National Labor Relations Board

National Labor Relations Board Reissues Proposed Rule on "Quickie" Elections

February 5, 2014

By Tyler T. Hendry

The National Labor Relations Board ("Board") reissued a proposed rule today that would significantly shorten the timetable for union representation elections.  This same proposed rule (which has become known as the "quickie" or "ambush" election rule) was initially issued by the Board on June 22, 2011.  After the proposed rule was met with strong opposition from employer organizations, the Board issued a final rule on December 22, 2011, that was a scaled-down version of the proposed rule.  The final rule became effective on April 30, 2012.  However, on May 14, 2012, the U.S. District Court for the District of Columbia declared the final rule to be invalid because the Board lacked a quorum when it voted on the final rule.  The Board appealed the decision, but recently announced that it was withdrawing its appeal. As some had predicted, the Board's withdrawal of its appeal set the stage for its reissuance of the broader June 22, 2011, proposed rule.  The proposed rule:

  • Establishes electronic filing of election petitions and other documents (intended to speed up processing);
  • Requires pre-election hearings to begin seven days after a petition is filed (currently, pre-election hearings can begin up to two weeks after a petition is filed);
  • Defers litigation of all “eligibility” issues if they involve less than 20% of the proposed bargaining unit until after the election (these issues would be decided post-election if needed);
  • Eliminates pre-election appeals of rulings by Board Regional Directors; and
  • Reduces the time in which an employer must provide an electronic list of eligible voters from seven days to two days.

If this proposed rule is implemented, it will significantly shorten the time period from the filing of a union representation petition to the date on which a representation election is held.  This creates a distinct advantage for the union, because it gives the employer less opportunity to counteract a union campaign which likely began well before the filing of the representation petition. Comments on the proposed rule from interested parties must be received on or before April 7, 2014.  After the comment period, the Board may revise the proposed rule, or may issue it as a final rule.  The Board’s decision to reissue the original proposed rule that was issued on June 22, 2011 (rather than the final rule that was issued on December 22, 2011) seems to indicate that the Board may not be willing to make significant changes before a final rule is issued.  However, it is likely that the final rule -- in whatever form it is issued -- will once again be challenged by employer organizations in federal court on the ground that the Board exceeded its rulemaking authority.

Union's Rejection of Company's "Final" Proposal Does Not Always Signify Impasse

January 5, 2014

By David E. Prager

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.

Fifth Circuit Court of Appeals Invalidates NLRB's Ruling That Class Action Waivers Violate the NLRA

January 1, 2014

By Subhash Viswanathan

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.

The NLRB Invalidates Employer's Confidentiality Rule Prohibiting the Disclosure of Personal Employee Information

September 23, 2013

By Hilary L. Moreira

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.

Fourth Circuit Court of Appeals Holds That Recess Appointments to the NLRB Were Unconstitutional

July 18, 2013

By Subhash Viswanathan

On July 17, 2013, the Fourth Circuit Court of Appeals held, in a 2-1 decision, that President Obama's January 4, 2012 recess appointments to the National Labor Relations Board ("NLRB") were unconstitutional because the Senate was not in "recess" at the time of the appointments.  The Fourth Circuit is the third federal appellate court to weigh in on this issue, joining the D.C. Circuit (which also held that the January 4, 2012 recess appointments were unconstitutional) and the Third Circuit (which held that Craig Becker's March 27, 2010 recess appointment was unconstitutional).

In the two consolidated cases before the Fourth Circuit, the majority followed the logic of the D.C. Circuit and the Third Circuit, and determined that the President is only authorized to make recess appointments without confirmation by the Senate during recesses that occur between sessions of the Senate rather than breaks in activity that occur while the Senate is in session.  This issue will ultimately be decided by the Supreme Court, which has agreed to consider the NLRB's appeal from the D.C. Circuit's Noel Canning decision.

NLRB Advice Memorandum Provides Further Guidance on Confidentiality In Investigations

June 27, 2013

By David M. Ferrara

A recent Advice Memorandum from the National Labor Relations Board's Division of Advice provides employers further guidance on how to address and structure employee confidentiality requirements during investigations.  As we reported before on this blog, in Banner Health System, the Board held that an employer violated Section 8(a)(1) of the National Labor Relations Act by directing employees not to discuss complaints made to the employer with co-workers while an investigation into the matter is pending.  In doing so, the Board put employers on notice that “blanket” confidentiality requirements would violate the right of employees to engage in protected concerted activity.

In the recent Advice Memorandum, the Division of Advice addressed the application of Banner Heath in reviewing Verso Paper’s confidentiality rule.  This case raised the question whether Verso’s confidentiality requirement “unlawfully interfered with employees’ Section 7 rights by precluding employees from disclosing information about ongoing investigations into employee misconduct.”  Verso’s Code of Conduct provided:

Verso has a compelling interest in protecting the integrity of its investigations.  In every investigation, Verso has a strong desire to protect witnesses from harassment, intimidation and retaliation, to keep evidence from being destroyed, to ensure that testimony is not fabricated, and to prevent a cover-up.  To assist Verso in achieving these objectives, we must maintain the investigation and our role in it in strict confidence.  If we do not maintain such confidentiality, we may be subject to disciplinary action up to and including immediate termination.

Citing the Board’s decision in Banner Health, the Division of Advice agreed with the Regional Director that the rule was unlawfully overbroad, and advised that a complaint should be issued, absent settlement, against Verso for violating Section (8)(a)(1) of the NLRA.  The Region reasoned that Verso’s provision was in fact a “blanket rule” regarding confidentiality of employee investigations.  Instead, Verso’s rule needed to demonstrate a case-by-case need for confidentiality.  The Division of Advice stressed that the employer has the burden to show in each particular situation that it has a legitimate and substantial business justification for confidentiality, which will outweigh the interference with employees' Section 7 rights.  The Division of Advice also reiterated that a general concern with the investigation’s integrity is not enough, and cited the following factors mentioned in Banner Health where an employer may require confidentiality:  (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.

One could argue that the Verso Advice Memorandum did not plow any new ground beyond the Board's decision in Banner Health.  The Advice Memorandum reaffirms the principle set forth in Banner Health that a simple “blanket rule” of confidentiality during an investigation into employee misconduct will be found to be unlawful.  Rather, the employer must engage in an individualized assessment considering the need for confidentiality in each particular case, analyzing the factors mentioned in Banner Health.

Given the Board’s current position, employers are well advised to draft confidentiality rules consistent with Banner Health’s “specificity” requirements.  In this respect, the Verso Advice Memorandum provides some helpful guidance.  First, the Division of Advice noted that the first two sentences of Verso’s rule lawfully set forth the interest in protecting the integrity of Verso’s investigations, which were:

Verso has a compelling interest in protecting the integrity of its investigations.  In every investigation, Verso has a strong desire to protect witnesses from harassment, intimidation and retaliation, to keep evidence from being destroyed, to ensure that testimony is not fabricated, and to prevent a cover-up.

Second, the Division of Advice suggested that, consistent with Banner Health, Verso could modify the remainder of the rule to lawfully advise its employees that:

Verso may decide in some circumstances that in order to achieve these objectives, we must maintain the investigation and our role in it in strict confidence.  If Verso reasonably imposes such a requirement and we do not maintain such confidentiality, we may be subject to disciplinary action up to and including immediate termination.

We must note that this is only an Advice Memorandum, and the guidance is not binding on the Board.  Employers should also note that the Banner Health case may not survive the Supreme Court's consideration of the D.C. Circuit's decision in Noel Canning v. NLRB and the Third Circuit's decision in NLRB v. New Vista Nursing and Rehabilitation, LLC.  If the Banner Health decision survives, however, the Verso Advice Memorandum at least provides some insight to employers on how to comply with Banner Health.  Avoid blanket rules and tailor policies to specific facts involved in the employee investigation.

U.S. Court of Appeals for the Fourth Circuit Becomes Second Appellate Court to Strike Down NLRB's Notice Posting Rule

June 18, 2013

By Subhash Viswanathan

On June 14, 2013, the U.S. Court of Appeals for the Fourth Circuit held that the rule promulgated by the National Labor Relations Board ("NLRB") requiring employers to post a notice of employee rights under the National Labor Relations Act ("NLRA") is invalid.  The Fourth Circuit is the second appellate court to strike down the NLRB's notice posting rule.  The U.S. Court of Appeals for the D.C. Circuit issued a decision on May 7, 2013 also holding that the rule is invalid.

The Fourth Circuit affirmed a decision rendered by the U.S. District Court for the District of South Carolina, holding that the NLRB did not have the authority under the NLRA to promulgate the rule.  The Fourth Circuit examined the plain language of the statutory text, which grants the NLRB the authority to issue rules that are "necessary to carry out" the provisions of the NLRA, and determined that the notice posting rule was not necessary to carry out any of the provisions of the NLRA.  The Fourth Circuit observed that the NLRB "serves expressly reactive roles," such as conducting representation elections and resolving unfair labor practice charges, and that Congress did not intend to grant the NLRB the authority to take on a proactive role such as requiring employers to post a notice of employee rights under the NLRA.

The Fourth Circuit also noted that Congress explicitly included notice posting requirements in several federal employment and labor laws passed during the span of years from 1935 to 1974, such as Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, and the Occupational Safety and Health Act, but did not include such a requirement in the NLRA despite the fact that the NLRA was amended in other ways three times during that time period.  The Fourth Circuit stated that "Congress's continued exclusion of a notice-posting requirement from the NLRA, concomitant with its granting of such authority to other agencies, can fairly be considered deliberate. . . .  Had Congress intended to grant the NLRB the power to require the posting of employee rights notices, it could have amended the NLRA to do so."

It remains to be seen whether the NLRB will ask the U.S. Supreme Court to consider this issue.  Stay tuned for further developments on this blog.

Third Circuit Court of Appeals Holds That Craig Becker's Recess Appointment to NLRB Was Unconstitutional

May 18, 2013

By Subhash Viswanathan

The Third Circuit Court of Appeals, in NLRB v. New Vista Nursing and Rehabilitation, LLC, held on May 16 that the March 27, 2010 recess appointment of former National Labor Relations Board ("NLRB") member Craig Becker was unconstitutional.  The Third Circuit is the second appeals court to weigh in on the validity of President Obama's recess appointments to the NLRB, but is the first to specifically address the validity of Craig Becker's appointment.  The D.C. Circuit Court of Appeals held, on January 25, 2013, that the January 2012 recess appointments of Sharon Block, Terence Flynn, and Richard Griffin were unconstitutional.

In the New Vista case, a three-member panel of the NLRB, which included Craig Becker, Wilma Liebman, and Brian Hayes, issued a decision and order in August 2011 requiring New Vista to bargain with the union that had won an election to represent a bargaining unit of New Vista's licensed practical nurses ("LPNs").  New Vista had previously argued unsuccessfully that its LPNs were supervisors who were not entitled to unionize.

In analyzing the issue of whether Craig Becker's recess appointment on March 27, 2010 was unconstitutional, the Third Circuit considered three potential interpretations of the word "recess" in the Recess Appointments Clause of the U.S. Constitution:  (1) intersession breaks (breaks between sessions of the Senate); (2) intersession breaks and intrasession breaks (breaks during a session of the Senate) that last a non-negligible period of time (historically considered to be at least 10 days); or (3) any period of time when the Senate is not open to conduct business, and therefore cannot act upon nominations.  The Third Circuit determined that the word "recess" applies only to intersession breaks.  Accordingly, Craig Becker's appointment was held to be invalid at its inception because he was appointed during a two-week intrasession recess in March 2010.  The Third Circuit vacated the NLRB's decision and order because the panel that issued the decision and order did not have three validly appointed members.

The Third Circuit's decision could have far-reaching consequences that go beyond the D.C. Circuit's Noel Canning decision.  The D.C. Circuit's Noel Canning decision called into question the validity of every decision issued by the NLRB from January 4, 2012 to the present because the NLRB lacked a quorum of three validly appointed members during that entire period of time.  The Third Circuit's decision now also calls into question the validity of every NLRB decision from March 27, 2010 to the present that was issued by a three-member panel on which Craig Becker was a participant.

The Supreme Court may soon take up the issue of the validity of President Obama's recess appointments to the NLRB.  On April 25, the NLRB filed a petition for certiorari to the Supreme Court from the D.C. Circuit's Noel Canning decision.  In light of the fact that the Third Circuit's decision addressed the issue in a slightly different context from the D.C. Circuit's decision, and in light of the additional NLRB decisions that could be impacted by the Third Circuit's decision, it is expected that the NLRB will file a petition for certiorari asking the Supreme Court to review the Third Circuit's decision as well.

U.S. Court of Appeals for the D.C. Circuit Holds That NLRB Notice Posting Rule Is Invalid

May 8, 2013

By Subhash Viswanathan

On May 7, 2013, the U.S. Court of Appeals for the D.C. Circuit held that the rule promulgated by the National Labor Relations Board ("NLRB") requiring employers to post a notice of employee rights under the National Labor Relations Act ("NLRA") is invalid.  The D.C. Circuit had previously granted an injunction on April 17, 2012 precluding the NLRB from implementing its notice posting rule.

The appeal to the D.C. Circuit came after the U.S. District Court for the District of Columbia issued a decision in the lawsuit filed by the National Association of Manufacturers and the National Right to Work Legal Defense and Education Fund.  In that lower court decision, the District Court held that the NLRB had the authority to require employers to post the notice, but did not have the authority to determine that failure to post the notice would be 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 if an employer fails to post the notice.

The D.C. Circuit held that all three of the mechanisms for enforcing the NLRB's posting requirement were invalid, which rendered the entire rule invalid.  The three enforcement mechanisms set forth in the rule were:  (1) failure to post the notice would be an unfair labor practice; (2) failure to post the notice could be used as evidence of anti-union animus in unfair labor practice cases in which the employer's motive is at issue; and (3) failure to post the notice could result in tolling of the six-month statute of limitations for unfair labor practice charges.

The D.C. Circuit found that the first two enforcement mechanisms constituted violations of an employer's free speech rights under Section 8(c) of the NLRA.  Section 8(c) of the NLRA provides that "the expressing of any views, argument, or opinion, or the dissemination thereof . . . shall not constitute or be evidence of an unfair labor practice . . . if such expression contains no threat of reprisal or force or promise of benefit."  The D.C. Circuit analyzed this provision in the context of Supreme Court decisions interpreting the First Amendment, and concluded that Section 8(c) not only protects an employer's right to express its views regarding unionism in a non-coercive manner, but also protects an employer from being compelled by the NLRB to disseminate information about unionism that it does not wish to disseminate.  The D.C. Circuit also found that the third enforcement mechanism -- the tolling of the six-month statute of limitations -- constituted an impermissible amendment to the statute of limitations that Congress expressly set forth in the NLRA.

There is still an appeal pending in the Fourth Circuit Court of Appeals on the same issue of whether the NLRB's notice posting rule is invalid.  That appeal arose out of a decision rendered by the U.S. District Court for the District of South Carolina, holding that the NLRB did not have the authority under the NLRA to promulgate the rule.

Second Circuit Upholds Employer's Refusal to Reinstate Home Care Workers Who Struck After Stating They Would Report to Work

March 7, 2013

By David E. Prager

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.”

NLRB Finds Non-Union Employer's Policies Unlawful

February 4, 2013

On January 25, 2013, the same day that the U.S. Court of Appeals for the D.C. Circuit ruled that the recess appointments of Richard Griffin and Sharon Block were unconstitutional, National Labor Relations Board ("NLRB") Members Griffin, Block, and Chairman Mark Gaston Pearce held, in DirectTV U.S. DirecTV Holdings, LLC, that several seemingly neutral and reasonable employer policies promulgated in a non-union setting unlawfully restricted protected activity in violation of the National Labor Relations Act ("NLRA").

The first policy, contained in the employee handbook, instructed employees in part:  "Do not contact the media."  The NLRB found this portion of the policy to be overly broad and unlawful because employee communication with newspaper reporters about labor disputes is protected activity under the NLRA, and the NLRB believed that employees would reasonably construe the rule to prohibit such protected communication.

The second policy, posted on the employer's intranet, provided in part:  "Employees should not contact or comment to any media about the company unless pre-authorized by Public Relations."  The NLRB determined that this rule was overly broad and unlawful for the same reason as the first policy.  The NLRB further held that "any rule that requires employees to secure permission from their employer as a precondition to engaging in protected concerted activity on an employee's free time and in non-work areas is unlawful."

The third policy, contained in the employee handbook, provided in part:  "If law enforcement wants to interview or obtain information regarding a DIRECTV employee . . . the employee should contact the security department in El Segundo, Calif., who will handle contact with law enforcement agencies and any needed coordination with DIRECTV departments."  The NLRB interpreted the term "law enforcement" to include not only the police and representatives of other criminal law enforcement agencies, but also NLRB agents.  Accordingly, the NLRB concluded that this rule was unlawful because employees would reasonably believe that they were required to contact the employer's security department before cooperating with an NLRB investigation.

The fourth policy, contained in the employee handbook, instructed employees in part:  "Never discuss details about your job, company business or work projects with anyone outside the company" and "Never give out information about customers or DIRECTV employees."  The rule included "employee records" as a category of confidential information that could not be discussed or disclosed.  The NLRB found this rule to be unlawful because employees would reasonably understand the rule to restrict discussion of their wages and other terms and conditions of employment.  The NLRB also held that the rule did not exempt protected communications with third parties such as union representatives, NLRB agents, or other government agencies investigating workplace matters.

The fifth policy, posted on the employer's intranet, provided in part:  "Employees may not blog, enter chat rooms, post messages on public websites or otherwise disclose company information that is not already disclosed as a public record."  The NLRB found this rule to be unlawful, because it determined that employees would reasonably interpret "company information" to include information regarding their wages, discipline, performance ratings, and other terms and conditions of employment.

This decision demonstrates that the NLRB is determined to continue its focus on protected activity in non-union settings, and to strike down workplace policies and rules that it believes restrict such protected activity.  In light of the D.C. Circuit Court of Appeals' recent decision invalidating the recess appointments of Members Griffin and Block, it is not clear whether this decision will have any precedential effect.  Nevertheless, employers should carefully examine their own policies to determine whether any revisions or clarifications are necessary before those policies are challenged.

Federal Appeals Court Holds That President Obama's January 4, 2012 Recess Appointments to the NLRB Were Unconstitutional

January 24, 2013

By Subhash Viswanathan

The U.S. Court of Appeals for the District of Columbia Circuit held today, in Noel Canning v. NLRB, that President Obama's recess appointments to the National Labor Relations Board ("NLRB") on January 4, 2012 were unconstitutional because the Senate was not actually in "recess" at the time of the appointments.  At least for now (pending a likely appeal to the U.S. Supreme Court), this holding essentially means that every decision issued by the NLRB from January 4, 2012 to the present is invalid because the NLRB lacked a valid quorum of three members during this entire time.  This holding also means that the NLRB currently has only one properly appointed member (Chairman Mark Gaston Pearce), and therefore lacks authority to issue any decisions or take any action going forward.

On January 4, 2012, President Obama appointed three members of the NLRB:  (1) Sharon Block, who was appointed to fill a vacancy that had arisen on January 3, 2012; (2) Terence Flynn, who was appointed to fill a vacancy that had arisen on August 27, 2010; and (3) Richard Griffin, who was appointed to fill a vacancy that had arisen on August 27, 2011.  At the time of the purported recess appointments, the Senate was operating pursuant to a unanimous consent agreement, which provided that the Senate would meet in pro forma sessions every three business days from December 20, 2011 through January 23, 2012.  During its January 3, 2012 pro forma session, the Senate acted to convene the second session of the 112th Congress and to fulfill its duty under the Twentieth Amendment to the U.S. Constitution, which provides that "the Congress shall assemble at least once in every year, and such meeting shall begin at noon on the 3d day of January, unless they shall by law appoint a different day."

In general, the U.S. Constitution requires that members of the NLRB (as officers of the United States) must be nominated by the President and appointed "by and with the Advice and Consent of the Senate."  However, the Recess Appointments Clause of the U.S. Constitution 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."

At the time President Obama appointed Members Block, Flynn, and Griffin, Republican Senators complained that the appointments bypassed the Constitutionally mandated Senate confirmation process for Presidential nominees.  In Noel Canning, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit unanimously agreed that the appointments were unconstitutional.

The Court initially determined that the term "the Recess" in the Recess Appointments Clause applies only to recesses that occur in between sessions of Congress -- not to breaks in activity that occur during a session of Congress.  The NLRB conceded during oral argument that the appointments were not made during the intersession recess; instead, they were made on January 4, 2012, one day after Congress began a new session on January 3, 2012.

The Court also found it significant that the Recess Appointments Clause only permits the President to fill vacancies "that may happen during the Recess of the Senate."  The Court interpreted this provision to mean that the vacancy actually must arise during the Senate's intersession recess in order for the President to have the authority to fill a vacancy without going through the Senate confirmation process.  The Court determined that none of the three vacancies that President Obama sought to fill on January 4, 2012 arose "during the Recess of the Senate," and found that the appointments were unconstitutional for this reason as well.

There is no doubt that this decision will be appealed to the U.S. Supreme Court.  We will provide updates on this blog as they become available.