV decision will be appealed.
Earlier this year, many employers were left scratching their heads after a National Labor Relations Board Administrative Law Judge ruled, in American Red Cross Arizona Blood Services Region, that an employer’s handbook acknowledgment, requiring employees to affirm the at-will nature of their employment, violated the National Labor Relations Act. The language that was found to be unlawful in Red Cross stated:
I further agree that the at-will employment relationship cannot be amended, modified or altered in any way.
The ALJ reasoned that this language required employees to waive their Section 7 rights to engage in protected concerted activity, because by agreeing that their at-will status could never change, they were essentially foregoing their right to make efforts or engage in conduct that could result in union representation and in a collective bargaining agreement. This waiver, according to the ALJ, would have a chilling effect on employees’ rights, and was therefore unlawful.
The confusion and concern among employers continued, as the Board continued to file and process complaints against employers for employment-at-will policies that appeared to contain the most routine at-will language. For example, in late February, another Board complaint challenged the following language:
I acknowledge that no oral or written statements or representations regarding my employment can alter my at-will employment status, except for a written statement signed by me and either [the Company’s] Executive Vice-President/Chief Operating Officer or [the Company’s] President.
The complaint challenging this language was settled before the Board issued a decision, providing employers no guidance as to whether it was time to revise their handbooks. Thankfully, the Board has now provided some further guidance, and it appears they have tempered their position. This “treat,” issued on Halloween, came in the form of two Advice Memoranda (Case 32-CA-086799 and Case 28-CA-084365) issued by the Board’s Division of Advice taking the position that language similar to that above is lawful. For example, the following language was found acceptable:
No manager, supervisor, or employee of [the Company] has any authority to enter into an agreement for employment for any specified period of time or to make an agreement for employment other than at-will. Only the president of the Company has the authority to make any such agreement and then only in writing.
The memorandum explains that this language is lawful because it is not as absolute as the language in the Red Cross case. It explicitly permits the president to enter into written employment agreements, thus providing for the possibility of potential modification of the at-will relationship through a collective bargaining agreement. Additionally, the language is not written in a way that requires employees to waive their rights.
For now, employers should consider reviewing the at-will language in their employee handbooks. Language that simply describes the at-will status of employees, and states that it can only be altered in writing by an executive should not cause concern for now. However, if the at-will language is written in more absolute terms, providing that the at-will relationship can never be changed under any circumstances, it may be time to revise that policy. However, as warned by the Board’s General Counsel at the close of both Advice Memoranda, “the law in this area remains unsettled.” We will continue to provide updates on this blog as this issue develops.
On October 23, 2012, the National Labor Relations Board held, in a 2-1 decision, that an employer has an obligation under the National Labor Relations Act to respond in a timely manner to a union information request, even if the requested information is ultimately found to be irrelevant to the union's performance of its duties as the employees' collective bargaining representative.
In IronTiger Logistics, Inc., the employer was a unionized trucking company that shared common ownership with another non-union trucking company called TruckMovers.com, Inc. The union representing IronTiger's employees made a written request to IronTiger that principally sought information regarding the non-union truck drivers employed by TruckMovers. The information request also sought some information relating to bargaining unit employees, such as the names of the truck drivers for each unit, their destination and mileage, and communications from customers about those units.
IronTiger did not respond to the union's information request until approximately four and a half months later -- after the union had filed an unfair labor practice charge over IronTiger's failure to provide a response to the information request. In its response, IronTiger did not provide any of the requested information, but instead stated its belief that all of the requested information was irrelevant.
The Administrative Law Judge who presided over the unfair labor practice hearing agreed with IronTiger that the information requested by the union was irrelevant to the union's performance of its duties as the employees' collective bargaining representative. In addition, there was no dispute regarding the adequacy of IronTiger's response explaining why the requested information was irrelevant. However, the ALJ nevertheless held that IronTiger's failure to respond in some manner to the irrelevant information request for approximately four and a half months constituted a refusal to bargain in good faith in violation of Section 8(a)(5) of the Act.
The two-member majority of the Board agreed with the ALJ's analysis, and held that employers have an obligation under the Act to respond within a reasonable time to union information requests, regardless of whether those requests are deemed to be irrelevant. Member Hayes wrote a dissenting opinion, in which he reasoned: "Ultimately, requested information is either legally relevant to a union's representative duties, or it is not. If it is not relevant, then the statutory duty to bargain in good faith is not implicated by the request or the employer's failure to respond timely to the request."
Based on the Board's IronTiger decision, employers should make sure to respond within a reasonable time in some manner to all information requests made by a union representing their employees, even if the response is just a brief explanation of the employer's position that the requested information is irrelevant. If an employer believes that a union information request is overly broad or unduly burdensome, the employer should make a good faith effort to work with the union to narrow the scope of the request.
On September 28, 2012, the National Labor Relations Board handed down its first decision regarding whether an employee’s termination in connection with his postings on Facebook was unlawful. In its decision, however, the Board dodged the more thorny aspect of the case, which was whether other Facebook postings of the employee that were openly critical of the employer were protected under the Act.
The Board concluded that the employee, a salesman at a BMW dealership, was terminated for posting pictures on Facebook of an unfortunate incident at an adjoining Land Rover dealership, which was also owned by the same employer. The incident depicted in the employee’s photos was of a Land Rover that had been driven into a pond by a customer’s teenage son and included the caption: “This is your car. This is your car on drugs.” He also wrote on his Facebook page:
This is what happens when a sales Person sitting in the front passenger seat (Former Sales Person, actually) allows a 13 year old boy to get behind the wheel of a 6000 lb. truck built and designed to pretty much drive over anything. The kid drives over his father’s foot and into the pond in all about 4 seconds and destroys a $50,000 truck. OOOPS!
The Board, affirming the ALJ, concluded that there was nothing protected or concerted about these posts by the employee because they did not concern any terms or conditions of employment and they were posted solely by the employee, apparently as a “lark.”
The Board did not consider whether more controversial postings by the employee on his Facebook page were protected, concerted activity under the Act. Those postings were critical of the employer’s “Ultimate Driving Event” at the BMW dealership. Specifically, the employee criticized the low budget food and drink offerings provided to customers -- the 8 oz. bag of chips, the $2.00 cookie plate from Sam’s Club and the hot dog cart where a customer “could attain a over cooked wiener and a stale bunn [sic],” among other criticisms. Because the Board agreed with the ALJ that the employee had been fired exclusively for the Land Rover postings, which were clearly unprotected, the Board found it unnecessary to determine whether the employee’s other postings were protected.
However, two members of the Board (with Member Hayes dissenting) concluded that the following policy of the employer was unlawful:
Courtesy: Courtesy is the responsibility of every employee. Everyone is expected to be courteous, polite and friendly to our customers, vendors and suppliers, 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.
Specifically, the Board found the broad prohibitions of the rule on “disrespectful” conduct and use of “language which injures the image or reputation of the Dealership” implicated protected Section 7 activities, including complaining about working conditions and seeking the support of others in improving them. The Board noted that there was nothing else in the rule -- or the employee handbook generally -- to suggest that conduct protected by Section 7 of the Act is excluded from the Courtesy rule. The two-member majority rejected the argument advanced by dissenting member Hayes that the words contained in the rule must not be read “in isolation,” and that the first two sentences inform employees that the rule is intended simply to promote civility in the workplace.
On September 7, the National Labor Relations Board (“Board”) issued its first decision on the lawfulness of an employer’s social media policy under the National Labor Relations Act (“NLRA”). We have previously reported on three non-binding reports issued by the Board’s Acting General Counsel (“GC”) since August 2011, outlining his views of impermissibly restrictive social media rules. In Costco Wholesale Corp., the Board has indicated that it may take an approach similar to the GC in scrutinizing employer efforts to control employees’ online speech.
The Costco policy prohibited employees from electronically posting communications that “damage the Company, defame any individual or damage any person’s reputation, or violate the policies outlined in the Costco Employee Agreement.” Reversing the administrative law judge’s ruling, a three-member Board panel held that this rule was overly broad in violation of Section 8(a)(1) of the NLRA. In reaching this conclusion, the Board found that the wording of the policy “clearly encompasse[d] concerted communications” protesting Costco’s treatment of its employees. The Board further found that in the absence of any accompanying language that “even arguably suggests that protected communications are excluded from the broad parameters of the rule,” employees would reasonably assume the policy prohibited them from engaging in communications critical of Costco or its agents. Costco was ordered to rescind the policy insofar as it prohibited employees from making on-line statements damaging to the company’s or any person’s reputation.
Costco’s policy also provided that “sensitive information such as . . . payroll . . . information may not be shared, transmitted or stored for personal or public use without prior management approval.” The provision was deemed unlawful, because the Board determined that employees would reasonably conclude that it prohibited them from discussing their wages and other terms and conditions of employment. Costco’s argument that the rule should be read to prohibit only the sharing of the “confidential business component of payroll, such as budgeted payroll and expenses and the like” was rejected. Although the rule also prohibited disclosure of items unrelated to terms and conditions of employment, such as social security and credit card numbers, when read in the context of the entire document, the Board believed that term “payroll information” would reasonably be construed by employees to prohibit protected activity under Section 7 of the NLRA, such as discussing their compensation.
However, that portion of the Costco policy that required employees to use “appropriate business decorum” in communications with others was found to be lawful. The administrative law judge (affirmed by the Board) agreed that an employer may lawfully establish rules providing for a civil workplace. The GC’s contention, that the rule could be interpreted by employees as restricting Section 7 activities, was rejected. Rather, the Board held that the applicable legal standard is whether the rule in question would be construed by employees to restrict Section 7 activity.
Additional cases involving social media issues are likely to be decided by the Board over the next several months. Until further decisions and guidance are issued, employers should consult with legal counsel in crafting their policies. Employers would also be well-advised to avoid broad, vague restrictions (e.g., “non-disparagement”) and restrictions that plainly impinge on protected speech (e.g, “no discussion of wages”). Employers should also include specific examples of prohibited conduct and a “savings clause” or other disclaimer language making clear that the policy is not intended to restrict Section 7 rights.
