The General Counsel for the National Labor Relations Board (“NLRB”) recently published a guidance memorandum that provides specific examples of lawful and unlawful employee handbook rules in the areas of confidentiality, professionalism and employee conduct, use of company logos, copyrights and trademarks, conflicts of interest, photography and recording, and interaction with the media and other third parties.  The memorandum also includes General Counsel-approved handbook rules that were adopted as part of an unfair labor practice settlement with the fast-food chain, Wendy’s. Over the past few years, the NLRB and its General Counsel have aggressively scrutinized many frequently used employee handbook provisions.  The basis for this scrutiny is the alleged infringement of the right of employees to engage in protected concerted activity under Section 7 of the National Labor Relations Act (“NLRA”).  Section 7 activity includes the right to discuss, challenge, question, and advocate changes in wages, hours, and other terms and conditions of employment in both unionized and non-unionized work environments.  Of course, it also includes the right to engage in union organizing.  A majority of the current NLRB will deem an employee handbook provision to violate the NLRA if it specifically prohibits Section 7 activity or if “employees would reasonably construe” the rule as prohibiting such activity.  It is this “reasonably construe” language that has resulted in many common employee handbook provisions being declared unlawful by the majority of the current NLRB. While one could editorialize at length regarding the razor-thin distinctions drawn between the provisions found lawful and unlawful, the usefulness of the guidance for employers lies in its concrete examples, some of which are highlighted below. Confidentiality Rules A confidentiality policy will be deemed by the current NLRB to violate the NLRA if it specifically prohibits employee discussions regarding terms and conditions of employment, such as wages or workplace conditions, or if employees would reasonably construe the policy to prohibit such discussions. Unlawful

• Do not discuss customer or employee information outside of work, including phone numbers and addresses.
• Never publish or disclose the employer’s or another’s confidential or other proprietary information.  Never publish or report on conversations that are meant to be private or internal to the employer.

Lawful

• No unauthorized disclosure of business secrets or other confidential information.
• Do not disclose confidential financial data, or other non-public proprietary company information.  Do not share confidential information regarding business partners, vendors, or customers.

Employee Conduct/Professionalism Rules The memorandum reinforces that employees have the right to criticize their employer’s policies and actions toward its employees, and therefore, any policies prohibiting disrespectful, inappropriate, or rude conduct toward the employer have been deemed unlawfully overbroad.  In contrast, rules requiring employees to be respectful to co-workers, clients, and customers have generally been found to be lawful. Unlawful

• Be respectful of the company, other employees, customers, partners, and competitors.
• No defamatory, libelous, slanderous, or discriminatory comments about the company, its customers and/or competitors, its employees, or management.

Lawful

• No rudeness or unprofessional behavior toward a customer or anyone in contact with the company.
• Being insubordinate, threatening, intimidating, disrespectful, or assaulting a manager/supervisor, co-worker, customer, or vendor will result in discipline.

Use of Company Logos, Copyrights, and Trademarks The NLRB has found that a broad ban on use of an employer’s name, logo, or other trademark is unlawful because it may restrict the use of the company name and logo on picket signs, leaflets, and other protest material. Unlawful

• Do not use any company logos, trademarks, graphics, or advertising materials in social media.

Lawful

• Respect all copyright and other intellectual property laws.  For the employer’s protection as well as your own, it is critical that you show proper respect for the laws governing copyright, fair use of copyrighted material owned by others, trademarks, and other intellectual property, including the employer’s own copyrights, trademarks, and brands.

The release of this guidance suggests the NLRB will continue to aggressively enforce and scrutinize the employment policies of union and non-union employers.  An unlawful policy is itself a violation of the NLRA, and if an employee is disciplined or terminated for violating an unlawful policy, the discipline could be rescinded and the employer could be ordered to restore the employee to his/her position with back pay. As seen in the examples above, tweaking one or two words or adding additional context and clarification to what would be an otherwise overbroad policy can mean the difference between an unlawful or lawful policy.  Employers should, therefore, use this memorandum as a guide in reviewing and revising their handbooks and other employee rules.

In the latest example of dramatic changes to well-developed principles of federal labor law and policy, the National Labor Relations Board ("NLRB" or Board") issued its long-awaited decision in Pacific Lutheran University last week.  For a description of the Board's decision and its potential impact on union organizing at colleges and universities, please click here for our article on the Bond Higher Education Law Report.

Recent activity by the National Labor Relations Board has significantly changed the landscape of union organizing campaigns and representation elections.  Attorneys from Bond, Schoeneck & King's Labor and Employment Department will conduct two free webinars this week to explain these recent developments and their impact on employers.  Each webinar is scheduled for 45 minutes. Ray Pascucci will conduct a webinar on December 17 at 3:00 p.m. to review the Board's final rule on "quickie" union representation elections and provide some practical recommendations to prepare for the possibility of a fast-track union organizing campaign.  Andy Bobrek will conduct a webinar on December 18 at 11:00 a.m. to review the Board's decision in Purple Communications, Inc., holding that employees have a presumptive right to use their employer's e-mail system during non-working time to communicate about union organizing and discuss their terms and conditions of employment.  

On December 15, the National Labor Relations Board's final rule amending the current procedures for handling union representation elections (which has become known as the "quickie" or "ambush" election rule) was published in the Federal Register.  The final rule will become effective on April 14, 2015. Although Board Chairperson Mark Pearce hailed the new representation election procedures as "a model of fairness and efficiency for all," the new procedures provide unions with a significant advantage in representation elections in a number of ways.  Among other things, the new rule shortens the time period between the filing of a petition and the scheduling of an election, requires employers to provide the union with a list of employees in the proposed bargaining unit earlier in the process, requires employers to provide to the union personal telephone numbers and e-mail addresses for employees in the proposed bargaining unit, and limits the issues that may be litigated by employers in a pre-election hearing.  The impending implementation of the final rule makes it even more important for employers to be able to recognize potential union activity as early as possible and to have a plan in place to respond quickly to a union representation petition once it is filed. This is the second time the Board has issued a final rule amending union representation election procedures.  The Board's first final rule was issued on December 22, 2011, but it was declared to be invalid by the U.S. District Court for the District of Columbia on May 14, 2012, because the Board lacked a quorum when it voted on the final rule.  The Board initially appealed the District Court's decision, but subsequently withdrew its appeal and re-issued its proposed rule in February of 2014. The final rule was approved by Board Chairperson Mark Pearce and Board Members Kent Hirozawa and Nancy Schiffer.  Board Members Philip Miscimarra and Harry Johnson dissented and voted against the issuance of the final rule.  The final rule:

• Permits electronic filing of representation election petitions and electronic transmission of election notices, voter lists, and other documents (which is intended to speed up processing);
• Requires that pre-election hearings be scheduled as early as eight days after the hearing notice is served on the parties (currently, pre-election hearings can begin up to two weeks after a petition is filed);
• Limits the issues that can be raised by an employer at a pre-election hearing only to those that are necessary to determine whether it is appropriate to conduct an election, and defers all other issues until the post-election stage (currently, employers can litigate any issues regarding voter eligibility and inclusion within the proposed bargaining unit at a pre-election hearing);
• Requires employers to provide to the Board and the union, at least one business day before the pre-election hearing, a "Statement of Position" identifying any issues they intend to raise regarding the petition and a list of employees in the proposed bargaining unit with their job classifications, shifts, and work locations (currently, employers are not required to provide a list of employees in the proposed bargaining unit until after an election is directed or an election agreement is approved);
• Eliminates the right to file post-hearing briefs after a pre-election hearing unless the Regional Director determines that they are necessary, and instead provides only for oral closing arguments at the conclusion of the hearing;
• Provides that an employer's request for Board review of a Regional Director's decision will not stay the election, unless the Board orders otherwise; and
• Requires employers to provide the Excelsior list of voter information to the union within two business days after an election is directed or an election agreement is approved, and requires employers to include employees' personal telephone numbers and e-mail addresses on the list if that information is available (currently, the time frame to provide the list is seven days after an election is directed or an election agreement is approved and the list need only include names and home addresses).

Currently, the general time period from the filing of the petition to the representation election is approximately five to six weeks.  The amendments contained in the final rule will likely shorten that time period to approximately two to three weeks, which will give employers much less time to communicate with employees regarding the drawbacks of unionization, to explain the realities and risks of the collective bargaining process, and to dispel the myth that unionization will automatically result in better wages and benefits.  Accordingly, it will be even more important for employers to train their supervisors to recognize and report some early warning signs of union activity and to develop a plan to respond quickly to a union representation petition once it is filed. Ray Pascucci, one of my colleagues in the Labor and Employment Department of Bond, Schoeneck & King, will be conducting a webinar on the Board's final rule on Wednesday, December 17, at 3:00 p.m.  Ray will review each element of the final rule and provide some practical recommendations to prepare for the possibility of a fast-track union organizing campaign.  More details will follow.

On December 11, 2014, the National Labor Relations Board ("Board") issued a 3-2 decision (with Board Members Philip Miscimarra and Harry Johnson dissenting) in Purple Communications, Inc., holding that employees have a presumptive right to use their employer's e-mail system during non-working time to communicate regarding union organizing and to engage in other protected concerted activities under Section 7 of the National Labor Relations Act ("Act").  The Board's decision overruled its 2007 decision in Register Guard. Purple Communications' electronic communications policy provided that its electronic communications systems and equipment were "to facilitate Company business" and that "all such equipment and access should be used for business purposes only."  The policy also prohibited employees from using its systems and equipment to engage "in activities on behalf of organizations or persons with no professional or business affiliation with the Company" and to send "uninvited e-mail of a personal nature."  There was no dispute that, under the Board's 2007 Register Guard decision, the policy was perfectly lawful as written. In the fall of 2012, the Communications Workers of America ("Union") filed petitions to represent employees at seven of Purple Communications' facilities.  After an election was held, the Union filed objections to the results of the election at two facilities and an unfair labor practice charge, alleging (among other things) that the electronic communications policy interfered with the employees' Section 7 rights. The Administrative Law Judge, relying on the Board's 2007 Register Guard decision, found the electronic communications policy to be lawful.  The Board majority, however, found that the Register Guard decision improperly placed too much weight on the property rights of employers in their own e-mail systems and too little weight on the Section 7 right of employees to communicate in the workplace about their terms and conditions of employment.  The Board majority also believed that the Register Guard decision failed to recognize the importance of e-mail as a means by which employees engage in protected communications.  Therefore, the Board majority overruled its Register Guard decision and held that employees have a presumptive right to use their employer's e-mail system during non-working time to engage in communications protected by Section 7 of the Act. The Board made clear in its decision that this presumption applies only to employees who have been granted access to the employer's e-mail system in the course of their work and does not require an employer to provide access to its e-mail system to employees who do not otherwise need it.  In addition, the Board held that an employer may rebut the presumption and justify a total ban on non-business use of its e-mail system by demonstrating that "special circumstances make the ban necessary to maintain production or discipline."  Virtually no guidance is provided in the decision regarding what those "special circumstances" might be, but the Board majority stated that "we anticipate that it will be the rare case where special circumstances justify a total ban on non-work e-mail use by employees."  The Board remanded the case back to the Administrative Law Judge for a determination of whether Purple Communications could successfully rebut the presumption and justify the scope of its prohibition on the personal use of e-mail. The restriction that employees may use their employer's e-mail system for Section 7 purposes only during non-working time raises a significant question:  can an employer monitor employee use of its e-mail systems during working time to ensure compliance with this restriction and discipline employees who are found to have engaged in Section 7 activity through e-mail during working time, without risking potential liability for unlawful surveillance or discrimination based on union activities?  According to the Board's decision, an employer may continue to notify employees that they should have no expectation of privacy in their use of the employer's e-mail system and may continue to monitor the use of its e-mail system for legitimate business purposes.  However, the Board stated that this monitoring is lawful only if "the employer does nothing out of the ordinary."  For example, the Board's decision leaves open the possibility that an employer's increased monitoring during a union organizing campaign or an employer's particular focus on employees who are known union activists could result in potential liability under Sections 8(a)(1) or 8(a)(3) of the Act. Members Miscimarra and Johnson both wrote strong dissenting opinions.  In the view of the dissenters, an employer's interests in controlling the use of its own electronic communications system should prevail over employees' interests in using that system for union organizing activities, especially in light of the availability of other electronic communications networks such as employees' own personal e-mail and social media sites. Many employers' electronic communications policies already permit employees to engage in some limited personal use of their e-mail systems as long as that personal use does not interfere with the employee's work duties or the work duties of other employees.  This type of policy may very well be lawful even under the Board's Purple Communications decision, because, on its face, it likely would not be interpreted to prohibit Section 7 protected activity during non-working time.  At this point, however, if your electronic communications policy contains a blanket prohibition on the use of your e-mail system for personal reasons, you may want to consider potential revisions to your policy. Andrew Bobrek, one of my colleagues in the Labor and Employment Department of Bond, Schoeneck & King, will be conducting a webinar on the Board's Purple Communications decision on Thursday, December 18, at 11:00 a.m.  More details will follow.

The exact limits of employee protected speech on social media are still finding definition, but a recent National Labor Relations Board decision identifies at least one limit:  premeditated insubordination.  In Richmond District Neighborhood Center, the Board held that two employees who discussed their plans on Facebook to engage in insubordinate activity on the job did not engage in protected activity, and the employer therefore did not commit an unfair labor practice by rescinding their rehire offers. In Richmond, the employer operated a teen center in San Francisco.  At an employee meeting, the employer solicited feedback on the program and employees submitted their perceived “pros” and “cons” regarding the program.  Following the meeting, two employees requested a follow-up meeting and the employer denied their requests.  During the subsequent summer break (during which employees are sent offer letters for rehire), the employer sent the two employees offer letters and the two employees engaged in the following conversation on Facebook about their plans to return to the program the following year: EMPLOYEE 1:  I'll be back, but only if you and I are going to be ordering s***, having crazy events at the Beacon all the time.  I don't want to ask permission, I just want it to be LIVE.  You down? EMPLOYEE 2:  Im gOin to be a activity leader im not doin the [teen center] let them figure it out and when they start loosn kids i aint helpn HAHA EMPLOYEE 1:  hahaha.  Sweet, now you gonna be one of us.  Let them do the numbers, and we'll take advantage, play music loud, get artists to come in and teach the kids how to graffiti up the walls and make it look cool, get some good food.  I don't feel like bein their b**** and making it all happy-friendly-middle school campy.  Let's do some cool s***, and let them figure out the money.  No more Sean.  Let's f*** it up.  I would hate to be the person takin your old job. EMPLOYEE 2:  Im glad im done with that its to much and never appriciated sO we just gobe have fuN dOin activities and the best part is WE CAN LEAVE NOW hahaha I AINT GOBE NEVER BE THERE even thO shawn gone its still hella stuCk up ppl there that dont appriciate nothing EMPLOYEE 1:  You right.  They dont appreciate s***.  Thats why this year all I wanna do is s*** on my own.  have parties all year and not get the office people involved.  just do it and pretend they are not there.  i'm glad you arent doing that job.  let some office junkie enter data into a computer.  well make the beacon pop this year with no ones help. EMPLOYEE 2:  They gone be mad cuZ on wednesday im goin there aNd tell theM mY title is ACTIVITY LEADER dont ask me nothing abOut the teen cenTer HAHA we gone have hella clubs and take the kids ;) EMPLOYEE 1:  hahaha!  F*** em.  field trips all the time to wherever the f*** we want! EMPLOYEE 2:  U f**** right see u WednesdaY EMPLOYEE 1:  I won't be there wednesday.  I'm outta town.  But I'll be back to raise hell wit ya.  Dont worry.  Whatever happens I got your back too. After a co-worker took a screenshot of the conversation and showed the employer, the employer rescinded the employees’ rehire offers.  The Board's General Counsel challenged the revocation of the offers as an unfair labor practice, arguing that the employees’ Facebook conversation constituted protected concerted activity under Section 7 of the National Labor Relations Act. The Board disagreed, noting that the “Facebook exchange contains numerous statements advocating insubordination” which could not be “easily explained away as a joke, or hyperbole divorced from any likelihood of implementation.”  The Board distinguished the conversation from “brief comments” which, in contrast, might be dismissed as hyperbole.  The Board held:  "The magnitude and detail of insubordinate acts advocated in the posts reasonably gave the Respondent concern that [the employees] would act on their plans, a risk a reasonable employer would refuse to take.  The Respondent was not obliged to wait for the employees to follow through on the misconduct they advocated.”  Accordingly, the employees’ conduct was not protected and the employer did not commit an unfair labor practice by withdrawing the rehire offers. This decision demonstrates that even the current Board has a limit to what type of employee conduct on social media must be tolerated by employers.  Although this decision will likely enable employers to more confidently take action against employees who discuss premeditated insubordination on social media, the distinction between true threats of insubordination and what the Board might consider to be hyperbole is somewhat murky.  Employers should still tread carefully before disciplining employees for conversing on Facebook about work-related issues.

On August 22, 2014, the National Labor Relations Board ("NLRB") issued companion decisions in Three D, LLC d/b/a Triple Play Sports Bar and Grille, holding that the employer violated the National Labor Relations Act ("NLRA") by terminating two employees for participating in an online discussion on Facebook.  The Triple Play decision is yet another reminder to employers to exercise caution in imposing discipline against employees for conduct that takes place on social media.  The decision also underscores the need for employers to review their existing social media policies to ensure that the policies are not so overly broad that employees might interpret them to prohibit complaints and conversations about their terms and conditions of employment. Triple Play is a bar and restaurant whose employees are not unionized.  In January 2011, Jillian Sanzone and another employee discovered that they owed more in State income taxes than they had expected due to a withholding error by Triple Play.  While at work, Sanzone complained about this issue to other employees who, in turn, complained to the employer.  In response, the employer planned to hold a meeting in February with its staff members and payroll company to discuss the employees' concerns. On January 31, 2011, Jamie LaFrance, who had left her employment with Triple Play in November 2010, posted the following “status update” to her Facebook page:  "Maybe someone should do the owners of Triple Play a favor and buy it from them.  They can’t even do the tax paperwork correctly!!!  Now I OWE money . . . Wtf!!!!"  Several employees and non-employees responded to LaFrance’s post with various comments, most of which used profanity and criticized Triple Play's owners.  One employee, Vincent Spinella, did not post a comment, but did select the “Like” button under LaFrance’s original comment.  Sanzone posted her own comment, stating:  “I owe too.  Such an asshole.” One of Triple Play's owners learned about the Facebook discussion through his sister, who was a Facebook “friend” of LaFrance.  When Sanzone reported to work on February 2, 2011, Triple Play's owners notified her that she was being discharged because of her Facebook comment.  On February 3, 2011, when Spinella reported to work, Triple Play’s owners called him into a meeting, questioned him about the Facebook conversation, and informed him that he was being discharged because his selection of the "Like" button meant that he supported the "disparaging and defamatory comments" of the other participants in the conversation. The NLRB affirmed the Administrative Law Judge’s decision that the Facebook discussion constituted concerted activity under Section 7 of the NLRA and “was ‘part of an ongoing sequence’ of discussions that began in the workplace about the Respondent’s calculation of employees' tax withholding.”  The NLRB also held that Sanzone and Spinella were engaged in protected concerted activity because the Facebook discussion related to “workplace complaints about tax liabilities, the Respondent’s tax withholding calculations, and LaFrance’s assertion that she owed back wages.”  Notably, the NLRB found that Spinella’s selection of the “Like” button “expressed his support for others who were sharing their concerns and ‘constituted participation in the discussion that was sufficiently meaningful as to rise to the level of’ protected, concerted activity.” In balancing the interest of Triple Play's owners in preventing disparaging comments by their employees, the NLRB held that Spinella's and Sanzone’s comments were not “so disloyal” as to lose protection under the NLRA.  Accordingly, the NLRB affirmed the Administrative Law Judge’s decision that Triple Play violated the NLRA by interrogating and discharging Spinella and Sanzone because of their participation in the Facebook conversation. Notably, the NLRB also found that Triple Play's “Internet/Blogging” policy violated Section 8(a)(1) of the NLRA.  Although the policy did not explicitly restrict protected activity, the NLRB held that the policy, insofar as it prohibited employees from engaging in “inappropriate discussions about the company,” was overly broad.  In light of Triple Play's discharge of Spinella and Sanzone, the NLRB reasoned that Triple Play's other employees could reasonably interpret the policy as prohibiting discussions regarding their terms and conditions of employment.

We originally addressed this topic on November 9, 2012, discussing the National Labor Relations Board's scrutiny of employer handbooks containing employment-at-will provisions.  Since these disclaimers are widely used in handbooks – as well as employment applications and offer letters – the NLRB’s sudden focus on such provisions was potentially significant.  Employers drew some comfort from two 2012 Advice Memoranda issued by the NLRB’s General Counsel’s Office (Case 32-CA-086799 & Case 28-CA-084365), but both of those Advice Memoranda warned employers that “the law in this area remains unsettled.” Fast forward to July 2014.  Is there anything new on this topic and if so, should employers be concerned?  In fact, there have been two noteworthy developments this year. First, on February 25, 2014, the General Counsel’s Office issued a memorandum on “Mandatory Submissions to Advice” which noted there should be “centralized consideration of certain issues” by the General Counsel's Office.  The memo went on to cite “cases involving ‘at-will’ provisions in employer handbooks” as an area identified for such centralized oversight.  Accordingly, the NLRB’s 26 regional offices will submit cases involving at-will provisions to the General Counsel’s Office for guidance, to the extent that prior NLRB case law precedent or earlier Advice Memoranda do not definitively resolve the legal issues being faced.  In sum, look for continuing developments coming straight from Washington, D.C., on this subject. Second, the General Counsel’s Office recently found the following at-will policy of Lionbridge Technologies in Redmond, Washington, did not obstruct employees from organizing a union or interfere with other concerted activity under Section 7 of the National Labor Relations Act:

Employment at [the Employer] is on an at-will basis unless otherwise stated in a written individual employment agreement signed by the [Senior Vice President of] Human Resources.  This means that employment may be terminated by the employee or [the Employer] at any time, for any reason or for no reason, and with or without prior notice. No one has the authority to make any express or implied representations in connection with, or in any way limit, an employee’s right to resign or [the Employer’s] right to terminate an employee at any time, for any reason or for no reason, with or without prior notice.  Nothing in this handbook creates an employment agreement, express or implied, or any other agreement between any employee and [the Employer]. No statement, act, series of events or pattern of conduct can change this at-will relationship.

(Brackets in original). In finding the above provision to be lawful, the GC’s Office reasoned:

• the language, on its face, did not expressly limit any union organizing or concerted activity;
• the employer did not promulgate the disclaimer in response to union organizing or concerted activity;
• the employer had not applied the policy unlawfully;
• employees could not reasonably construe the provision to prohibit union organizing or concerted actions;
• the language did not threaten discipline for employees seeking to unionize to change their at-will status; and
• the policy did not ask employees to waive any rights they held under Section 7.

In concluding the policy was lawful, the General Counsel’s Office essentially aligned with what employers have long intended regarding their at-will disclaimers:  such provisions have everything to do with providing a rock-solid defense to claims by ex-employees for breach of an implied employment contract and nothing whatsoever to do with inhibiting union organizing or other concerted activity.  While the latest news from Washington, D.C., is clearly favorable and pro-employer, employers should nevertheless carefully review any at-will policy to ensure it is lawful, in light of the NLRB’s continued interest in scrutinizing such provisions.

On June 26, 2014, the U.S. Supreme Court affirmed the decision issued by the U.S. Court of Appeals for the District of Columbia Circuit that President Obama's recess appointments to the National Labor Relations Board ("NLRB") on January 4, 2012, were unconstitutional.  The Supreme Court's decision in NLRB v. Noel Canning means that the NLRB did not have a valid quorum of three members from the date of the recess appointments to early August of 2013, when four new members were sworn in after being confirmed by the Senate.  Every decision issued by the NLRB during that approximately 19-month time period without a valid quorum has been rendered invalid by the Supreme Court's Noel Canning decision.  It remains to be seen how the NLRB will deal with this development, but it may now have to reconsider and issue new decisions in each and every case that was decided without a valid quorum in place.  However, in light of the fact that the majority of the NLRB members is still staunchly pro-union, it would be unrealistic to expect significantly different outcomes in cases that were decided against employers. Although the Supreme Court affirmed the D.C. Circuit's conclusion that President Obama exceeded his authority under the Recess Appointments Clause of the U.S. Constitution, the Supreme Court disagreed with the D.C. Circuit's narrow interpretation of the Recess Appointments Clause.  The Recess Appointments Clause permits the President to "fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session."  The D.C. Circuit held that the phrase "the Recess of the Senate" applies only to recesses that occur in between sessions of the Senate -- not to breaks in activity that occur during a session of the Senate.  The January 4, 2012, recess appointments were not made during a recess that occurred in between sessions of the Senate.  The D.C. Circuit also interpreted the phrase "Vacancies that may happen during the Recess of the Senate" to mean that the vacancy actually must arise during the Senate's inter-session recess in order for the President to have the authority to fill the vacancy without going through the Senate confirmation process.  None of the three vacancies that President Obama sought to fill on January 4, 2012 arose during the Senate's inter-session recess. The Supreme Court adopted a broader interpretation of the scope of the President's authority under the Recess Appointments Clause.  The Supreme Court held that the phrase "the Recess of the Senate" applies both to inter-session recesses (breaks that occur between sessions of the Senate) and intra-session recesses (breaks that occur in the midst of a formal session of the Senate) of substantial length.  The Supreme Court also held that the phrase "Vacancies that may happen during the Recess of the Senate" applies both to vacancies that first arise during a recess and vacancies that initially occur before a recess but continue to exist during the recess.  The Supreme Court nevertheless determined that President Obama's recess appointments during a three-day intra-session recess of the Senate were unconstitutional because the three-day recess was not of substantial length.  The Supreme Court held that a recess of less than ten days is presumptively too short to permit the President to make recess appointments, but left open the possibility that unusual circumstances might require the President to exercise recess appointment authority during a recess of less than ten days. Some of the NLRB decisions that have now been rendered invalid include:  (1) the NLRB's September of 2012 holding in Costco Wholesale Corp. that an employer's social media policy was overly broad and in violation of Section 8(a)(1) of the National Labor Relations Act ("NLRA"); (2) the NLRB's December of 2012 holding (and reversal of 50 years of precedent) in WKYC-TV, Inc. that an employer's obligation to check off union dues continues after the expiration of a collective bargaining agreement; (3) the NLRB's December of 2012 holding (and reversal of 35 years of precedent) in American Baptist Homes of the West d/b/a Piedmont Gardens that witness statements related to employee discipline are not necessarily shielded from disclosure to the union; and (4) the NLRB's July of 2012 holding in Banner Health System that an employer violated Section 8(a)(1) of the NLRA by asking employees not to discuss ongoing investigations with their co-workers. Although these decisions and many others will likely be revisited, it seems unlikely that the NLRB will issue significantly different rulings.  Accordingly, employers should assume at this point that the invalid decisions will be affirmed by the current NLRB.

In a decision issued last week, an Administrative Law Judge (“ALJ”) for the National Labor Relations Board (“NLRB”) ruled that an interim grievance procedure between an employer and a newly-certified union did not have to include an arbitration option in order to relieve the employer of the obligation to provide the union with notice and an opportunity to bargain before imposing significant discretionary discipline. As we previously posted, in late 2012, the NLRB issued a groundbreaking decision in Alan Ritchey, Inc., requiring for the first time that in the absence of a binding agreement addressing discipline, an employer must provide the union with a bargaining opportunity prior to issuance of significant discretionary discipline (i.e., suspension, demotion, or discharge).  This issue would ordinarily arise during the period after a union is newly certified, but before an agreement has been reached with the employer on an initial contract. The Alan Ritchey decision did not specifically address whether an interim grievance procedure had to offer an arbitration option if internal grievance efforts failed to resolve any disagreement over the proposed discipline.  There was no binding agreement between the employer and the union in the Alan Ritchey case and, recognizing the significant change in the law that the decision entailed, the NLRB decided to apply the new requirement on a prospective basis only. In Medic Ambulance Service, ALJ Cracraft found that an interim grievance procedure did not require an arbitration option to satisfy the Alan Ritchey requirements.  In Medic Ambulance, while negotiations for an initial collective bargaining agreement were underway, the employer and the newly certified union agreed to follow the first two steps set forth in the grievance/arbitration section of the employer’s expired agreement with a prior union.  The parties also expressly agreed, however, that the third step (arbitration) would not be available until a new contract was signed. ALJ Cracraft found that the agreement regarding the first two grievance steps constituted an agreed-upon interim grievance procedure that relieved the employer of its obligation to bargain with the union prior to imposing significant discretionary discipline.  The General Counsel for the NLRB contended that the procedure did not satisfy the Alan Ritchey requirements because it did not include an arbitration option, but ALJ Cracraft summarily rejected that argument:

Surely if the Board intended to mandate arbitration as a part of an interim grievance procedure, its decision would have clearly provided such guidance.  Thus, in disagreement with the General Counsel, I find that Alan Ritchey does not specifically require that an interim grievance procedure contain an arbitration component.

Having concluded that arbitration was not a required element of an interim grievance procedure, the ALJ held that the two-step “grievance only” procedure was sufficient to relieve the employer of its obligation to provide the union with notice and an opportunity to bargain before it terminated several employees. The ALJ's Medic Ambulance decision offers a welcome constraint to the far-reaching scope of the NLRB's Alan Ritchey decision.  Employers should be cautioned, however, that the ALJ's decision is not binding precedent and the union may still pursue an appeal to the NLRB.

For the first time in New York State, a Regional Director for the National Labor Relations Board ("NLRB") has asserted NLRB jurisdiction over a New York charter school, and ordered an election for a unit of approximately 35 teachers at the school.  The decision, Hyde Leadership Charter School Brooklyn, Case No. 29-RM-126444, preempts the New York Public Employment Relations Board ("PERB") from asserting jurisdiction, and conflicts with prior PERB decisions holding that charter schools are public entities for labor relations purposes. The Hyde Leadership decision involved a representation petition for teachers at a charter school in Brooklyn, New York.  On April 14, 2014, the United Federation of Teachers, Local 2 (the "Union"), filed a petition with PERB seeking certification for a unit of approximately 35 teachers at the school.  That same day, the school filed a representation petition with the NLRB seeking an election for the same unit of employees.  Because the National Labor Relations Act excludes “any state or political subdivision thereof,” the NLRB was tasked with deciding the public or private nature of the charter school. To establish jurisdiction over the Hyde Leadership school, the NLRB would have to determine that the school was not a “political subdivision” of the state under the Supreme Court’s standard set forth in its NLRB v. Natural Gas Utility District of Hawkins County decision.  Under the Hawkins County decision, an entity is a political subdivision if it is created directly by state so as to constitute a department or administrative arm of the government, or if it is administered by individuals who are responsible to public officials or to the general electorate. Applying the Hawkins County standard to the Hyde Leadership school, the NLRB acknowledged the blend of public and private characteristics embedded in New York charter schools and the New York State Charter Schools Act (“Charter Schools Act”).  Factors suggesting a public character include:  the Board of Regents, a public entity, issues the charter and can revoke the charter upon discovering certain problems such as fiscal mismanagement; the school is funded almost entirely with public funds; the language of the Charter Schools Act refers to charter schools as independent and autonomous public schools and states that charter school employees are public employees for purposes of New York’s public employment relations law; the charter schools are subject to certain public officers laws; and New York City charter schools are subject to audit by the city comptroller. However, factors suggesting a private character include:  private individuals create and submit the charter agreement for approval (although this can optionally be done in conjunction with a public entity); except for laws specified in the Charter Schools Act, the charter schools are exempt from “all other laws and regulations governing public or private schools”; the charter schools are non-public for designation of textbooks, health services, student transportation, and other services; charter school employees are employees of the “education corporation” that runs the charter school, not the public school district; and there is no requirement that the board of directors for the charter schools be appointed or elected by any public entity or include any public officials. The Regional Director weighed the factors and concluded that the Hyde Leadership school was not a political subdivision under the Hawkins County test and therefore was subject to NLRB jurisdiction.  Specifically, the Regional Director held that the charter school was not “created by the state” because private individuals applied to establish the charter school, and it was not an “administrative arm of the government” because the governance and control of the charter school “vested solely in the private incorporators” rather than in the public entities.  Moreover, the school was not administered by individuals who are responsible to public officials or the general electorate, as none of the school’s governing trustees are appointed by public officials. Accordingly, the Regional Director asserted NLRB jurisdiction over the school and directed an election.  Although this does not establish a “bright line” rule that all New York charter schools will necessarily be subject to NLRB jurisdiction (and the Union may still challenge the Regional Director's decision), the factors that contributed to the holding are largely statutory, and may compel a similar conclusion for other charter schools in New York.

In a stunning and potential landmark decision, a Regional Director of the National Labor Relations Board has found that football players receiving grant-in-aid scholarships from Northwestern University (the “University”) are “employees” under the National Labor Relations Act.  In his decision released Wednesday afternoon, the Regional Director determined that “players receiving scholarships to perform football-related services for [the University] under a contract for hire in return for compensation are subject to [the University]’s control and are therefore employees within the meaning of the Act.”  Accordingly, the Regional Director ordered that an election be conducted among all football players receiving grant-in-aid scholarships who have not exhausted their playing eligibility for the University. In support of his decision, the Regional Director found that the players receive compensation for the athletic services they perform in the form of scholarships, which pay for the players’ tuition, fees, room, board, and books and can total as much as $76,000 per calendar year for up to five years.  Furthermore, the Regional Director found that the players are under the strict control of the University throughout the year.  The coaches determine the location, duration, and manner in which the players carry out their football-related activities; they monitor the players’ adherence to NCAA and team rules; and they control “nearly every aspect of the players’ private lives,” including their living arrangements, applications for outside employment, off-campus travel, social media posts, and communications with the media.  In contrast, the Regional Director held that “walk-ons do not meet the definition of ‘employee’ for the fundamental reason that they do not receive compensation for the athletic services that they perform.” The University has confirmed that it plans to appeal the decision to the full National Labor Relations Board in Washington, D.C.  If upheld, the decision has the potential to dramatically alter the world of big-time athletics in higher education as it would open the door for scholarship athletes at all private universities to unionize.  Indeed, the decision could have implications for scholarship students in a number of areas beyond athletics. The Union, College Athletes Players Association (“CAPA”), which has the financial backing of the United Steelworkers, is seeking, among other demands, financial coverage for former players with sports-related medical expenses and the creation of an educational trust fund to help former players graduate.