National Labor Relations Board

The NLRB Reverses 50 Year-Old Precedent and Holds That Dues Checkoff Provisions Survive the Expiration of a Collective Bargaining Agreement

December 20, 2012

By Subhash Viswanathan

The National Labor Relations Board ("NLRB") recently re-examined the issue of whether an employer's obligation to check off union dues from employees' wages terminates upon the expiration of a collective bargaining agreement that contains a dues checkoff provision.  This issue was seemingly resolved more than 50 years ago, in the NLRB's Bethlehem Steel decision.  However, on December 12, 2012, in its WKYC-TV, Inc. decision, the NLRB reversed its 50 year-old precedent and held that an employer's obligation to check off union dues continues after the expiration of a collective bargaining agreement that establishes such an arrangement.

In its 1962 Bethlehem Steel decision, the NLRB considered the issue of whether the employer had violated its obligation to negotiate in good faith by unilaterally refusing to honor the union security clause and the union dues checkoff provisions contained in an expired collective bargaining agreement.  Although the NLRB found that both union security and dues checkoff provisions are mandatory subjects of bargaining, the NLRB held in Bethlehem Steel that the employer did not violate the National Labor Relations Act ("NLRA") by unilaterally refusing to honor the union security clause and discontinuing union dues deductions from employees' pay checks.  The NLRB determined that the language of Section 8(a)(3) of the NLRA, which permits employers and unions to make an "agreement" to require union membership as a condition of employment, means that parties cannot enforce a union security provision after the collective bargaining agreement containing such a provision has expired.  The NLRB further reasoned that dues checkoff provisions are intended to implement union security clauses, and that an employer's obligation to continue deducting union dues from employees' pay checks ceases upon the expiration of the collective bargaining agreement.

According to the three NLRB members who comprised the majority in the WKYC-TV decision, the reasoning contained in the Bethlehem Steel decision is flawed.  The three-member majority disagreed with the premise that dues checkoff provisions are intended to implement union security clauses, and stated that "union-security and dues-checkoff arrangements can, and often do, exist independently of one another."  The three-member majority also found that employees cannot be required to authorize union dues deductions as a condition of employment even if the collective bargaining agreement contains a union security clause that requires them to be a member of the union.  Although employees generally choose to sign authorizations allowing the dues deductions as a matter of convenience, employees retain the option of transmitting their union dues directly to the union instead of consenting to automatic deductions.  The three-member majority observed that employees who sign dues checkoff authorizations are free to revoke those authorizations upon the expiration of the collective bargaining agreement if they no longer wish to continue those automatic deductions.

For these reasons, the three-member majority reversed the Bethlehem Steel decision and held that employers are required to honor dues checkoff provisions in an expired collective bargaining agreement until the parties have reached a new agreement or until a valid impasse has been reached that permits unilateral action by the employer.  This new rule will only be applied prospectively, and will not be applied to any pending cases.

Not surprisingly, Member Hayes wrote a strong dissenting opinion.  Member Hayes found no adequate justification for the NLRB to abandon more than 50 years of precedent.  Member Hayes stated that a union security clause operates as a powerful inducement for employees to authorize union dues deductions, and "it is unreasonable to think that employees generally would wish to continue having dues deducted from their pay once their employment no longer depends on it."  Member Hayes also responded to the majority's view that employees can simply revoke their authorizations, stating that "it is unlikely that employees will recall the revocation language in their authorizations, and less likely still that they will understand that their obligation to pay dues as a condition of employment terminated as a matter of law once the contract expired."  Member Hayes also recognized that an employer's ability to cease collecting union dues from employees upon the expiration of a collective bargaining agreement is "a legitimate economic weapon in bargaining for a successor agreement" and accused the three-member majority of deliberately stripping employers of this weapon to provide more leverage to unions in negotiating for successor agreements.

It is not clear at this point whether the NLRB's WKYC-TV decision will be appealed.

NLRB Provides Guidance Regarding Its Position On Employment-At-Will Policies

November 9, 2012

Earlier this year, many employers were left scratching their heads after a National Labor Relations Board Administrative Law Judge ruled, in American Red Cross Arizona Blood Services Region, that an employer’s handbook acknowledgment, requiring employees to affirm the at-will nature of their employment, violated the National Labor Relations Act.  The language that was found to be unlawful in Red Cross stated:

I further agree that the at-will employment relationship cannot be amended, modified or altered in any way.

The ALJ reasoned that this language required employees to waive their Section 7 rights to engage in protected concerted activity, because by agreeing that their at-will status could never change, they were essentially foregoing their right to make efforts or engage in conduct that could result in union representation and in a collective bargaining agreement.  This waiver, according to the ALJ, would have a chilling effect on employees’ rights, and was therefore unlawful.

The confusion and concern among employers continued, as the Board continued to file and process complaints against employers for employment-at-will policies that appeared to contain the most routine at-will language.  For example, in late February, another Board complaint challenged the following language:

I acknowledge that no oral or written statements or representations regarding my employment can alter my at-will employment status, except for a written statement signed by me and either [the Company’s] Executive Vice-President/Chief Operating Officer or [the Company’s] President.

The complaint challenging this language was settled before the Board issued a decision, providing employers no guidance as to whether it was time to revise their handbooks.  Thankfully, the Board has now provided some further guidance, and it appears they have tempered their position.  This “treat,” issued on Halloween, came in the form of two Advice Memoranda (Case 32-CA-086799 and Case 28-CA-084365) issued by the Board’s Division of Advice taking the position that language similar to that above is lawful.  For example, the following language was found acceptable:

No manager, supervisor, or employee of [the Company] has any authority to enter into an agreement for employment for any specified period of time or to make an agreement for employment other than at-will.  Only the president of the Company has the authority to make any such agreement and then only in writing.

The memorandum explains that this language is lawful because it is not as absolute as the language in the Red Cross case.  It explicitly permits the president to enter into written employment agreements, thus providing for the possibility of potential modification of the at-will relationship through a collective bargaining agreement.  Additionally, the language is not written in a way that requires employees to waive their rights.

For now, employers should consider reviewing the at-will language in their employee handbooks.  Language that simply describes the at-will status of employees, and states that it can only be altered in writing by an executive should not cause concern for now.  However, if the at-will language is written in more absolute terms, providing that the at-will relationship can never be changed under any circumstances, it may be time to revise that policy.  However, as warned by the Board’s General Counsel at the close of both Advice Memoranda, “the law in this area remains unsettled.”  We will continue to provide updates on this blog as this issue develops.

NLRB Holds That Employer Committed an Unfair Labor Practice by Failing to Respond in a Timely Manner to Union's Irrelevant Information Request

November 5, 2012

By Subhash Viswanathan

On October 23, 2012, the National Labor Relations Board held, in a 2-1 decision, that an employer has an obligation under the National Labor Relations Act to respond in a timely manner to a union information request, even if the requested information is ultimately found to be irrelevant to the union's performance of its duties as the employees' collective bargaining representative.

In IronTiger Logistics, Inc., the employer was a unionized trucking company that shared common ownership with another non-union trucking company called, Inc.  The union representing IronTiger's employees made a written request to IronTiger that principally sought information regarding the non-union truck drivers employed by TruckMovers.  The information request also sought some information relating to bargaining unit employees, such as the names of the truck drivers for each unit, their destination and mileage, and communications from customers about those units.

IronTiger did not respond to the union's information request until approximately four and a half months later -- after the union had filed an unfair labor practice charge over IronTiger's failure to provide a response to the information request.  In its response, IronTiger did not provide any of the requested information, but instead stated its belief that all of the requested information was irrelevant.

The Administrative Law Judge who presided over the unfair labor practice hearing agreed with IronTiger that the information requested by the union was irrelevant to the union's performance of its duties as the employees' collective bargaining representative.  In addition, there was no dispute regarding the adequacy of IronTiger's response explaining why the requested information was irrelevant.  However, the ALJ nevertheless held that IronTiger's failure to respond in some manner to the irrelevant information request for approximately four and a half months constituted a refusal to bargain in good faith in violation of Section 8(a)(5) of the Act.

The two-member majority of the Board agreed with the ALJ's analysis, and held that employers have an obligation under the Act to respond within a reasonable time to union information requests, regardless of whether those requests are deemed to be irrelevant.  Member Hayes wrote a dissenting opinion, in which he reasoned:  "Ultimately, requested information is either legally relevant to a union's representative duties, or it is not.  If it is not relevant, then the statutory duty to bargain in good faith is not implicated by the request or the employer's failure to respond timely to the request."

Based on the Board's IronTiger decision, employers should make sure to respond within a reasonable time in some manner to all information requests made by a union representing their employees, even if the response is just a brief explanation of the employer's position that the requested information is irrelevant.  If an employer believes that a union information request is overly broad or unduly burdensome, the employer should make a good faith effort to work with the union to narrow the scope of the request.

NLRB Holds That Employer's Discharge of Employee for Facebook Postings Was Lawful, But Finds Employer's "Courtesy" Rule Unlawful

October 3, 2012

By Colin M. Leonard

On September 28, 2012, the National Labor Relations Board handed down its first decision regarding whether an employee’s termination in connection with his postings on Facebook was unlawful.  In its decision, however, the Board dodged the more thorny aspect of the case, which was whether other Facebook postings of the employee that were openly critical of the employer were protected under the Act.

The Board concluded that the employee, a salesman at a BMW dealership, was terminated for posting pictures on Facebook of an unfortunate incident at an adjoining Land Rover dealership, which was also owned by the same employer.  The incident depicted in the employee’s photos was of a Land Rover that had been driven into a pond by a customer’s teenage son and included the caption:  “This is your car.  This is your car on drugs.”  He also wrote on his Facebook page:

This is what happens when a sales Person sitting in the front passenger seat (Former Sales Person, actually) allows a 13 year old boy to get behind the wheel of a 6000 lb. truck built and designed to pretty much drive over anything.  The kid drives over his father’s foot and into the pond in all about 4 seconds and destroys a $50,000 truck.  OOOPS!

The Board, affirming the ALJ, concluded that there was nothing protected or concerted about these posts by the employee because they did not concern any terms or conditions of employment and they were posted solely by the employee, apparently as a “lark.”

The Board did not consider whether more controversial postings by the employee on his Facebook page were protected, concerted activity under the Act.  Those postings were critical of the employer’s “Ultimate Driving Event” at the BMW dealership.  Specifically, the employee criticized the low budget food and drink offerings provided to customers -- the 8 oz. bag of chips, the $2.00 cookie plate from Sam’s Club and the hot dog cart where a customer “could attain a over cooked wiener and a stale bunn [sic],” among other criticisms.  Because the Board agreed with the ALJ that the employee had been fired exclusively for the Land Rover postings, which were clearly unprotected, the Board found it unnecessary to determine whether the employee’s other postings were protected.

However, two members of the Board (with Member Hayes dissenting) concluded that the following policy of the employer was unlawful:

Courtesy:  Courtesy is the responsibility of every employee.  Everyone is expected to be courteous, polite and friendly to our customers, vendors and suppliers, as well as to their fellow employees.  No one should be disrespectful or use profanity or any other language which injures the image or reputation of the Dealership.

Specifically, the Board found the broad prohibitions of the rule on “disrespectful” conduct and use of “language which injures the image or reputation of the Dealership” implicated protected Section 7 activities, including complaining about working conditions and seeking the support of others in improving them.  The Board noted that there was nothing else in the rule -- or the employee handbook generally -- to suggest that conduct protected by Section 7 of the Act is excluded from the Courtesy rule.  The two-member majority rejected the argument advanced by dissenting member Hayes that the words contained in the rule must not be read “in isolation,” and that the first two sentences inform employees that the rule is intended simply to promote civility in the workplace.

NLRB Administrative Law Judge Invalidates EchoStar's Social Media Policy

October 2, 2012

By Sanjeeve K. DeSoyza

Just two weeks after the National Labor Relations Board’s first decision regarding the lawfulness of an employer’s social media policy, another employer received an adverse decision on its social media policy, this time by a Board administrative law judge.  On September 20, 2012, ALJ Clifford Anderson ruled that EchoStar Technologies’ social media policy chilled employees’ Section 7 rights and thus violated Section 8(a)(1) of the National Labor Relations Act.

The challenged portions of the policy (i) prohibited employees from “mak[ing] disparaging or defamatory comments about EchoStar, its employees, officers, directors, vendors, customers, partners, affiliates, or our or their products/services”; and (ii) further prohibited employees’ participation in personal social media activities “with EchoStar resources and/or on Company time” without company authorization.

Applying the test set forth in Lutheran Heritage Village-Livonia, the judge preliminarily found that the EchoStar policy did not explicitly restrict Section 7 activity and noted the absence of a claim that the policy was promulgated in response to union activity or that it had been applied to restrict the exercise of Section 7 rights.  He found, however, that the term “disparaging” was impermissibly overbroad and would be read by a reasonable employee to intrude on and chill the employee’s right to engage in activities protected by Section 7 of the Act.

ALJ Anderson further rejected EchoStar’s argument that a “savings clause” salvaged the rule.  The clause advised employees to contact Human Resources if they had questions regarding the handbook and further stated that if a conflict arose between an EchoStar policy and the law, the appropriate law would govern and the policy would be conformed in accordance with that law.  Noting that the clause appeared in the introductory sections of the handbook, several pages before the social media policy, the ALJ found that a general admonition to contact Human Resources does not create a “legal loop” that an employee must jump through before the rule may be challenged.  He further found that a boilerplate clause that a document’s provisions be applied and interpreted in a legally permissible manner does not save an otherwise invalid rule under the Act.  Without any analysis, the ALJ also found that the rule prohibiting employees from using personal social media with company resources and/or on company time also violated the Act.

Additionally, ALJ Anderson invalidated several other handbook policies (or portions thereof), including policies regarding “contact with the media” and “contact with government agencies," the “investigations” policy insofar as it required that employees “maintain confidentiality” during internal company investigations, and the portion of the “disciplinary actions” policy defining “insubordination” to include “undermining the Company, management or employees.”  In each instance, the ALJ found the challenged language to be overbroad and likely to induce a reasonable employee to conclude that it encompassed, and thereby prohibited, protected Section 7 activity.

Similar to the Board in Costco, ALJ Anderson appears to have closely tracked the reasoning of Acting General Counsel Lafe Solomon, as set forth in Mr. Solomon's three Operations Memos issued during the past 14 months.  That said, the Board’s analysis of social media policies remains in its infancy and little specific guidance on permissible policy language is currently available.  Until further decisions and guidance are issued, employers should continue to consult with counsel in crafting their social media policies, with an eye toward (i) avoiding broad, vague prohibitions; (ii) including specific examples of prohibited conduct; and (iii) inserting appropriate disclaimers within the policy itself.

The NLRB Issues Its First Ruling Impacting Employers' Social Media Policies

September 24, 2012

By Sanjeeve K. DeSoyza

On September 7, the National Labor Relations Board (“Board”) issued its first decision on the lawfulness of an employer’s social media policy under the National Labor Relations Act (“NLRA”).  We have previously reported on three non-binding reports issued by the Board’s Acting General Counsel (“GC”) since August 2011, outlining his views of impermissibly restrictive social media rules.  In Costco Wholesale Corp., the Board has indicated that it may take an approach similar to the GC in scrutinizing employer efforts to control employees’ online speech.

The Costco policy prohibited employees from electronically posting communications that “damage the Company, defame any individual or damage any person’s reputation, or violate the policies outlined in the Costco Employee Agreement.”  Reversing the administrative law judge’s ruling, a three-member Board panel held that this rule was overly broad in violation of Section 8(a)(1) of the NLRA.  In reaching this conclusion, the Board found that the wording of the policy “clearly encompasse[d] concerted communications” protesting Costco’s treatment of its employees.  The Board further found that in the absence of any accompanying language that “even arguably suggests that protected communications are excluded from the broad parameters of the rule,” employees would reasonably assume the policy prohibited them from engaging in communications critical of Costco or its agents.  Costco was ordered to rescind the policy insofar as it prohibited employees from making on-line statements damaging to the company’s or any person’s reputation.

Costco’s policy also provided that “sensitive information such as . . . payroll . . . information may not be shared, transmitted or stored for personal or public use without prior management approval.”  The provision was deemed unlawful, because the Board determined that employees would reasonably conclude that it prohibited them from discussing their wages and other terms and conditions of employment.  Costco’s argument that the rule should be read to prohibit only the sharing of the “confidential business component of payroll, such as budgeted payroll and expenses and the like” was rejected.  Although the rule also prohibited disclosure of items unrelated to terms and conditions of employment, such as social security and credit card numbers, when read in the context of the entire document, the Board believed that term “payroll information” would reasonably be construed by employees to prohibit protected activity under Section 7 of the NLRA, such as discussing their compensation.

However, that portion of the Costco policy that required employees to use “appropriate business decorum” in communications with others was found to be lawful.  The administrative law judge (affirmed by the Board) agreed that an employer may lawfully establish rules providing for a civil workplace.  The GC’s contention, that the rule could be interpreted by employees as restricting Section 7 activities, was rejected.  Rather, the Board held that the applicable legal standard is whether the rule in question would be construed by employees to restrict Section 7 activity.

Additional cases involving social media issues are likely to be decided by the Board over the next several months.  Until further decisions and guidance are issued, employers should consult with legal counsel in crafting their policies.  Employers would also be well-advised to avoid broad, vague restrictions (e.g., “non-disparagement”) and restrictions that plainly impinge on protected speech (e.g, “no discussion of wages”).  Employers should also include specific examples of prohibited conduct and a “savings clause” or other disclaimer language making clear that the policy is not intended to restrict Section 7 rights.

Confidentiality Instructions Under Attack by the NLRB and EEOC

September 19, 2012

By Jessica C. Moller

As previously reported in this blog, on July 30, 2012, in the Banner Health System case, the National Labor Relations Board (“Board”), issued a 2-to-1 decision holding 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.

Shortly after the Board issued that decision, the Buffalo, NY regional office of the United States Equal Employment Opportunity Commission (“EEOC”) took a similar position that a confidentiality instruction to an employee making a complaint of discrimination would, in that office’s view, constitute unlawful interference with the complaining employee’s efforts to oppose discrimination.

According to the EEOC's Buffalo office:

EEOC guidance states that complaining to anyone, including high management, union officials, other employees, newspapers, etc. about discrimination is protected opposition.  It also states that the most flagrant infringement of the rights that are conferred on an individual by Title VII’s retaliation provisions is the denial of the right to oppose discrimination.  So, discussing one’s complaints of sexual harassment with others is protected opposition.  An employer who tries to stop an employee from talking with others about alleged discrimination is violating Title VII rights, and the violation is “flagrant” not trivial.

Although this position taken by the Buffalo office has not officially been adopted by the EEOC as a whole, the fact that two federal authorities are attacking the validity of confidentiality instructions is cause for concern.  At a minimum, employers should take a step back and review their investigatory process to ensure that no undue restraint is being placed on employees.  We offer the following practical pointers employers should keep in mind in conducting this review:

  • Preserving the integrity of an investigation by keeping harassment/discrimination complaints confidential is a laudable objective.  However, official EEOC guidance requires that employers maintain the confidentiality harassment/discrimination complaints to the extent possible.  Employers are not required or expected to, nor can they, guarantee that harassment/discrimination complaints will be kept strictly confidential.  The Board’s Banner Health System decision also states that a generalized desire to protect the integrity of an investigation will not justify a general policy that matters be kept confidential.
  • It does not matter whether employees are unrepresented or unionized in determining whether their rights under the NLRA have been violated.  Regardless of whether covered employees are represented by a union, they are protected by the NLRA.  However, supervisors are not considered covered employees under the NLRA and therefore supervisors are not entitled to its protections.  Consequently, notwithstanding the Board’s Banner Health System decision, an employer could request a supervisor, as opposed to a non-supervisory employee, not to discuss matters with co-workers without fear of violating Section 8(a)(1).
  • Consider only “asking” an employee to keep things confidential or “suggesting” the employee be “discreet” about the “sensitive issue,” rather than “instructing,” “ordering,” or “directing” an employee to maintain confidentiality.  Explain to the employee the benefits of confidentiality and how the employer does not want any information leaked that could potentially hinder its ability to complete a thorough investigation or to gather accurate, untainted evidence.  Confidentiality could also be suggested to the employee without an express directive by mentioning the “sensitive” nature of the matter and how he/she would not want allegations made against him/her to be publicly discussed.  By ultimately leaving some choice with the employee, the employer should still be able to argue it did not violate the employee’s rights under the NLRA or interfere with the employee’s Title VII rights to oppose discrimination.
  • Employers should analyze each case on an individual basis before asking an employee not to discuss the matter with co-workers, specifically taking into account the factors enumerated by the Board in Banner Health System:  (1) Are there witnesses in need of protection? (2) Is evidence in danger of being destroyed? (3) Is testimony in danger of being fabricated? and (4) Is there a risk of a cover-up?  Although Banner Health System involved a “request,” not a directive, that the employee maintain confidentiality, the Board did not take issue with the request itself but rather with the employer’s blanket practice of requesting confidentiality of all employees without making an individualized assessment as to whether a request was appropriate in any given case.  The Board ultimately viewed this blanket practice as effectively prohibiting any discussion of investigations amongst employees and therefore violative of Section 8(a)(1).  Blanket requests or instructions to maintain confidentiality in all, or virtually all, investigations will likely not be upheld.
  • Employers should also consider other intangible factors, such as whether the individual is likely not to discuss the matter on his/her own accord even without any request from the employer to keep it confidential.  If the employee would likely maintain confidentiality without any direction from the employer, why risk potential liability by issuing a request?
  • If a decision is ultimately made to issue a confidentiality instruction or directive, notwithstanding the potential risk of liability in doing so, all of the reasons underlying this decision should be clearly and promptly documented, in writing, in case the decision is ever challenged in the future.
  • Once the investigation is complete, consider affirmatively lifting any confidentiality instruction that was issued. Doing so could potentially limit the time period for which an employer could be held liable for the confidentiality instruction if it is ultimately held unlawful.

U.S. Court of Appeals for the D.C. Circuit Refuses to Enforce National Labor Relations Board Decision and Order Regarding Unilateral Changes

July 11, 2012

By David E. Prager

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.

NLRB's Acting General Counsel Issues Third Report on Social Media Cases

June 4, 2012

By Erin S. Torcello

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.

U.S. District Court Invalidates "Quickie" Election Rule

May 14, 2012

By Tyler T. Hendry

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.

D.C. Circuit Court of Appeals Grants Injunction Precluding Implementation of NLRB Notice Posting Rule

April 17, 2012

By Subhash Viswanathan

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.

U.S. District Court for the District of South Carolina Holds That NLRB Notice Posting Rule Is Invalid

April 14, 2012

By Subhash Viswanathan

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.