Court Rejects Employer’s Attempt at Two-Bites at the Same Apple When Challenging ULP

Last week, the Sixth Circuit rejected the attempt of a government contractor to avoid an unfair labor practice charge by claiming that it was a joint employer entitled to the benefit of the NLRA exemption for the federal government.  Bannum Place of Saginaw LLC, v. NLRB, No. 21-2664 (6th Cir. 7-14-22).   The employer first raised the argument -- that the federal Bureau of Prisons so regulated its operations under their service contract that the employer constituted a joint employer with the federal government – when the union sought recognition.  However, the employer failed to appeal the Regional Director’s decision rejecting the argument and the NLRB refused to entertain – or relitigate -- the issue when the same employer was then subject to an ULP Charge arising out of that same, or related, election. 29 C.F.R. § 102.67(g).  The Court agreed that courts will defer to the NLRB’s refusal to relitigate legal issues which the party could have but failed to appeal to the Board during the representation phase.  In any event, “because Congress has unambiguously limited the reach of the exemption in § 2(2) to governmental entities and wholly owned government corporations, this court will not extend the exemption to government contractors.”

The Court observed that the no-re-litigation rule only applies when the second proceeding is related to the representation issue when the argument was first raised and then not appealed.  However, the employer could not successfully argue that this ULP was unrelated to the earlier representation proceeding for the first time on appeal because the employer failed to raise the unrelatedness argument before in the underlying ULP proceeding.   The Court will only consider arguments that had first been made to the NLRB.

The employer also failed to point to any new circumstances that could have justified re-litigation of the issue during the ULP phase.

The employer then argued that its joint employer argument went to the NLRB’s statutory jurisdiction and could not be waived.   However, the Court found that this argument would likewise fail because the NLRA did not address joint employment and only exempted certain types of employers, including the federal government.  The Supreme Court had earlier rejected a similar argument by a hospital which claimed its lease with a state government made it a government subdivision.  Other circuit courts had likewise rejected arguments to expand the reach of the limited exemptions:

As the Tenth Circuit held, “because Congress has unambiguously limited the reach of the exemption in § 2(2) to governmental entities and wholly owned government corporations, this court will not extend the exemption to government contractors.”

. . .

In sum, even if Bannum’s contract vests in the BOP substantial control over Bannum’s daily operations, that does not transform the company from a covered employer into either a governmental entity or a wholly owned government corporation and thus beyond the Board’s reach.

 

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

NLRB's New General Counsel Rescinds Predecessor's Guidance on Employee Handbooks as Simply Unnecessary.

As expected, the NLRB’s new General Counsel has begun rolling back some of the initiatives pursued by his predecessor.   On Monday, he issued a Memorandum rescinding a number of his predecessor’s initial actions as being inconsistent with the promotion of collective bargaining and protection of employee rights, or as being unnecessary.  Of interest to most employers, he rescinded one of his predecessor’s earliest actions --  a Memorandum explaining how the NLRA applies to employee handbooks.  However, instead of describing this as inconsistent with the NLRA, the NLRB’s General Counsel explained that this Memorandum was simply no longer necessary in light of the number of NLRB decisions since December 2017 that have explained and applied the Boeing decision.  The introductory explanation for this action is stated as follows:

Section 1 of the Act makes clear that the policy of the United States is to encourage the practice and procedure of collective bargaining and to protect the exercise by workers of their full freedom of association, self-organization, and designation of representatives of their own choosing for the purpose of negotiating the terms and conditions of their employment. As a career employee of the NLRB, I have endeavored to effectuate this policy. As Acting General Counsel, I will continue to work to realize the Act’s purpose.

I have determined that a number of outstanding General Counsel Memoranda are either inconsistent with the above-described policies and/or Board law, or are no longer necessary. Accordingly, I am rescinding the following General Counsel Memoranda:

· GC 18-04, Guidance on Handbook Rules Post-Boeing (June 6, 2018) (instructing Regions on the placement of various types of employer rules into the three categories set out in the then-recent Board decision in The Boeing Company, 365 NLRB No. 154 (Dec. 14, 2017)). Note that this Memorandum is being rescinded as it is no longer necessary, given the number of Board cases interpreting Boeing that have since issued.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Children’s Business Does Not Rise Like a Phoenix to Avoid ERISA Withdrawal Liability of Parents’ Business

In March, the Sixth Circuit applied the NLRA’s alter ego test to determine that the similar business of adult children was the alter ego of the parents’ business for purposes of imposing ERISA pension plan withdrawal liability. Trustees of Operating Engineers Local 324 Pension Fund v. Bourdow Contracting, Inc., No. 18-1491 (6^th Cir. 3-21-19).  The defendant company waived its objection to the application of the NLRA standard because it argued in favor of that standard to the trial court.  


Moreover, according to the Court’s opinion, the facts showed that the two businesses shared common management and ownership, although the parents were not owners or managers of the new business and had been the majority owners of the bankrupt business.  The new business was formed just days after the parent’s company missed their first withdrawal payment and bid for their first job days before the parent’s company filed for bankruptcy.  90% of the new business operations overlapped with 50% of the parents’ company business.  Although the new business operated out of a new location, it retained over 50% of the former employees and hired the same outside advisers.   The new company purchased all new equipment because the parents’ equipment was sold in bankruptcy. Almost 70% of the customers of the new company had been customers of the bankrupt company.   The owners of the new company were involved in preparing the bankruptcy petition of their parents’ company and used the family name in their business name in order to capitalize on the good will created by their parents’ business.   Because more factors weighed in favor of liability than against, the Court affirmed alter ego liability being imposed.   The Court also rejected a res judicata defense based on the discharge in bankruptcy of the parent company’s withdrawal liability because there was not an overlap in the cause of action.  The operative facts of the alter ego theory were not the same claim  for withdrawal liability asserted in the bankruptcy proceeding.


NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Sixth Circuit Avoids Noel-Canning Challenge and Finds RN Charge Nurses are Supervisors When They Issue Progressive Written Warnings.

Yesterday, a divided Sixth Circuit Court of Appeals reversed a finding of the NLRB Regional Director and concluded that registered nurses employed as charge nurses by a nursing home employer were statutory supervisors and not entitled to bargain with the employer under the NLRA.   GGNSC Springfield LLC v. NLRB, No. 12-1529 (6^th Cir. 6-2-13).  The Court side-stepped considering a belated Noel-Canning challenge to the Board’s jurisdiction because it was not raised until after briefing had been completed on the substantive issues, because it was not a jurisdictional challenge which the Court was compelled to consider even when it was not raised below, and because it decided to resolve the case on non-constitutional grounds in favor of the employer.  Instead, it found that the RNs exercised independent judgment in issuing disciplinary written warnings under the employer’s progressive disciplinary policy.  This evidence was sufficient to show that they were statutory supervisors.

Two charge nurses were responsible for overseeing 2-6 certified nursing assistants on each shift and reported disciplinary matters to the Director of Nursing.  The 12 RNs were organized by the IAM and petitioned for collective bargaining.  The Regional Director found they were not supervisors and the Board ordered the employer to bargain.  When the employer refused to bargain, the Court was petitioned for review and cross-petitioned for enforcement.

Under the NLRA, only employees have the right to bargaining collectively.  This does not include supervisors, which are defined as: any individual having authority, in the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibly to direct them, or to adjust their grievances, or effectively to recommend such action, if in connection with the foregoing the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment.

Under NLRB v. Kentucky River Cmty. Care, Inc., 532 U.S. 706, 712–13 (2001), “individuals are supervisors if (1) they hold the authority to engage in any one of the twelve listed supervisory functions, (2) their “exercise of such authority is not of a

merely routine or clerical nature, but requires the use of independent judgment,” and (3) their authority is held “in the interest of the employer.”

 The employer argued that its RNs are supervisors because they have authority to discipline, assign, and responsibly direct CNAs, all by using independent judgment.

The Regional Director found that the RNs did not have authority to discipline, other than sending CNAs home for the rest of their shift for egregious violations and flagrant misconduct.  This, by itself, does not constitute independent judgment or establish supervisory authority.  Moreover, when confronted with a disciplinary infraction, RNs could ignore it, provide verbal counseling or draw up a written memorandum.  However, a verbal counseling is educational, and not disciplinary in nature.  Therefore, issuing verbal warnings does not show that RNs are exercising disciplinary authority.

 Nonetheless, the evidence established that the RNs exercised more authority than this because, as mentioned, they had the authority to issue the CNAs written memoranda --- which automatically lead to written warnings by the Director of Nursing under the progressive disciplinary policy.  The receipt of four written warnings in 12 months leads to termination. The RNs sometimes sign on the line for “supervisor.”

 

Receipt of an employee memorandum leads automatically to a written warning, which is a “step” in the Center’s system of progressive discipline. Therefore, the authority that RNs have to issue memoranda to CNAs is the authority to discipline. And because RNs exercise independent judgment in choosing whether to issue a memoranda or provide verbal counseling, they are supervisors under the Act. The Board’s failure to acknowledge that receipt of a written warning is itself discipline renders its contrary determination unsupported by substantial evidence.

That the RNs do not complete the entire form,  have no access to the employee’s disciplinary file to determine at what step the employee is in the disciplinary process or the number or type of prior disciplinary infractions and do not have the authority to suspend or terminate the employee does not affect their supervisory status.  The statute discusses the ability to suspend, discharge or discipline an employee.  An individual can be a supervisor if that person has the authority to discipline, but not the authority to suspend or discharge.

Equating the term discipline with the terms suspend or discharge would render it superfluous, a reading we must try to avoid.

The warnings also constitute disciplinary action because they are not second-guessed or investigation after issuance, unless it is the fourth and final warning in the disciplinary process.

Finally, the RNs showed independent judgment in issuing disciplinary action because, as already discussed, they had discretion to do nothing, give a verbal/educational warning or issue a written warning.  They are not required and usually do not consult with their supervisor before issuing a written warning. That they sometimes receive feedback is indicative that they usually do not receive any suggestions from their superiors.

 NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

NLRB Suggests Employee Handbook Language Concerning Confidentiality of Workplace Investigation

Faithful readers may recall that last August, the NRLB found that an employer violated §7 of the NLRA by directing employee-witnesses to maintain the confidentiality of their interviews during the pendency of a workplace investigation.   Then, at the end of January, the NLRB issued an “Advice Memorandum” concerning Verso Paper which found that an employer’s employee handbook provision was unlawful under the NLRA, but suggested revisions which would bring it into compliance.  (Rumor has it that the Memorandum may have been issued in January, but was not published until recently).    The Memorandum was issued by the NLRB’s Division of Advice (which advises the Board’s regional offices about proceeding with administrative proceedings and whose opinion does not carry as much weight as a Board or court decision).  The Division found the last two sentences of the following employee handbook to be overbroad: 

 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.

The Division found this “blanket rule” did not demonstrate a particularized need for confidentiality on a case-by-case basis as required by the NLRB.   Accordingly, the Division recommended that the regional office proceed to issue a complaint against the employer unless the parties were able to settle the dispute.  Nonetheless, the Division also concluded that the employee handbook policy could be lawful if the employer revised it to replace the last two sentences with the following language:

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.  

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

NLRB Was Busy at End of 2012

In the last quarter of 2012, the NLRB issued several significant decisions which will affect both union and non-union employers in the future.  Three decisions in particular are worth noting.  In one, a non-union, non-profit employer was found to have violated the NLRA for discharging five employees for critical statements made on Facebook about a co-worker in violation of the employer’s zero-tolerance anti-bullying policy.  In another, the Board concluded that an employer is no longer always entitled to withhold from a union witness statements gathered during a workplace investigation that leads to the termination of an employee.  Finally, the Board held that employers with a newly certified union that have not yet reached a collective bargaining agreement generally may not unilaterally demote, suspend or discharge employees without first bargaining with the union.

Non-Union Employer Terminating Employees For Criticizing Co-Worker on Facebook.  In Hispanics United of Buffalo, the non-profit, non-union employer terminated five employees under the agency’s EEO non-retaliation/anti-harassment policy for criticizing a co-worker who was critical of their client service.   One of the terminated employees knew that the co-worker intended to express her concerns to the Executive Director and, while home on Saturday, asked her Facebook co-worker friends what they thought of this criticism.  Five off-duty employees responded by objecting to any criticism of their own performance.  The criticized co-worker also responded about the “lies” and reported to the Executive Director the following Monday that the Facebook postings had upset her enough to give her a heart attack.  Following an investigation – which included reviewing copies of the postings – five of the six employees involved were terminated under the agency’s “zero tolerance” for bullying and harassment under the EEO policy.  (The Director’s secretary was not discharged even though she also participated).   The Board’s majority found the Facebook criticisms of the co-worker constituted protected concerted activity and could not be the basis of disciplinary action.   The Board rejected the employer’s argument that the Facebook criticisms constituted bullying and harassment: “legitimate managerial concerns to prevent harassment do not justify policies that discourage the free exercise of Section 7 rights by subjecting employees to . . . discipline on the basis of the subjective reactions of others to their protected activity.”

Confidentiality of Written Witness Statements Collected During Workplace Investigations.  Since 1978, the NLRB has ruled that employers do not need to provide to a union witness statements gathered during a workplace investigation of employee misconduct (because the NLRB does not itself provide copies of witness statements prior to hearings).  However, on December 15, 2012, the NLRB overruled that decision in American Baptist Homes of the West d/b/a Piedmont Gardens.  The issues in American Baptist Homes concerned whether the employer “violated Section 8(a)(5) and (1) of the National Labor Relations Act by failing to provide the Union with the names, job titles, and/or written statements of three individuals who claimed that they witnessed” a nurse sleeping on duty that resulted in the nurse’s termination.  Two of the nurse witnesses submitted their written statements to HR with assurances of confidentiality, but the third nurse slipped her statement under the HR door with only the assumption of confidentiality without being asked for a statement or promised confidentiality.  The NLRB concluded that the employer “violated the Act by failing to provide the witnesses’ names and job titles.”  As for two the witness statements, the Board decided to overrule prior precedent, but to not apply retroactively it to employer in American Baptist Homes.  Nonetheless, because the third statement had been submitted spontaneously without any assurance of confidentiality, the employer was required to produce it to the union.

 Under the Board’s new test, “if the requested information is determined to be relevant, the party asserting the confidentiality defense has the burden of proving that a legitimate and substantial confidentiality interest exists, and that it outweighs the requesting party’s need for the information.” An employer “asserting the confidentiality defense may not simply refuse to furnish the requested information, but must raise its confidentiality concerns in a timely manner and seek an accommodation from the” union.  The Board majority rejected the dissent’s concern about the impact this would have on workplace investigations, particularly sexual harassment investigations governed by EEOC guidelines:  

The Detroit Edison balancing test is designed to take into account any legitimate and substantial confidentiality interest that an employer may have, which would include concerns about witness intimidation or compliance with EEOC guidelines. Where such concerns exist, the employer will not be required to provide the information, but will merely need to seek an accommodation from the union. It follows, then, that the Detroit Edison test encourages parties to a collective bargaining agreement to work together to accommodate their competing interests.

Duty to Bargain with Union Imposed on Employee Disciplinary Decisions.  In Alan Ritchey, Inc., the Board held for the first time that an employer which has not yet adopted a collective bargaining agreement with a union must first bargain with the union before imposing discretionary disciplinary actions on any employees in the bargaining unit.    The disciplinary actions at issue involved discretionary progressive disciplinary action for absenteeism, insubordination and threatening behavior.   Imposing disciplinary action was found to be a prohibited material unilateral change in the terms and conditions of employment. “[T]he employer has both a duty to maintain an existing policy governing terms and conditions of employment and a duty to bargain over discretionary applications of that policy.”

Disciplinary actions such as suspension, demotion, and discharge plainly have an inevitable and immediate impact on employees’ tenure, status, or earnings. Requiring bargaining before these sanctions are imposed is appropriate,  . . .  because of this impact on the employee and because of the harm caused to the union’s effectiveness as the employees’ representative if bargaining is postponed. Just as plainly, however, other actions that may nevertheless be referred to as discipline and that are rightly viewed as bargainable, such as oral and written warnings, have a lesser impact on employees, viewed as of the time when action is taken and assuming that they do not themselves automatically result in additional discipline based on an employer’s progressive disciplinary system. Bargaining over these lesser sanctions—which is required insofar as they have a “material, substantial, and significant impact” on terms and conditions of employment— may properly be deferred until after they are imposed.

The Board rejected concerns with the delay from a duty to bargain before imposing disciplinary action because the pre-imposition bargaining was only required for suspensions, demotions and discharges.  Moreover, “where the preimposition duty to bargain exists, the employer’s obligation is simply to provide the union with notice and an opportunity to bargain before discipline is imposed.  . . .  the employer is not required to bargain to agreement or impasse at this stage; rather, if the parties have not reached agreement, the duty to bargain continues after imposition.”  (emphasis added).  In addition, an employer could still act unilaterally where it “has a reasonable, good-faith belief that an employee’s continued presence on the job presents a serious, imminent danger to the employer’s business or personnel,” such as where “an employee has engaged in unlawful conduct, poses a significant risk of exposing the employer to legal liability for his conduct, or threatens safety, health, or security in or outside the workplace.” “Finally, an employer need not await an overall impasse in bargaining before imposing discipline, so long as it exercises its discretion within existing standards.”

Nonetheless, because this was a new Board policy, it decided to not apply the ruling retroactively to the employer, but to only apply it to disciplinary actions taken in the future.

Other Recent Board Decisions.  The Board also publicized its actions in a few other cases. In Latino Express , the Board decided to require employer to compensate employees for any extra taxes they have to pay as a result of receiving the backpay in a lump sum and to require employers paying back wages to file with the Social Security Administration a report allocating the back wages to the years in which they were or would have been earned. In Chicago Mathematics & Science Academy, the Board concluded that it had jurisdiction over an Illinois non-profit corporation that operates a public charter school in Chicago. In United Nurses & Allied Professionals (Kent Hospital) – The Board, addressed “several issues involving the rights of nonmember dues objectors under the Supreme Court’s Beck decision” and concluded that “ lobbying expenses are chargeable to objectors, to the extent that they are germane to collective bargaining, contract administration, or grievance adjustment.”  Finally, in WKYC-TV, Gannet Co. “the Board found that an employer’s obligation to collect union dues under a check-off agreement will continue after the contract expires and before a bargaining impasse occurs or a new contract is reached.”

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Good News and Bad News from the NLRB in October

It often seems like only crazy news has been coming out of the NLRB these days.   You know what I mean: employers being unable to require common courtesies from their employees or to prohibit them from defaming one another.  In a recent case, the divided NLRB ruled that it violates the NLRA to not promptly respond to a union request for irrelevant information.  However, the NLRB’s General Counsel took some action to reign in some of the craziness last month.  

Responding to Requests for Irrelevant Information.  First, bad news.  In late October, the NLRB ruled that an employer violated the NLRA when it took four months to tell a union in writing that its request for information about a non-union entity was irrelevant. Iron Tiger Logistics, 359 NLRB No. 13.  The ALJ and the union ultimately agreed with the employer that the requested information was irrelevant to the union’s duties as bargaining representative and the employer did not need to produce the information.  The union did not appeal that finding.   Nonetheless, the ALJ found that waiting four months – until after the ULP charge had been filed --  to put in writing that the union’s request was for irrelevant information violated the employer’s duty to bargain in good faith with the union.  As explained by the ALJ:

[A]n employer must respond to a union’s request for relevant information within a reasonable time, either by complying with it or by stating its reason for noncompliance within a reasonable period of time. Failure to make either response in a reasonable time is, by itself, a violation of Section 8(a)(5) and (1) of the Act. Some kind of response or reaction is mandatory. Columbia University, 298 NLRB 941, 945 (1990), citing Ellsworth Sheet Metal, 232 NLRB 109 (1977).

The NLRB agreed: “an employer must timely respond to a union request seeking relevant information even when the employer believes it has grounds for not providing the information.”   Accordingly, the employer in this case “was required to timely provide [the requested] information or to timely present the Union with its reasons for not doing so.”  The Board majority rejected the dissent’s argument --  that no prior cases had ever found a statutory violation when the employer was not required to respond to a request for irrelevant information --  because the requested information was “presumptively relevant.”

 

The question here is not whether the Respondent had a duty to provide the information sought by the Union, but rather whether it had a duty to respond to the Union’s request in a timely way.

Employment at Will Disclaimers.  Now, the “good” news. In the last year or so, the NLRB has taken the position that employee handbook provisions – for both union and non-union employers -- violate the NLRA if they “explicitly prohibit NLRA-protected union or concerted activity, such as joining a union or discussing terms and conditions of employment with coworkers. Even if not explicit, a rule can be unlawful if employees would reasonably construe the language to prohibit such activity.”  It’s the “reasonably construe” language which has generated derision because there has been nothing reasonable about some of the construction being done.   The NLRB General Counsel has advised that:  

Rules that are ambiguous as to their application to Section 7 activity, and contain no limiting language or context that would clarify to employees that the rule does not restrict Section 7 rights, are unlawful.  In contrast, rules that clarify and restrict their scope by including examples of clearly illegal or unprotected conduct, such that they could not reasonably be construed to cover protected activity, are not unlawful.

 In February, an ALJ ruled that it violated the NRLA for a Red Cross employee handbook in Arizona to contain an employment-at-will disclaimer which provided, among other things, that ““I further agree that the at-will employment relationship cannot be amended, modified or altered in any way.”   According to the ALJ,

 

there is no doubt that “employees would reasonably construe the language to prohibit Section 7 activity . . . the signing of the acknowledgement form is essentially a waiver in which an employee agrees that his/her at-will status cannot change, thereby relinquishing his/her right to advocate concertedly,  whether represented by a union or not, to change his/her at-will status. For all practical purposes, the clause in question premises employment on an employee’s agreement not to enter into any contract, to make any efforts, or to engage in conduct that could result in union representation and in a collective-bargaining agreement, which would amend, modify, or alter the at-will relationship. Clearly such a clause would reasonably chill employees who were interested in exercising their Section 7 rights.

The employer settled the case rather than appeal it to the NLRB. 

 Employment at will disclaimers are standard in order to explain to employees that they do not have a contractual right to a job for a definite period of time unless certain contingencies are satisfied (like, for instance, a contract signed by the CEO or Board President, etc.).  Without the disclaimer, employers often found themselves being sued by terminated employees claiming that their discharge was unfair and they had been orally promised lifetime employment, etc.  Fortunately, the bad press generated by this ALJ decision and settlement woke up the NLRB General Counsel’s office, which published a memorandum requiring “all Regional Offices to submit cases involving employer handbook at-will provisions to the Division of Advice for further analysis and coordination”  purportedly  “because Board law in this area remains unsettled.”

The General Counsel also publicized that most employment at-will disclaimers do not violate the NLRA. Merely highlighting that “that the employer’s representatives are not authorized to change” the employees’ employment at will relationship does not violate the NLRA.   In particular, the General Counsel specifically approved the employee handbook used by two employers:

·        Employment with Rocha Transportation is employment at-will. Employment at-will may be terminated with or without cause and with or without notice at any time by the employee or the Company. Nothing in this Handbook or in any document or statement shall limit the right to terminate employment at-will. No manager, supervisor, or employee of Rocha Transportation 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 relationship between you and Mimi's Cafe is referred to as employment at will." This means that your employment can be terminated at any time for any reason, with or without cause, with or without notice, by you or the Company. No representative of the Company has authority to enter into any agreement contrary to the foregoing "employment at will" relationship. Nothing contained in this handbook creates an express or implied contract of employment.

 The General Counsel acknowledges the utility of the employment at will disclaimers and their prior approval by the Board and courts:

 

It is commonplace for employers to rely on policy provisions such as those at issue here as a defense against potential legal actions by employees asserting that the employee handbook creates an enforceable employment contract. See NLRB v. Ace Comb Co., 342 F.2d 841, 847 (8th Cir. 1965) ("It must be remembered that it is not the purpose of the Act to give the Board any control whatsoever over an employer's policies, including his policies concerning tenure of employment, and that an employer may hire and fire at will for any reason whatsoever, or for no reason, so long as the motivation is not violative of the Act"); Aeon Precision Company, 239 NLRB 60, 63 (1978) (same); Aileen, Inc., 218 NLRB 1419, 1422 (1975) (same).

Accordingly, it rejected the argument that the NLRA was violated by a handbook which provided that no representative had authority to modify the employment at will relationship as long as the disclaimer and/or signed acknowledgement “does not require employees to refrain from seeking to change their at-will status or to agree that their at-will status cannot be changed in any way.”  Notably, the NLRB General Counsel’s office is still taking the position that it could violate the NLRA for an employee handbook provision to “require employees to refrain from seeking to change their at-will status or to agree that their at-will status cannot be changed in any way.” 

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

NLRB Invalidates Employer’s Courtesy Rule as Violating Employee Right to Be Disrespectful, But Upholds Termination for Mocking Customer Test Drive

On Friday, a divided NLRB (i.e., 2 Democrats vs. 1 Republican) affirmed an Administrative Law Judge decision that an automobile dealership violated its employee's rights by utilizing an employee handbook which required employees to behave courteously. Karl Knauz Motors, Inc.,
Case 13–CA–046452. The NLRB unanimously, however, affirmed the ALJ finding that the employer lawfully terminated the employee for mocking a customer test driving accident on his Facebook page because he was not engaging in any concerted activity arguably related to the terms and conditions of his employment or on behalf of co-workers.   Interestingly, in light of the lawful termination grounds, the NLRB refused to address the employee's argument that he was actually terminated for a different Facebook post where he mocked the employer's cheap refreshments for customers of its expensive cars. In contrast to mocking the poor driving skills of a customer's child (and the sales rep apparently sitting in the passenger seat), mocking the employer's cheap refreshments was arguably related to the lower sales commissions the employee anticipated would flow from the minimal investment in food. The employer did not object to the ALJ's finding that the handbook also violated the NLRA with its provisions on "unauthorized interviews" and "outside inquiries concerning employees" and had rescinded those rules (as well as the Courtesy rule) before the evidentiary hearing. The NRLB General Counsel also did not object to ALJ's approval of the employee handbook's "Bad Attitude" rule.  

The NLRB's discussion may be enlightening for employers:

The judge found that the Respondent, which owned and operated a BMW dealership, violated Section 8(a)(1) of the Act by maintaining a rule in its employee handbook stating:

(b) 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.

For the following reasons, we agree with the judge's finding.

An employer violates Section 8(a)(1) when it maintains a work rule that reasonably tends to chill employees in the exercise of their Section 7 rights. . . . If it does not, the violation is dependent upon a showing of one of the following: (1) employees would reasonably construe the language to prohibit Section 7 activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7 rights. Id. at 647. (citations omitted).

We find the "Courtesy" rule unlawful because employees would reasonably construe its broad prohibition against "disrespectful" conduct and "language which injures the image or reputation of the Dealership" as encompassing Section 7 activity, such as employees' protected statements—whether to coworkers, supervisors, managers, or third parties who deal with the Respondent— that object to their working conditions and seek the support of others in improving them. First, there is nothing in the rule, or anywhere else in the employee handbook, that would reasonably suggest to employees that employee communications protected by Section 7 of the Act are excluded from the rule's broad reach. See generally Costco Wholesale Corp., 358 NLRB No. 106 (2012) (finding unlawful the maintenance of a rule prohibiting statements posted electronically that "damage the Company . . . or damage any person's reputation"). Second, an employee reading this rule would reasonably assume that the Respondent would regard statements of protest or criticism as "disrespectful" or "injur[ious] [to] the image or reputation of the Dealership." Cf. NLRB v. Gissel Packing Co., 395 U.S. 575 (1969) (in evaluating employer statements alleged to violate Sec. 8(a)(1), "assessment of the precise scope of employer expression . . . must be made in the context of its labor relations setting" and "must take into account the economic dependence of the employees on their employers"). As we recently observed:

Board law is settled that ambiguous employer rules – rules that reasonably could be read to have a coercive meaning – are construed against the employer. This principle follows from the Act's goal of preventing employees from being chilled in the exercise of their Section 7 rights[,] whether or not that is the intent of the employer . . . .

Flex Frac Logistics, LLC, 358 NLRB No. 127, slip op. at 2 (2012).

. . . .

In other words, compliance with the first sentence of the rule is no assurance against sanctions under the second sentence of the rule. Reasonable employees would believe that even "courteous, polite, and friendly" expressions of disagreement with the Respondent's employment practices or terms and conditions of employment risk being deemed "disrespectful" or damaging to the Respondent's image or reputation. Thus, contrary to the dissent's contention, the second sentence of the rule proscribes not a manner of speaking, but the content of employee speech—content that would damage the Respondent's reputation. For example, here we find that the Respondent unlawfully coerced its employees by promulgating two other rules that restrict employees' ability to communicate about their terms and conditions of employment. Presumably, even if employees shared with third parties information about our findings of the Respondent's unlawful conduct in the most genteel manner, such sharing would be injurious to the Respondent's image or reputation. A reasonable employee, consequently, would believe that such a communication would expose him or her to sanctions under the Respondent's rule.

The dissent argued that the majority's interpretation of past precedent was unreasonable as applied to the facts of this case. In any event, the employer was ordered to rescind the "Courtesy" rule in its employee handbook "that prohibits employees from being disrespectful or using profanity or any other language which injures the image or reputation of the Dealership," notify the employees of the rescission and post a copy of the Appendix summarizing the NLRB requirements. It was not, however, required to reinstate the fired employee.

As mentioned, the ALJ did not find any problem with the employer's Bad Attitude rule, which the employer also rescinded before the hearing and which provided:

Bad Attitude: Employees should display a positive attitude toward their job. A bad attitude creates a difficult working environment and prevents the Dealership from providing quality service to our customers.

The ALJ found that "the one sentence prohibition would reasonably be read to protect the relationship between the Respondent dealer and its customers, rather than to restrict the employees' Section 7 rights. As was frequently mentioned during the hearing, BMW is a top of the line automobile with, I imagine, an appropriate sticker cost. A dealer in that situation, I believe, has the right to demand that its employees not display a bad attitude toward its customers."

In publicizing the decision, the NLRB explains:

The National Labor Relations Act protects the group actions of employees who are discussing or trying to improve their terms and conditions of employment. An individual's actions can be protected if they are undertaken on behalf of a group, but the judge found, and the Board agreed, that was not the case here.

As Judge Biblowitz wrote, "It was posted solely by [the employee], apparently as a lark, without any discussion with any other employee of the Respondent, and had no connection to any of the employees' terms and conditions of employment. It is so obviously unprotected that it is unnecessary to discuss whether the mocking tone of the posting further affects the nature of the posting." Because the posts about the marketing event did not cause the discharge, the Board found it unnecessary to pass on whether they were protected.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

NLRB: Employer Violates §7 By Telling Employees Not to Discuss Matters Under Investigation

On Tuesday, the NLRB reversed a finding by the administrative law judge and found an employer to have violated employees' section 7 rights under the NLRA by instructing them during an internal investigation not to discuss the matters under investigation during the pendency of the investigation. Banner Health Systems,358 NLRB No. 93. While the Board agreed that there was insufficient evidence that the charging party had been disciplined for insubordination in retaliation for him exercising his rights to protest what he thought was an unsafe practice, it concluded that the employer violated the NLRA when the HR consultant investigating the matter routinely asked complaining employees to not to discuss the issue with their co-workers while the investigation was pending. An employer's "generalized concern with protecting the integrity of its investigations is insufficient to outweigh employees' Section 7 rights."

To justify a prohibition on employee discussion of ongoing investigations, an employer must show that it has a legitimate business justification that outweighs employees' Section 7 rights. See Hyundai America Shipping Agency, 357 NLRB No. 80, slip op. at 15 (2011) (no legitimate and substantial justification where employer routinely prohibited employees from discussing matters under investigation). In this case, the judge found that the Respondent's prohibition was justified by its concern with protecting the integrity of its investigations. Contrary to the judge, we find that the Respondent's generalized concern with protecting the integrity of its investigations is insufficient to outweigh employees' Section 7 rights. Rather, in order to minimize the impact on Section 7 rights, it was the Respondent's burden "to first determine whether in any give[n] investigation witnesses need[ed] protection, evidence [was] in danger of being destroyed, testimony [was] in danger of being fabricated, or there [was] a need to prevent a cover up." Id. The Respondent's blanket approach clearly failed to meet those requirements. Accordingly, we find that the Respondent, by maintaining and applying a rule prohibiting employees from discussing ongoing investigations of employee misconduct, violated Section 8(a)(1) of the Act.

Whether the HR consultant's instruction was a directive or a mere suggestion, "had a reasonable tendency to coerce employees, and so constituted an unlawful restraint of Section 7 rights." The Board also found it irrelevant that the charging party was not threatened with discipline if he violated the request to not discuss the matter until the investigation was complete. "The law, however, does not require that a rule contain a direct or specific threat of discipline in order to be found unlawful."

Therefore, unless an employer (union or non-union) can show that it has more than a generalized concern with protecting the integrity of an internal investigation and can show that there is a legitimate issue with fabricated testimony, protection of evidence or need to prevent a cover-up, it will need to immediately sequester witnesses during an investigation and interview them almost simultaneously in order to prevent witness contamination.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

NLRB Posting Rule Postponed Again

Yesterday, the United States Court of Appeals for the District of Columbia Circuit granted an emergency motion for an injunction pending appeal in the National Association of Manufacturers v. NLRB, No. 12-5068 and the NLRB announced that it will comply with the stay and file a cross-appeal. As reported here last month, the District Court had upheld the NLRB’s new requirement for most private sector employers to post a notice of employee rights under the National Labor Relations Act (NLRA), but simultaneously concluded that the enforcement actions which the NLRB intended to take to enforce the new requirement were outside its authority under the NLRA. The new posting requirement was to begin at the end of this month on April 30, 2012. An appeal was filed by the NAM and it sought to enjoin the new posting requirement pending the appeal. The NRLB objected to staying the posting requirement, while also indicating that it might appeal the portion of the decision denying its enforcement powers. (In the meantime, a federal court in South Carolina rejected the NLRB’s authority to require employers to post the notice). The Court of Appeals ultimately concluded that because the posting requirement had been stayed by the NLRB since August during the pendency of the district court litigation, staying it another six months or so while the appeal progressed was advisable to maintain the status quo.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

NLRB Again Delays Imposition of New Notice Requirements

Just in time for Xmas, the NLRB announced on Friday that it was delaying again the new requirement for employers to post notice of employees' rights under the National Labor Relations Act. The new requirement is being challenged in federal court and the court requested the NLRB to postpone the new requirement. The new deadline is April 30, 2012.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

NLRB Delays New Posting Requirement Until 2012

[Editor's Note: Just in time for Xmas, the NLRB announced that the new requirement would be delayed yet again (at the request of a federal court hearing an employer challenge to the new rule) until April 30.]

Yesterday, the NLRB announced that it was delaying from November 14 until January 31, 2012 the new requirement for employers to post a notice explaining employees' rights under the National Labor Relations Act. The reason given is to give the NLRB time to reach out and educate small and medium sized employers as to who is and is not subject to the NLRA.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

NLRB to Require Employers to Post Notice of Employee-Union Rights

[New Editor's Note: On December 23, 2011, the NLRB announced again that it was postponing the implementation of the new posting requirement from November 14 until April 30, 2012. In April 2012, the NLRB announced that it was postponing the requirement pending resolution of an appeal to the D.C. Circuit Court of Appeals.]

[Editor's Note: As expected, the final rule was published in the Federal Register on August 30, 2011. The poster has been available on the NLRB website since September 14, 2011.]

On Tuesday, Federal Register is expected to contain a rule adopted on Thursday by the NLRB requiring all employers subject to the National Labor Relations Act (i.e., which does not include states, federal government, unions, political subdivisions, employers subject to the Railway Labor Act, etc.) to post a notice in a conspicuous place of employee rights under the NLRA. A copy of the form notice eventually will be available on the NLRB website. Government contractors may continue to post the notice required by the DOL instead of the NLRB notice. When the entire workforce is not proficient in reading English, a separate notice must be posted in any language spoken by 20% of the workforce. The rule will take effect 75 days after it has been published in the Federal Register (i.e., November 14) and will be codified at 29 C.F.R. Part 104.

In addition to posting the required notice physically, "an employer must also post the required notice on an intranet or internet site if the employer customarily communicates with its employees about personnel rules or policies by such means. An employer that customarily posts notices to employees about personnel rules or policies on an intranet or internet site will satisfy the electronic posting requirement by displaying prominently – i.e., no less prominently than other notices to employees -- on such a site either an exact copy of the poster, downloaded from the Board's Web site, or a link to the Board's Web site that contains the poster. The link to the Board's Web site must read, "Employee Rights under the National Labor Relations Act."

The rationale for the posting requirement is that most employees are not aware of their rights under the NLRA. This has been attributed to the declining union membership, a failure of high school civics teachers, and greater number of immigrant employees. The NLRB refused to include on its poster all employee rights, such as the right to vote to decertify a union, etc.

Employers who fail to post the notice can face three adverse consequences. The NLRB will treat the posting failure as an unfair labor practice (subject to a cease and desist order) and may treat it as evidence of anti-union animus (on other allegations). In addition, the NLRB may toll the six-month limitations period for an employee to file an ULP Charge for the period during which the employer failed to post the employees' notice of rights.

Not all small and/or non-profit employers are subject to the NLRA and should consult with their attorney to confirm whether they are required to post the NLRB notice.

The new rule is already being challenged as beyond the statutory authority of the NLRB. The text of the notice has been subject to some criticism because the listed rules are not equally applicable to all employees as stated because of differences in how the law is applied in different regions and industries. The text provides as follows:

EMPLOYEE RIGHTS UNDER THE NATIONAL LABOR RELATIONS ACT

The National Labor Relations Act (NLRA) guarantees the right of employees to organize and bargain collectively with their employers, and to engage in other protected concerted activity or to refrain from engaging in any of the above activity. employees covered by the NLRA* are protected from certain types of employer and union misconduct. This Notice gives you general information about your rights, andabout the obligations of employers and unions under the NLRA. Contact the National Labor Relations Board (NLRB), the Federal agency that investigates and resolves complaints under the NLRA, using the contact information supplied below, if you have any questions about specific rights that may apply in your particular workplace.

Under the NLRA, you have the right to:

• Organize a union to negotiate with your employer concerning your wages, hours, and other terms and conditions of employment.



• Form, join or assist a union.
  


• Bargain collectively through representatives of employees' own choosing for a contract with your employer setting your wages, benefits, hours, and other working conditions.



• Discuss your wages and benefits and other terms and conditions of employment or union organizing with your co-workers or a union.
  


• Take action with one or more co-workers to improve your working conditions by, among other means, raising work-related complaints directly with your employer or with a government agency, and seeking help from a union.



• Strike and picket, depending on the purpose or means of the strike or the picketing.
  


• Choose not to do any of these activities, including joining or remaining a member of a union.
  

Under the NLRA, it is illegal for your employer to:

• Prohibit you from talking about or soliciting for a union during non-work time, such as before or after work or during break times; or from distributing union literature during non-work time, in nonwork areas, such as parking lots or break rooms.


• Question you about your union support or activities in a manner that discourages you from engaging in that activity.


• Fire, demote, or transfer you, or reduce your hours or change your shift, or otherwise take adverse action against you, or threaten to take any of these actions, because you join or support a union, or because you engage in concerted activity for mutual aid and protection, or because you choose not to engage in any such activity.


• Threaten to close your workplace if workers choose a union to represent them.


• Promise or grant promotions, pay raises, or other benefits to discourage or encourage union support.


• Prohibit you from wearing union hats, buttons, t-shirts, and pins in the workplace except under special circumstances.


• Spy on or videotape peaceful union activities and gatherings or pretend to do so.
  

Under the NLRA, it is illegal for a union or for the union that represents you in bargaining with your employer to:

• Threaten or coerce you in order to gain your support for the union.


• Refuse to process a grievance because you have criticized union officials or because you are not a member of the union.


• Use or maintain discriminatory standards or procedures in making job referrals from a hiring hall.
  


• Cause or attempt to cause an employer to discriminate against you because of your union-related activity.
  


• Take adverse action against you because you have not joined or do not support the union.
  


• If you and your co-workers select a union to act as your collective bargaining representative, your employer and the union are required to bargain in good faith in a genuine effort to reach a written, binding agreement setting your terms and conditions of employment. The union is required to fairly represent you in bargaining and enforcing the agreement.
  

Illegal conduct will not be permitted. If you believe your rights or the rights of others have been violated, you should contact the NLRB promptly to protect your rights, generally within six months of the unlawful activity. You may inquire about possible violations without your employer or anyone else being informed of the inquiry. Charges may be filed by any person and need not be filed by the employee directly affected by the violation. The NLRB may order an employer to rehire a worker fired in violation of the law and to pay lost wages and benefits, and may order an employer or union to cease violating the law. Employees should seek assistance from the nearest regional NLRB office, which can be found on the Agency's Web site: http://www.nlrb.gov. You can also contact the NLRB by calling toll-free: 1-866-667-NLRB (6572) or (TTY) 1-866-315-NLRB (1-866-315-6572) for hearing impaired. If you do not speak or understand English well, you may obtain a translation of this notice from the NLRB's Web site or by calling the toll-free numbers listed above.

The National Labor Relations Act covers most private-sector employers. Excluded from coverage under the NLRA are public-sector employees, agricultural and domestic workers, independent contractors, workers employed by a parent or spouse, employees of air and rail carriers covered by the Railway Labor Act, and supervisors (although supervisors that have been discriminated against for refusing to violate the NLRA may be covered).

This is an official Government Notice and must not be defaced by anyone.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Supreme Court Invalidates Decisions of Two-Member NLRB

This morning, in one of the most highly-anticipated decisions of the year, the United States Supreme Court ruled 5-4 that the NLRB does not have the legislatively required quorum to act when it only has two members. New Process Steel v. NLRB, No. 08-1457. Under the 1947 Taft-Hartley Act, the NLRB is supposed to have five members. However, for a variety of reasons – mostly related to the partisan Congress – it only had two members between January 1, 2008 and March 27, 2010 (when President Obama made two recess appointments after it became clear that his appointees would not receive Senate confirmation). During that 27 months, the NLRB had issued approximately 600 decisions when the two remaining members could agree. Two of those decisions involved the employer who appealed enforcement to federal court. The Seventh Circuit ruled that the NLRB could act with only two members, but the Supreme Court reversed in an opinion written by outgoing Justice Stevens. Although the THA permitted the five-member Board to delegate decisions to a three-member panel, that panel could not act with only two members present.

The Board's quorum requirements and delegation procedure are set forth in §3(b) of the NLRA, 49 Stat. 451, as amended by 61 Stat. 139, which provides: "The Board is authorized to delegate to any group of three or more members any or all of the powers which it may itself exercise. . . . A vacancy in the Board shall not impair the right of the remaining members to exercise all of the powers of the Board, and three members of the Board shall, at all times, constitute a quorum of the Board, except that two members shall constitute a quorum of any group designated pursuant to the first sentence hereof." 29 U. S. C. §153(b).

It is undisputed that the first sentence of this provision authorized the Board to delegate its powers to the three member group effective on December 28, 2007, and the last sentence authorized two members of that group to act as a quorum of the group during the next three days if, for example, the third member had to recuse himself from a particular matter. The question we face is whether those two members could continue to act for the Board as a quorum of the delegee group after December 31, 2007,when the Board's membership fell to two and the designated three-member group of "Members Liebman, Schaumber, and Kirsanow" ceased to exist due to the expiration of Member Kirsanow's term. Construing §3(b)as a whole and in light of the Board's longstanding practice, we are persuaded that they could not.

The Court construed the first clause "as requiring that the delegee group maintain a membership of three in order for the delegation to remain valid" for three reasons.

First, and most fundamentally, reading the delegation clause to require that the Board's delegated power be vested continuously in a group of three members is the only way to harmonize and give meaningful effect to all of the provisions in §3(b). . . . . Interpreting the statute to require the Board's powers to be vested at all times in a group of at least three members is consonant with the Board quorum requirement, which requires three participating members "at all times" for the Board to act. The interpretation likewise gives material effect to the three-member requirement in the delegation clause. The vacancy clause still operates to provide that vacancies do not impair the ability of the Board to take action, so long as the quorum is satisfied. And the interpretation does not render inoperative the group quorum provision, which still operates to authorize a three member delegee group to issue a decision with only two members participating, so long as the delegee group was properly constituted. Reading §3(b) in this manner, the statute's various pieces hang together—a critical clue that this reading is a sound one.

. . . .

Second, and relatedly, if Congress had intended to authorize two members alone to act for the Board on an ongoing basis, it could have said so in straight forward language. Congress instead imposed the requirement that the Board delegate authority to no fewer than three members, and that it have three participating members to constitute a quorum. Those provisions are at best an unlikely way of conveying congressional approval of a two member Board. Indeed, had Congress wanted to provide for two members alone to act as the Board, it could have maintained the NLRA's original two-member Board quorum provision.

. . . .

Furthermore, if Congress had intended to allow for a two-member Board, it is hard to imagine why it would have limited the Board's power to delegate its authority by requiring a delegee group of at least three members. Nor do we have any reason to surmise that Congress' overriding objective in amending §3(b) was to keep the Board operating at all costs; the inclusion of the three-member quorum and delegation provisions indicate otherwise. Cf. Robert's Rules of Order §3, p. 20 (10th ed. 2001) ("The requirement of a quorum is a protection against totally unrepresentative action in the name of the body by an unduly small number of persons").

In sum, a straightforward understanding of the text, which requires that no fewer than three members be vested with the Board's full authority, coupled with the Board's longstanding practice, points us toward an interpretation of the delegation clause that requires a delegee group to maintain a membership of three.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.