On July 30, 2012, the National Labor Relations Board (“Board”), in a 2 to 1 decision, held that a hospital violated Section 8(a)(1) of the National Labor Relations Act ("NLRA") by asking employees who make a complaint not to discuss the matter with co-workers while the investigation is pending.  Section 8(a)(1) of the NLRA forbids employers from interfering with the exercise of an employee's Section 7 rights, such as the right to organize, form, join, or assist a labor union, to bargain collectively, or to engage in other concerted activities for mutual aid or protection.

In Banner Health System, the hospital’s human resources consultant routinely asked employees who made a complaint not to discuss the matter with co-workers while the investigation was ongoing.  It is common for employers to make this type of request to ensure confidentiality and to protect the integrity of their investigation.  What is troubling about this case is that the Board found that an employer’s legitimate interest in protecting the integrity of its investigation is generally insufficient to outweigh an employee’s Section 7 right to discuss workplace concerns with co-workers.  The Board held that before an employer prohibits an employee from discussing an ongoing investigation, the employer must make an individualized assessment and be able to demonstrate that it has a legitimate business reason that outweighs the particular employee’s Section 7 rights.  In undertaking this analysis, the employer must consider whether:  (1) there are witnesses in need of protection; (2) evidence is in danger of being destroyed; (3) testimony is in danger of being fabricated; or (4) there is a need to prevent a cover-up.  An employer’s blanket rule prohibiting employees from discussing ongoing investigations without considering these factors would not meet this requirement.

In light of this recent decision by the Board, employers should be cautious about their communications to employees during the course of a workplace investigation.  In particular, it would be prudent for employers to make an individualized assessment in each case before deciding whether to ask an employee not discuss a matter with co-workers.  In undertaking this analysis, it would be wise to consider the four factors identified by the Board.  If, after considering these factors or any other compelling factors, an employer ultimately decides to ask an employee not to discuss matters under investigation, the employer should document its rationale for making the decision in the event that the decision is later challenged.  In addition, rather than “prohibiting” or “requiring” an employee to maintain confidentiality, it may be wise to express that it is the employer’s “preference” that an employee not discuss the matter with co-workers while the investigation is pending.

On June 8, 2012, the U.S. Court of Appeals for the D.C. Circuit refused to enforce a decision and order of the National Labor Relations Board ("Board") on the ground that the Board had "departed, without giving a reasoned justification, from its precedent . . . ."  Prior to the Board's 2010 decision and order in E.I. Du Pont de Nemours v. NLRB, Board law had, for almost a decade, allowed an employer to make certain unilateral changes in terms and conditions of employment, both during the term of a collective bargaining agreement and after expiration of a collective bargaining agreement, provided that the changes are consistent with an established past practice.  However, in its 2010 Du Pont decision, the Board held that Du Pont's unilateral changes to its health plan constituted unfair labor practices in violation of the National Labor Relations Act ("Act"), despite the undisputed existence of a past practice permitting such changes.  The D.C. Circuit Court of Appeals rejected the Board's change of direction on this subject.

In the Du Pont case, the Board acknowledged that Du Pont had annually and consistently revised the terms of its health plan -- which applied both to union and non-union employees -- each year during an annual enrollment period, under the terms of the plan.  These changes typically included revised coverage terms, changed options, and increased premiums.  The management rights clause in the collective bargaining agreement with the union also encapsulated the employer's right to make these changes.

When Du Pont continued this annual practice of revising its health plan in 2004 following expiration of the collective bargaining agreement, the union filed an unfair labor practice charge, and the Board found that Du Pont had violated Sections 8(a)(5) and 8(a)(1) of the Act by making impermissible unilateral changes in the terms and conditions of employment.  The Board distinguished the employer's past practice of similar annual revisions to the health plan, noting that those prior occasions had occurred during the term of the collective bargaining agreement, not after the expiration of the collective bargaining agreement.  The Board also held that Du Pont could not rely on the expired management rights clause to justify the post-expiration unilateral changes.

In rejecting the Board's holding, the D.C. Circuit Court of Appeals observed that, under the Board's existing precedent, the undisputed existence of a past practice permitting similar changes served to immunize those changes from scrutiny under the Act, regardless of whether the changes were made during the term of a collective bargaining agreement or after the expiration of a collective bargaining agreement.  The Court also noted that this immunity did not turn on the existence of a management rights clause in an unexpired collective bargaining agreement.  The Court stated:

Under the Board's precedent, therefore, Du Pont's making annual changes to [its health plan] became a term and condition of employment the Company could lawfully continue during the annual enrollment period, irrespective of whether negotiations for successor contracts were then on-going.

The Court's refusal to enforce the Board's Du Pont decision signals some judicial impatience with the Board's deviation from existing precedent without providing a well-reasoned justification for the sudden change in policy.

On May 30, the NLRB's Acting General Counsel ("GC") issued a third report on social media cases.  We have addressed the NLRB's treatment of social media cases in several prior blog posts, including a summary of the GC's second report on social media cases.  The focus of this third report is social media policies, and for the first time, the GC has provided the full text of a social media policy that was determined to be lawful under the National Labor Relations Act ("NLRA").  In addition, the report addresses six other cases in which the GC concluded that at least some of the provisions of employers' social media policies were overly broad and unlawful under the NLRA.  The following summary touches on just a few of the highlights contained in the GC's 24-page report.

A number of the provisions of social media policies that were found to be unlawful were restrictions on communicating confidential information.  Where a social media policy simply prohibits the disclosure of confidential information, the GC has determined that such a prohibition is overly broad because it could reasonably be interpreted to prohibit employees from discussing and disclosing information regarding their own and their co-workers' conditions of employment.  For example, the GC indicated in the report that the following provisions were found to be unlawful:

• "Don't release confidential guest, team member or company information. . . ."
• "Make sure someone needs to know.  You should never share confidential information with another team member unless they have the need to know the information to do their job.  If you need to share confidential information with someone outside the company, confirm there is proper authorization to do so.  If you are unsure, talk to your supervisor."
• "Watch what you say.  Don't have conversations regarding confidential information in the Breakroom or in any other open area.  Never discuss confidential information at home or in public areas."
• "Employees are prohibited from posting information regarding [Employer] on any social networking sites . . . that could be deemed material non-public information or any information that is considered confidential or proprietary.  Such information includes, but is not limited to, company performance, contracts, customer wins or losses, customer plans, maintenance, shutdowns, work stoppages, cost increases, customer news or business related travel plans or schedules."

The GC also found unlawful a provision of a social medial policy prohibiting "offensive, demeaning, abusive or inappropriate remarks" in social media communications.  According to the GC, this provision "proscribes a broad spectrum of communications that would include protected criticisms of the Employer's labor policies or treatment of employees."  Similarly, the GC found that provisions of an employer's social media policy that cautioned employees not to "pick fights" and to avoid "topics  that may be considered objectionable or inflammatory" when communicating on social media sites were unlawful.  The GC reasoned that discussions about working conditions or unionism have the potential to become heated or controversial, and that "without further clarification of what is 'objectionable or inflammatory,' employees would reasonably construe this rule to prohibit robust but protected discussions about working conditions or unionism."

The GC also addressed provisions regarding the "friending" of other employees on social media sites.  In general, the GC has found such provisions to be unlawful because they may be interpreted to restrict concerted activity.  For example, the GC concluded that the following provision was overly broad because it could potentially discourage employees from engaging in discussions and communications with their co-workers:

• "Think carefully about 'friending' co-workers . . . on external social media sites.  Communications with co-workers on such sites that would be inappropriate in the workplace are also inappropriate online, and what you say in your personal social media channels could become a concern in the workplace."

Provisions restricting the use of company logos or trademarks in an employee's social media posts were also generally found by the GC to be unlawful.  According to the GC, such provisions are overly broad because an employee could reasonably interpret them to prohibit the use of photos or videos of employees engaging in union activities such as holding picket signs with the employer's logo or trademark.

In the report, the GC also addressed again an employer's use of a "savings clause" in a social media policy (which essentially provides that the policy should not be interpreted or applied in a way that would interfere with an employee's rights under the NLRA).  As in previous reports, the GC reiterated that such clauses do not cure other provisions of the policy that are found to be unlawful.

In general, the GC advises employers to include limiting language and definitions in social media policies in order to give context to provisions that might otherwise be overly broad.  For example, instead of simply prohibiting the disclosure of confidential information, an employer should define what is deemed to be confidential information to ensure that an employee could not reasonably interpret the prohibition to apply to information about the employee's terms and conditions or employment.  The GC also suggests that an employer's social media policy should contain specific examples of activities that would be prohibited by the policy.

As a result of this report and the GC's prior reports on social media cases, it is now extremely difficult for employers to create a lawful and meaningful social media policy that adequately protects its own interests with minimal risk that the policy will be found to violate employee rights under the NLRA.  Employers who wish to create a new social media policy or wish to revise their existing policy would be well-advised to consult with their legal counsel.

On May 14, 2012, a federal district court judge invalidated new regulations intended to streamline union representation elections, finding that the National Labor Relations Board lacked a proper three-member quorum when it voted on the controversial final rule in December of 2011.  The final rule, which has commonly been referred to as the "ambush" or ""quickie" election rule, went into effect on April 30, 2012.  The same federal district court judge had previously denied a request for a stay of the final rule, stating that he intended to issue a decision on the merits of the case by May 15.

Judge James Boasberg of the U.S. District Court for the District of Columbia found that the required three members necessary to establish a quorum were not present when the rule was adopted on December 16, 2011 because Member Hayes failed to participate in the final vote.  Hayes had previously voted against initiating the rulemaking process and against proceeding with the final rule.  Because of this prior opposition, the two other members issued the final rule without Member Hayes' participation.

Judge Boasberg rejected the Board's argument that Member Hayes had "effectively indicated his opposition" and that his participation in the final vote was not necessary.  In rejecting this argument, Judge Boasberg cited to an unlikely source:

According to Woody Allen, eighty percent of life is just showing up.  When it comes to a quorum requirement, though, showing up is even more important than that.  Indeed, it is the only thing that matters -- even when the quorum is constituted electronically.  In this case, because no quorum ever existed for the pivotal vote in question, the Court must hold the challenged rule is invalid.

 Judge Boasberg further reasoned that Member Hayes could not be counted toward a quorum particularly because no one on the Board reached out to him to ask for a response, as is the agency's usual practice where a member has failed to vote.  Judge Boasberg stated that if Hayes had affirmatively expressed his intent to abstain or acknowledged receiving notification that the final rule had been circulated, he may have been counted in the quorum; however, because none of those things happened, Judge Boasberg found that Member Hayes failed to "show up -- in any literal or even metaphoric sense."  Because the Board failed to meet the quorum requirement, Judge Boasberg refused to address the plaintiffs' challenge to the final rule on various procedural and substantive grounds.

It remains to be seen whether the newly constituted Board -- complete with three controversial and challenged recess appointees -- will be assembled to take final action on the "quickie" election rule.  In his decision, Judge Boasberg noted that nothing appears to prevent a properly constituted quorum of the Board from voting to adopt the rule if the Board desires to do so.  In addition, an appeal of Judge Boasberg's decision is likely.  If a new vote on the rule is held, it is likely that the rule will once again be challenged.

The Board has announced that, at least for now, all union representation elections based on petitions filed on or after April 30, 2012 will proceed under the old rules.

The U.S. Court of Appeals for the D.C. Circuit issued an Order today granting an injunction precluding the National Labor Relations Board from implementing its notice posting rule, pending appeal of a lower court decision upholding the validity of the rule.  The notice posting rule was scheduled to go into effect on April 30, 2012, but employers will not be required to comply with the rule until the D.C. Circuit Court of Appeals has had the opportunity to determine whether the NLRB exceeded its authority under the National Labor Relations Act by issuing the rule.

In its Order granting the injunction, the D.C. Circuit Court of Appeals noted that the NLRB voluntarily postponed implementation of the notice posting rule during the pendency of the proceedings before the U.S. District Court for the District of Columbia, which seemed to undercut the NLRB's argument that the rule should take effect during the pendency of the appeal.  The D.C. Circuit Court of Appeals also noted that the NLRB indicated an intent to cross-appeal the portion of the District Court's decision that invalidated certain enforcement provisions of the rule, which created some uncertainty regarding the manner in which the rule will be enforced.

Prior to the issuance of this injunction, U.S. District Courts in two separate jurisdictions had issued conflicting decisions regarding the validity of the notice posting rule.  The U.S. District Court for the District of Columbia held in March that the NLRB had the authority to require employers to post the notice, but did not have the authority to issue a blanket rule that failure to post the required notice will be considered an unfair labor practice and did not have the authority to permit tolling of the six-month statute of limitations for unfair labor practice charges in situations where an employer fails to post the required notice.  However, the U.S. District Court for the District of South Carolina held on April 13, 2012 that the NLRB did not even have the authority to require employers to post the notice.  In its Order granting the injunction, the D.C. Circuit Court of Appeals cited the recent U.S. District Court for the District of South Carolina decision.

According to the D.C. Circuit Court of Appeals Order, briefing of the appeal is expected to be completed by June 29, 2012, and oral argument is expected to be scheduled in September 2012.

On April 13, 2012, the U.S. District Court for the District of South Carolina held that the National Labor Relations Board's rule requiring private sector employers to post a notice of employee rights under the National Labor Relations Act is invalid, because the NLRB did not have the authority under the NLRA to promulgate the rule.  There are now conflicting decisions of U.S. District Courts in two separate jurisdictions regarding the validity of the notice posting rule.  The U.S. District Court for the District of Columbia previously held that the NLRB had the authority to require employers to post the notice, but also found that certain enforcement provisions of the rule were invalid.

In the case filed by the U.S. Chamber of Commerce and the South Carolina Chamber of Commerce, the U.S. District Court Judge noted that the NLRA grants the NLRB authority to promulgate rules that are "necessary to carry out" the provisions of the NLRA.  The Judge held that the NLRB failed to demonstrate that the notice posting rule is "necessary" to carry out any provisions of the NLRA.

The decision of the U.S. District Court for the District of Columbia upholding the validity of the notice posting rule has already been appealed by the plaintiffs to the District of Columbia Circuit Court of Appeals, and it is likely that the NLRB will appeal the recent decision of the U.S. District Court for the District of South Carolina to the Fourth Circuit Court of Appeals.  If the two Circuit Courts of Appeals reach conflicting decisions, it is possible that the U.S. Supreme Court may eventually address the validity of the NLRB's notice posting rule.

The notice posting rule was scheduled to take effect on April 30, 2012.  At this point, it is not clear  whether the NLRB will suspend enforcement of the notice posting rule for employers across the nation pending appeal, or whether the NLRB will take the position that enforcement of the rule is suspended only for employers within the jurisdiction of the U.S. District Court for the District of South Carolina.  Stay tuned for further updates on this blog as they become available.

 

In a recent decision that will likely have positive implications for similarly-situated public employers across New York State, the Appellate Division for the Second Department reversed a lower court ruling and held that the City of Yonkers' refusal to reimburse new employees for their statutorily-required Tier V retirement plan contributions was not arbitrable.  The appellate court also issued a permanent stay of arbitration.  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 Police and Fire Retirement System ("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 ("Union") were parties to a collective bargaining agreement which expired on June 30, 2009.  Like many other firefighter contracts in the state, the contract required the City to provide a "non-contributory" 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 contract 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 requirement plan.  The Union relied on an exception in the law creating Tier V, which provides that members of the PFRS need not join the contributory Tier V if there is an alternative retirement plan available to them under a collective bargaining agreement that "is in effect on the effective date" of Tier V.  The appellate court found that the Union's reliance on this exception was misguided, because the collective bargaining agreement at issue had expired on June 30, 2009 and, therefore, was not "in effect" as of January 10, 2010, the effective date of Tier V.

The Union also asserted in its grievance that even if their new members were not eligible to join the non-contributory plan, the City was nevertheless obligated under the collective bargaining agreement to pay the new members' 3% contributions.  The appellate court found that this claim was not arbitrable because Civil Service Law Section 201(4) and Retirement and Social Security Law Section 470 prohibit the negotiation of changes to benefits or fund payments related to a public retirement system.

As of the date of this blog post, the New York Court of Appeals is considering a motion filed by the Union for leave to appeal the decision.  Regardless of whether our state's highest court chooses to hear the case or not, this issue is sure to surface again.  Governor Cuomo's recent deal with the Legislature to establish a Tier VI in the various state retirement systems includes, among other things, a sliding-scale of increased employee contributions based upon annual salary (beginning at 3% and topping out at 6%).  Thus, in some ways, the already high -- and very costly -- stakes have doubled.

On March 7, 2012, the U.S. District Court for the District of Columbia denied a request made by the National Association of Manufacturers and other business groups to prohibit the NLRB from enforcing its rule requiring employers to post a notice of employee rights under the National Labor Relations Act, pending their appeal of the District Court's March 2, 2012 decision upholding the rule.

The District Court held that there would be no irreparable harm to employers if the NLRB's notice posting rule were permitted to become effective prior to the issuance of a decision by the U.S. Court of Appeals for the District of Columbia regarding the appeal, because the posting of the notice only makes employees aware "of the rights that they are already guaranteed by law."  The District Court further stated:  "If the Court of Appeals ultimately determines that the Board exceeded its authority in promulgating the Rule, the employers can take the notice down."

Accordingly, although an appeal of the District Court's March 2 decision has been filed, employers are required to post the notice beginning on April 30, 2012.

On March 2, 2012, the U.S. District Court for the District of Columbia issued a decision in the lawsuit filed by the National Association of Manufacturers ("NAM") and the National Right to Work Legal Defense and Education Fund ("NRTW") challenging the notice posting rule promulgated by the National Labor Relations Board ("NLRB").  The Court held that the NLRB had the authority to require employers to post a notice informing employees of their rights under the National Labor Relations Act ("NLRA"), but did not have the authority to issue a blanket rule that failure to post the required notice will be considered an unfair labor practice and did not have the authority to permit tolling of the six-month statute of limitations for unfair labor practice charges in situations where an employer fails to post the required notice.

Although the Court determined that the NLRB exceeded its authority by promulgating a blanket rule that an employer's failure to post the required notice will in all cases constitute an unfair labor practice, the Court held that the NLRB is nevertheless free to determine on a case by case basis whether an employer's failure to post the notice interfered with employees' exercise of their rights under Section 7 of the NLRA.  The Court stated that the NLRB can "make a specific finding based on the facts and circumstances in the individual case before it that the failure to post interfered with the exercise of his or her rights."

In addition, the Court also upheld the portion of the rule providing that the NLRB may consider an employer's failure to post the required notice as evidence of the employer's unlawful motive in unfair labor practice cases where motive is an issue.  The Court found that the NLRB had the authority to issue this portion of the rule because the rule "does not make a blanket finding that will govern future individual adjudications or create a presumption of anti-union animus wherever an employer fails to post the provision."  Therefore, although some of the NLRB's enforcement tools were struck down by the U.S. District Court for the District of Columbia, there could still be significant negative consequences to employers who fail to post the required notice.

It is not clear at this point whether the plaintiffs or the NLRB intend to appeal the Court's decision, or if an appeal will result in a delay of the effective date of the notice posting rule.  Accordingly, employers should be prepared to post the required notice by the April 30, 2012 effective date.

Last month, the Acting General Counsel for the National Labor Relations Board ("NLRB") issued a second report on 14 social media cases recently reviewed by his office.  Although the report does not have the force of law, the report offers some insight into the NLRB's ongoing efforts to reconcile decades of federal labor law on protected employee speech under the National Labor Relations Act ("NLRA") with the new frontier of Twitter, Facebook, and other social media.  Until the NLRB has issued more definitive rulings on the subject, employers should be mindful of the following in crafting their social media policies.

First, a broad "non-disparagement" clause in a social media policy is likely to be considered per se unlawful.  For example, the Acting General Counsel found a policy that prohibited "making disparaging comments about the company through any media . . ." to be unlawful because it could reasonably be construed by employees to restrict their right under Section 7 of the NLRA to discuss wages and working conditions, and it contained no disclaimer language that made clear the policy was not intended to restrict such protected activity.  Employers should avoid using broad and vague terms such as "disparaging," and should instead provide examples of prohibited conduct whenever possible.

Second, even a detailed disclaimer may not save an overly restrictive policy.  In one case, the policy instructed employees not to identify themselves as working for the employer unless they were discussing terms and conditions of employment in an "appropriate" manner.  The Acting General Counsel found the policy to be unsalvageable despite a lengthy disclaimer stating that the policy was not intended to restrict NLRA Section 7 rights and quoting NLRA Section 7 verbatim.  The Acting General Counsel determined that employees still could not discern what types of discussions the employer considered to be "appropriate" or "inappropriate."

Third, restrictions on the disclosure of confidential or other non-public information should be worded such that they cannot be reasonably interpreted to impinge upon an employee's right to discuss wages, working conditions, and other subjects protected by NLRA Section 7.  In rejecting one employer's policy which prohibited disclosure of "confidential, sensitive or non-public information concerning the company on or through company property," the Acting General Counsel determined that the language could reasonably be understood to prohibit employees from discussing subjects protected by NLRA Section 7.  In contrast, the Acting General Counsel approved a pharmaceutical employer's policy prohibiting disclosure of confidential or proprietary information, including customers' personal health information and "embargoed information" such as product launch and release dates and pending reorganizations.  He reasoned that an employee has no right to disclose "embargoed" corporate information and would understand that the remainder of the rule was intended to protect customer privacy interests and not to prohibit discussion about working conditions.

Fourth, a policy that requires employees to expressly state that their comments are their personal opinions, and not those of their employer, each and every time they post on social media sites, is regarded by the Acting General Counsel as an unlawful burden on employees' exercise of their NLRA Section 7 rights.  However, the Acting General Counsel appears to have carved out an exception for policies that require such disclaimers where an employee's post involves the endorsement or promotion of the employer's products or services.

Prior blog posts regarding the NLRB's treatment of social media cases can be found here, here, here, and here.

The U.S. Chamber of Commerce and the Coalition for a Democratic Workplace filed a motion for summary judgment on February 3 in their court challenge to the National Labor Relations Board's final rule amending the procedures applicable to representation elections.  In their motion for summary judgment, the business groups requested that the United States District Court for the District of Columbia invalidate the NLRB's amendments to the representation election procedures on several grounds, including:  (1) the amendments were adopted by only two members rather than a three-member quorum; and (2) the final rule is inconsistent with the provisions of the National Labor Relations Act.

The NLRB also filed its own motion for summary judgment in the case on February 3, defending its rule-making process and seeking dismissal of the business groups' complaint.

Each party now has the opportunity to respond to the other party's motion by February 28.  The NLRB's final rule is currently scheduled to go into effect on April 30.  It is not clear at this point whether oral argument will be scheduled by the court or whether a decision will be issued by the effective date of the final rule.

New York's highest court recently ruled that a provision in the collective bargaining agreement between the Village of Johnson City and its firefighters' union which states that the Village will not "lay-off any member of the bargaining unit during the term of this contract" is not explicit enough to prevent the Village from abolishing the positions of six firefighters and terminating their employment.

Under New York law, a "job security" provision in a public sector collective bargaining agreement violates public policy and is unenforceable unless, among other requirements, it explicitly prohibits the public employer from abolishing positions even due to budgetary constraints and the collective bargaining agreement that contains the provision is reasonable in duration.  The public policy rationale for this stringent requirement is that public employers should not be hamstrung in their efforts to eliminate positions for economic reasons unless they have clearly promised to maintain employment levels for some reasonable period of time.

In the Village of Johnson City case, the Court of Appeals determined that the provision in the collective bargaining agreement prohibiting layoffs did not explicitly prohibit the Village from abolishing firefighter positions out of budgetary necessity.  Accordingly, the Court of Appeals upheld the layoffs of the six firefighters and denied the union's application to compel the Village to submit to the arbitration process.