National Labor Relations Board

U.S. District Court Denies Request for Stay of NLRB Posting Requirement Pending Appeal

March 12, 2012

By Subhash Viswanathan

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

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

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

U.S. District Court Upholds NLRB's Notice Posting Rule, But Holds Certain Enforcement Provisions To Be Invalid

March 4, 2012

By Subhash Viswanathan

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

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

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

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

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

February 22, 2012

By Sanjeeve K. DeSoyza

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

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

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

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

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

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

Business Groups and NLRB File Motions for Summary Judgment in Lawsuit Challenging Amendments to Representation Election Procedures

February 12, 2012

By Subhash Viswanathan

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

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

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

NLRB Holds That NLRA Prohibits Class Action Waivers in Mandatory Arbitration Agreements

January 26, 2012

By Erin S. Torcello

Arbitration agreements are a common tool that employers use to manage EEO and wage/hour litigation risk.  Those agreements often include a provision that an employee who wishes to submit an employment-related claim to arbitration may do so only on behalf of himself or herself, and may not do so as part of a class or collective action.  On January 3, 2012, Member Becker's last day on the National Labor Relations Board ("NLRB"), Members Becker and Pearce dealt a blow to employers seeking to create or expand arbitration agreements that employees are required to sign as a condition of employment.  In D.R. Horton, Inc., the NLRB held that mandatory arbitration agreements that include a class action waiver are unlawful under the National Labor Relations Act ("NLRA").

In D.R. Horton, Inc., the employer (a home builder with operations in more than 20 states) instituted a corporate-wide policy that required new and current employees, as a condition of employment, to sign an arbitration agreement.  The agreement required all disputes arising from each employee's employment to be resolved by an arbitrator, rather than in a judicial forum.  The agreement further provided that the arbitrator had no authority to consolidate the claims of other employees, to hear any class or collective action, or to award relief to a class or group of employees.

The charging party, Michael Cuda, was a superintendent with the home building company.  Cuda's attorney notified the company that his firm represented Cuda and a nationwide class of similarly situated employees.  He asserted that the company was misclassifying the superintendents as exempt under the Fair Labor Standards Act ("FLSA") and gave notice that he intended to initiate an arbitration proceeding on behalf of the class of superintendents.  The company responded that such a collective action was prohibited under the arbitration agreement that Cuda and other employees signed.

Cuda then filed an unfair labor practice charge with the NLRB, alleging, among other things, that the arbitration agreement violated Section 8(a)(1) of the NLRA as it prohibited employees from engaging in concerted activity for their mutual aid and protection.

The NLRB agreed with Cuda that the arbitration agreement violated Section 8(a)(1) of the NLRA.  The NLRB held that employees have the right to attempt to improve their working conditions through judicial, administrative, and arbitral proceedings.  The NLRB further held that employees' collective efforts to pursue rights or improve working conditions are "at the core of what Congress intended to protect" in Section 7 of the NLRA.  The Board concluded that, because the arbitration agreement at issue prohibited employees from pursuing class or collective actions in either an arbitral or judicial forum, it violated Section 8(a)(1) of the NLRA.

The company argued that a decision holding its arbitration agreement to be unlawful would conflict with the provisions of the Federal Arbitration Act ("FAA") and the Supreme Court's 2011 decision in AT&T Mobility LLC v. Concepcion.  However, the NLRB rejected these arguments.

The FAA was enacted to prevent courts from treating arbitration agreements less favorably than other private contracts.  The NLRB reasoned that its decision was not in conflict with the FAA because it was treating the arbitration agreement no worse than any other private agreement.  The NLRB stated that it would have reached the same conclusion had the agreement not mentioned arbitration, but required employees to pursue only individual claims -- rather than collective claims -- in a judicial or other type of forum.

In AT&T Mobility, a class action was brought against AT&T by a group of customers who alleged that AT&T's offer of a "free" telephone to anyone who signed up for its service was fraudulent to the extent that AT&T still charged new subscribers sales tax on the retail value of the "free" telephone.  AT&T demanded that each plaintiff's claim be submitted to individual arbitration because its arbitration agreement with its customers barred class actions.  The plaintiffs argued that such a class action waiver was unconscionable under California law.  The Supreme Court rejected the plaintiffs' argument, and held that the class action waiver contained in the arbitration agreement was enforceable.  The NLRB distinguished the Supreme Court's AT&T Mobility decision, principally on the basis that the arbitration agreement at issue in that case involved customers of AT&T rather than employees, and therefore, the issue of whether the arbitration agreement violated the NLRA was not presented.

The D.R. Horton case will likely be appealed to a U.S. Circuit Court of Appeals, and may eventually be heard by the Supreme Court.  However, in the meantime, employers looking to create or expand an arbitration agreement that employees must sign as a condition of employment should be cautious not to prohibit employees from pursuing class or collective actions in an arbitral forum.

Federal Labor Law, the Wage Theft Prevention Act, and Water Cooler Discussions

January 16, 2012

By Tyler T. Hendry

As New York employers should be aware, the first annual notice to employees required by the Wage Theft Prevention Act ("WTPA") must be distributed by February 1, 2012.  Although the requirements of the WTPA have been grabbing recent headlines, this post addresses one unavoidable by-product of the annual notice requirement -- the reality that the distribution of these annual notices is likely to lead to workplace discussions among co-workers regarding wage and salary information.  As a reminder, blanket rules -- whether formal or informal -- prohibiting employees from discussing their pay and benefits with their co-workers are unlawful under the National Labor Relations Act ("NLRA").

The NLRA provides private sector employees the right to engage in protected concerted activity regarding their terms and conditions of employment.  This includes, as a general rule, employees' right to share and discuss information with their co-workers about their wages, benefits, and other working conditions.  This protection extends to both union and non-union workplaces.  Accordingly, employers may not promulgate or enforce any type of policy that prohibits such discussions.  Even a broadly-written confidentiality policy may be found to violate the NLRA if an employee could reasonably view the policy as restricting discussions with co-workers about wages and other working conditions.

Employers should review their policies to ensure that there are no explicit or implicit prohibitions on wage discussions among employees that might be found to violate the NLRA.  In addition, managers should be careful to avoid knee-jerk reactions to hearing such discussions that will inevitably arise from the distribution of the annual WTPA notice to employees.

President Obama Announces Three Recess Appointments to NLRB

January 5, 2012

By Subhash Viswanathan

On January 4, 2012, President Obama announced his intent to make three recess appointments to the National Labor Relations Board (“NLRB”), restoring the quorum that the NLRB had lost a day earlier when Member Becker’s recess appointment expired. The three recess appointees are: (1) Sharon Block, a Democrat who is currently the Deputy Assistant Secretary for Congressional Affairs at the U.S. Department of Labor; (2) Richard Griffin, a Democrat who is currently General Counsel for the International Union of Operating Engineers; and (3) Terence Flynn, a Republican who is currently Chief Counsel to NLRB Member Hayes.

With these recess appointments, the NLRB will once again have a 3-2 Democratic majority. Accordingly, employers can continue to expect NLRB decisions and rule-making efforts that are intended to bolster union organizing efforts, similar to the recent proposed rules requiring employers to post a notice of employee rights under the National Labor Relations Act and amending union representation election procedures.

Republican Senators have complained that these recess appointments bypass the Constitutionally-mandated Senate confirmation process for Presidential nominees. According to a press release issued by Senator Mike Enzi (R-Wyo.), two of the three nominees were presented to the Senate on December 15, 2011, only one day before the Senate adjourned for the year, which provided the Senate with little time to consider and review the nominations.

NLRB Postpones Effective Date of Notice-Posting Requirement

December 23, 2011

By Subhash Viswanathan

The National Labor Relations Board ("Board") announced today that it has agreed to postpone the effective date of its rule requiring employers to post a notice of employee rights under the National Labor Relations Act until April 30, 2012.  This is the second postponement of the effective date of this rule, which was initially scheduled to take effect on November 14, 2011.  After lawsuits were filed against the Board in September challenging the Board's authority to implement the rule, the Board announced in October that it was postponing the effective date of the rule to January 31, 2012.  This most recent postponement to April 30, 2012 comes at the request of the U.S. District Court Judge who recently heard oral arguments with respect to one of those lawsuits.

NLRB Adopts Final Rule Amending Representation Election Procedures

December 22, 2011

By Erin S. Torcello

As anticipated, the National Labor Relations Board ("Board") adopted a final rule amending the procedures applicable to union representation elections, just before losing its quorum when Member Becker's recess appointment expires at the end of this year.  Members Pearce and Becker approved the final rule without the endorsement of Member Hayes.  The final rule will be published in the Federal Register today (December 22, 2011), and will become effective on April 30, 2012.

The amendments to the union representation election procedures, which are summarized in a prior blog post regarding the November 30, 2011 Board resolution to proceed with the drafting of the final rule, are intended to shorten the time period between the filing of a representation petition and the election.

The U.S. Chamber of Commerce and the Coalition for a Democratic Workplace filed a lawsuit on December 20, 2011 in the U.S. District Court for the District of Columbia, challenging the Board's authority to adopt the final rule, and seeking an order enjoining the Board from enforcing the final rule.  We will keep you posted on any significant developments in that litigation.

NLRB Approves Resolution to Move Forward on \"Quickie\" Election Rule

December 8, 2011

By Erin S. Torcello

On Wednesday, November 30, 2011, the three-member National Labor Relations Board ("Board") approved a resolution by a 2 to 1 vote to move forward on a narrowed version of the rule on "quickie" union representation elections proposed in June.

The resolution authorizes the Board to prepare a final rule to be published in the Federal Register containing six elements that were found in the originally proposed rule.  The goal of the scaled down proposal is to decrease the delays that Board Members Pearce and Becker have argued are impediments to unions winning representation elections.  The six elements of the final rule would eliminate pre-election litigation and appeals over a number of issues.  The six amendments to the existing representation election process are summarized below:

  • The first amendment would limit the issues that may be raised at a pre-election representation hearing only to those issues that are relevant to whether a question of representation exists that should be resolved by an election.  In other words, issues pertinent to the scope of the proposed bargaining unit, the supervisory status of certain individuals, and other issues that do not affect whether or not a representation election should be held would only be permitted to be raised after the election.
  • The second amendment would give the hearing officer at a pre-election representation hearing the discretion to determine whether or not post-hearing briefs may be filed.
  • The third amendment would eliminate the right to seek Board review of a Regional Director's pre-election rulings prior to the election, leaving only the possibility of a post-election review of any such rulings that have not been rendered moot by the election.
  • Because pre-election requests for review to the Board would be eliminated, the fourth amendment would end the practice of delaying the scheduling of a representation election for purposes of giving the Board the opportunity to rule on requests for review.
  • The fifth amendment would clarify the standard for seeking special permission to appeal to the Board.
  • The sixth amendment would give the Board full discretion to determine whether or not it will consider requests for review of a Regional Director's or Administrative Law Judge's disposition of post-election objections to the election.

These proposed amendments, while not as broad as those originally proposed in June, will nevertheless have the effect of speeding up the election process.  This will have a significant impact on the manner in which employers react to the filing of a representation petition.

At this point, the Board will draft the language of the final rule, which must then be approved by a majority of the Board.  The Board currently has a quorum of three members, but will be down to two members when Member Becker's recess appointment expires at the end of this year.  It is clear that Members Pearce and Becker will do everything they can to get the final rule drafted and approved before the Board loses its quorum.

NLRB Postpones Implementation of Notice Posting Rule

October 6, 2011

By Erin S. Torcello

Yesterday, the NLRB announced that it is postponing the implementation date of the workplace notice rule that was issued on August 30, 2011. As we previously reported, that rule requires private sector employers to post a notice advising employees of their right to join a union and of their other rights under the National Labor Relations Act. Employers subject to the rule were required to post the notice by November 14, 2011. The implementation date has now been moved back more than two months. Employers are not required to post the notice until January 31, 2012.  The NLRB’s stated reason for the extension is to “allow for enhanced education and outreach to employers, particularly those who operate small and medium sized businesses.”

NLRB Modifies Unit Determination Standard in Non-Acute Health Care Facilities

September 14, 2011

By Erin S. Torcello

In its third significant case in a matter of days, the National Labor Relations Board overruled longstanding precedent and changed the standard for determining what constitutes an appropriate unit for bargaining in non-acute health care facilities. The Board’s decision in Specialty Healthcare and Rehabilitation Center of Mobile, overrules Park Manor Care Center, a decision which stood for 20 years. In Park Manor, the NLRB applied a “pragmatic or empirical community-of-interest” standard for non-acute health care facilities, including nursing homes and rehabilitation centers, which encouraged larger bargaining units to avoid burdening health care facilities with many smaller units which could be represented by multiple unions. Larger units are also generally more difficult for unions to organize.

In Specialty Healthcare, the union petitioned to be certified as the bargaining agent for 53 CNAs. The employer argued that the group of CNAs was not an appropriate unit by themselves, and under Park Manor, the only appropriate unit was one which included all nonprofessional service and maintenance employees. The Board rejected the employer’s argument, finding that the pragmatic community-of-interest approach announced in Park Manor was obsolete, and that the traditional “community-of-interest” unit determination standard must be applied to non-acute health care facilities. Under the traditional community-of-interest standard, the Board considers whether the relevant groups of employees: 

  1. are organized into separate departments; 
  2. have distinct skills and training; 
  3. have distinct job functions and perform distinct work; 
  4. are functionally integrated; 
  5. have frequent contact with each other;
  6. are interchanged with each other; 
  7.  have distinct terms and conditions of employment; and 
  8. are separately supervised.

The Board went on to hold that if an employer asserts that a group of employees must be included in the petitioned-for a unit, the employer has the burden to show that there is an overwhelming community-of-interest that would justify enlarging the petitioned-for unit.

The implications of the decision are significant because unions will now be able to isolate particular job classifications and organize facilities on a piecemeal basis, increasing the likelihood of a successful organizing campaign and reducing the amount of resources necessary to successfully organize. The case also increases the probability that multiple units with different unions will be certified in a single facility.