NLRB Prohibits Broad Confidentiality Clauses in Severance Agreements

On Tuesday, the National Labor Relations Board held that a hospital employer violated the NLRA in 2020 by offering laid off non-supervisory employees a separation agreement which, among other things, prohibited them from disparaging or making statements that harm the reputation of the employer.  McLaren Macomb, Case 07–CA– 263041 (2-21-23).  The Board is returning to a legal standard where “unlawful provisions in a severance agreement proffered to employees have a reasonable tendency to interfere with, restrain, or coerce the exercise of employee rights under Section 7 of the Act.”  More broadly, “an employer violates Section 8(a)(1) of the Act when it proffers a severance agreement with provisions that would restrict employees’ exercise of their NLRA rights.”  The Board expanded its analysis by including within this prohibition clauses which require employees to keep confidential the terms of the separation agreement where the only exceptions were for tax advisors, attorneys, spouses and when compelled by law.  “A severance agreement is unlawful if it precludes an employee from assisting coworkers with workplace issues concerning their employer, and from communicating with others, including a union, and the Board, about his employment.”  This is not a case where the confidentiality clause also carved out statutory rights, such as reporting to or cooperating with government agencies. 

According to the Board’s opinion, the employer temporarily laid off 11 non-supervisory/management  employees when the government restricted medical services during the COVID pandemic.  Without first informing or negotiating with the union, the employer later made those layoffs permanent and offered severance agreements which provided severance pay in return for a release of claims, etc. and promises to not disparage the hospital and to keep confidential the terms of the agreements:

6.  Confidentiality Agreement. The Employee acknowledges that the terms of this Agreement are confidential and agrees not to disclose them to any third person, other than spouse, or as necessary to professional advisors for the purposes of obtaining legal counsel or tax advice, or unless legally compelled to do so by a court or administrative agency of competent jurisdiction.

7. Non-Disclosure. At all times hereafter, the Employee promises and agrees not to disclose information, knowledge or materials of a confidential, privileged, or proprietary nature of which the Employee has or had knowledge of, or involvement with, by reason of the Employee’s employment. At all times hereafter, the Employee agrees not to make statements to Employer’s employees or to the general public which could disparage or harm the image of Employer, its parent and affiliated entities and their officers, directors, employees, agents and representatives.

The Agreements also made the employees liable for injunctive relief, attorneys’ fees and damages if they violated the provisions.  The Board had no difficulty finding the employer violated the NLRA by failing to first inform or negotiate with the union about the layoffs and severance agreements.  However, the Board also found that the agreements themselves violated the NLRA.

Relying almost exclusively on prior Board precedent that employees may not waive their Section 7 rights and cases which addressed whether employers could interfere with employees’ rights to report allegations to the Board or to assist other employees in asserting their Section 7 rights, then Board then asserts that the confidentiality provision would prevent employees from reporting the employer’s alleged misconduct to the NLRB:

The provision broadly prohibits the subject employee from disclosing the terms of the agreement “to any third person.” . . . The employee is thus precluded from disclosing even the existence of an unlawful provision contained in the agreement. This proscription would reasonably tend to coerce the employee from filing an unfair labor practice charge or assisting a Board investigation into the Respondent’s use of the severance agreement, including the nondisparagement provision. Such a broad surrender of Section 7 rights contravenes established public policy that all persons with knowledge of unfair labor practices should be free from coercion in cooperating with the Board.  The confidentiality provision has an impermissible chilling tendency on the Section 7 rights of all employees because it bars the subject employee from providing information to the Board concerning the Respondent’s unlawful interference with other employees’ statutory rights.

                . . .

The confidentiality provision would also prohibit the subject employee from discussing the terms of the severance agreement with his former coworkers who could find themselves in a similar predicament facing the decision whether to accept a severance agreement. In this manner, the confidentiality provision impairs the rights of the subject employee’s former coworkers to call upon him for support in comparable circumstances. Additionally encompassed by the confidentiality provision is discussion with the Union concerning the terms of the agreement, or such discussion with a union representing employees where the subject employee may gain subsequent employment, or alternatively seek to participate in organizing, or discussion with future co-workers.  A severance agreement is unlawful if it precludes an employee from assisting coworkers with workplace issues concerning their employer, and from communicating with others, including a union, and the Board, about his employment. Id. Conditioning the benefits under a severance agreement on the forfeiture of statutory rights plainly has a reasonable tendency to interfere with, restrain, or coerce the exercise of those rights. unless it is narrowly tailored to respect the range of those rights. (bolding added for emphasis).

There is no discussion in the case whether the agreements also provided that the confidentiality provision would not apply to prevent the employee from reporting or cooperating with any law enforcement or government agency, including, for instance, the NLRA or EEOC or SEC, etc.  Rather, the Board notes that: “The only exceptions are disclosure to spouse, for obtaining legal counsel or tax advice, or if compelled to do so by a court or administrative agency.”

Section 7 rights are not limited to discussions with coworkers, as they do not depend on the existence of an employment relationship between the employee and the employer, and the Board has repeatedly affirmed that such rights extend to former employees. It is further long-established that Section 7 protections extend to employee efforts to improve terms and conditions of employment or otherwise improve their lot as employees through channels outside the immediate employee - employer relationship . . . These channels include administrative, judicial, legislative, and political forums,  newspapers, the media, social media, and communications to the public that are part of and related to an ongoing labor dispute. Accordingly, Section 7 affords protection for employees who engage in communications with a wide range of third parties in circumstances where the communication is related to an ongoing labor dispute and when the communication is not so disloyal, reckless, or maliciously untrue to lose the Act's protection.

                 . . .

             . . . Where an agreement unlawfully conditions receipt of severance benefits on the forfeiture of statutory rights, the mere proffer of the agreement itself violates the Act, because it has a reasonable tendency to interfere with or restrain the prospective exercise of Section 7 rights, both by the separating employee and those who remain employed. Whether the employee accepts the agreement is immaterial. . . .

The nondisparagement provision on its face substantially interferes with employees’ Section 7 rights. Public statements by employees about the workplace are central to the exercise of employee rights under the Act. Yet the broad provision at issue here prohibits the employee from making any “statements to [the] Employer’s employees or to the general public which could disparage or harm the image of [the] Employer”—including, it would seem, any statement asserting that the Respondent had violated the Act (as by, for example, proffering a settlement agreement with unlawful provisions). This far-reaching proscription—which is not even limited to matters regarding past employment with the Respondent . . .

The Board also ordered the employer to “compensate the employees for any other direct or foreseeable pecuniary harms incurred as a result of the unlawful furloughs, including reasonable search-for-work and interim employment expenses, if any, regard[1]less of whether these expenses exceed interim earnings. Compensation for these harms shall be calculated separately from taxable net backpay . . .”

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.

While You Were Celebrating, the NLRB Has Been Busy

As has become common, the NLRB issued a number of notable decisions following election season (and the Georgia special election).  Last month, it issued three notable decisions (following a few notable actions last Fall) and Congress increased its funding by $25M at the end of the month.   Among other things, it will for the first time permit successful charging parties to recover more than back pay for harm incurred from NLRA violations (i.e., compensatory damages).  It will also presume that off duty employees of contractors cannot be excluded from private property if they are engaged in protected concerted activities.  And, it will permit unions to form units based on who wants to join, which could result in a proliferation of bargaining units.

On December 13, 2022, the NLRB sua sponte expanded the type of financial relief that a successful employee may recover after filing an unfair labor practice (but without ever using the term, compensatory damages).  Thryv, Inc., Nos. 20–CA–250250 and 20–CA–251105.   The employer was found to have unlawfully and unilaterally laid off six employees without first bargaining in good faith to impasse with the union.  As “make whole relief,” and without such a request from the union or any of the affected the employees, the NLRB ordered more than just reinstatement with back pay, which has been the traditional remedy for decades.  Rather, the Board ordered the employer “to compensate affected employees for all direct or foreseeable pecuniary harms that these employees suffer as a result of the respondent’s un[1]fair labor practice.”  In the civil litigation context, this is called compensatory damages:

We conclude that in all cases in which our standard remedy would include an order for make-whole relief, the Board will expressly order that the respondent compensate affected employees for all direct or foreseeable pecuniary harms suffered as a result of the respondent’s unfair labor practice.  As we explain below, any relief must be specifically calculated and requires the General Counsel to present evidence in compliance demonstrating the amount of pecuniary harm, the direct or foreseeable nature of that harm, and why that harm is due to the respondent’s unfair labor practice. The respondent, in turn, will have the opportunity to present evidence challenging the amount of money claimed, argue that the harm was not direct or foreseeable, or that it would have occurred regardless of the unfair labor practice.

The Board then discussed the reason for its radical change in more than five long pages. 

Three days later, the NLRB decided to return to the Obama-era standard for excluding individuals from private property.    In Bexar County Performing Arts Center Foundation, No. 16–CA–193636, the Board “abandoned” the current legal standard and returned to the old: 

Under the New York New York test, a property owner may lawfully exclude from its property off-duty employees who regularly work on the property for an onsite contractor and who seek to engage in Section 7 activity on the property only where the property owner is able to demonstrate that the contractor employees’ Section 7 activity significantly interferes with the use of the property or where exclusion is justified by another legitimate business reason, including, but not limited to, the need to maintain production and discipline.

In this case, union musicians wanted to enter a theatre which the ballet company (and the San Antonio Symphony and Opera San Antonio) leased in order to publicize their dispute with leaflets with the ballet company, which had opted to use recorded music instead of the union musicians for its performance of Sleeping Beauty.  The theatre (and city police) prohibited the musicians from leafletting at the theatre or the sidewalk and pushed them across the street.

The Board saw

no reason why contractor employees—just because their employer does not own the property where they regularly work—should not enjoy a similar opportunity to exercise their statutory rights at the place where they regularly work.

Accordingly, the Board found that the theatre violated the musicians’ rights under the NLRA:

by preventing the Symphony employees from distributing flyers on the sidewalk in front of the Tobin Center on the Respondent’s property about Ballet San Antonio’s use of recorded music, which deprived the Symphony employees of the work of performing that music live. The Symphony employees work regularly at the Tobin Center, and the Respondent has not demonstrated that the leafleting would have significantly interfered with the use of its property or that it had another legitimate business reason for denying them access.

On December 14, the Board relaxed the standard for determining the scope of a bargaining unit and returned to the Obama-era standard from Specialty Healthcare: “where a labor union seeks to represent a unit that contains some, but not all, of the job classifications at a particular workplace.”  In other words, the union can decide to “organize” only those employees who want to join and exclude the rest (who, presumably, would vote against the union and prevent it from obtaining majority support necessary to form a new unit).  American Steel Construction, Inc., No. 07–RC– 269162.    These are sometimes referred to as microunits. 

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 Broadens Joint Employer Test to Reach Temporary Employment Relationships

On Thursday, a divided NLRB adopted a new legal standard for determining joint employer status when a labor union seeks to represent temporary employees paid by an agency, but who are assigned to another employer which has indirect authority over certain terms and conditions of employment. Browning-Ferris Industries of California, Inc., 362 NLRB No. 186.  In doing so, the Board reversed the current standard, which had been in place since at least 1981, and found the company to be a joint employer with the temporary agency which supplied it with the employees at question.  The Board’s majority claims to focus on the contractual and exercised authority of the company to control – directly or indirectly --  the manner and means that the temporary employees perform the work.  Contracts which specify only the result to be obtained should not satisfy the Board’s new standard.  In any event, the Board also held that the bargaining obligations of the company would be limited to those terms and conditions over which it possesses authority to control through its contract with the temporary agency.

Under this standard, the Board may find that two or more statutory employers [i.e., employers subject to the NLRA] are joint employers of the same statutory employees if they “share or codetermine those matters governing the essential terms and conditions of employment.” In determining whether a putative joint employer meets this standard, the initial inquiry is whether there is a common-law employment relationship with the employees in question. If this common-law employment relationship exists, the inquiry then turns to whether the putative joint employer possesses sufficient control over employees’ essential terms and conditions of employment to permit meaningful collective bargaining.

Using the new standard, the Board will no longer consider whether a company which possesses authority over terms and conditions of employment (through the contract with the temporary agency) actually exercises that authority.   Neither will it consider whether the authority or control of the company is direct or immediate; indirect authority or control through an intermediary would be sufficient to find joint employment.  In other words, authority or control over terms and conditions of employment may only be theoretical for the Board to find an entity is a joint employer.  While the Board acknowledges that its decision will negatively impact the predictability of whether a particular company will be found to be a joint employer, it leaves future cases to be worked out based on their particular facts.  It also acknowledges that “it is certainly possible that in a particular case, a putative joint employer’s control might extend only to terms and conditions of employment too limited in scope or significance to permit meaningful collective bargaining.” 

Importantly, even if a company is found to be a joint employer based on its indirect authority over certain terms and conditions of employment, it would “required to bargain only with respect to such terms and conditions which it possesses the authority to control.”

In the case at hand, the company had 60 employees on its payroll, who worked outside and were already represented by the union which was seeking to also represent the company’s temporary employees.  Pursuant to an indefinite temporary labor services agreement, a temporary agency supplied the company with 240 employees that worked inside sorting materials on conveyor belts.  The temp agency also supplied and paid the supervisors and managers of its employees assigned to the company.   The company’s officers and managers oversaw the entire operation and met frequently and regularly with the temp agency management.  Only the temp agency had human resources staff on site and performed all of the interviewing, hiring, testing, etc.  However, the company specified that it wanted all of the applicants to be drug tested and to not be any of its former employees and retained the right to reject or discontinue any agency employees.  

Only two temp employees had been terminated because of complaints by the company (involving sabotage and drinking on duty) and there was no evidence that the company was otherwise involved in any disciplinary actions or investigations.   The agency paid the employees on its payroll, set work schedules and provided all benefits, including health insurance, vacation and sick days.  However, the company’s contract specified the wage rates through a cost-plus arrangement.  The company also established the shift schedules and operational needs, set the productivity standards, established the number of workers per conveyor belt per shift and the employee’s time sheets were signed by the company supervisors, not the agency’s.   Although most job training and orientation was provided by the agency, the company sometimes provided substantive training to the employees.  The company required the employees to adhere to its safety protocols and rules and provided the training on those matters. The conveyor belt speed was a source of friction between the employees and the company.  Company supervisors frequently told the employees directly that they were not working quickly or efficiently enough.

In addressing whether the company had to bargain with the union about the employees, the Board started with the premise that the common law agency test determines whether an employee is employed by the employer because independent contractors and other non-employees are not protected by the NLRA.

Section 220(1) of the Restatement (Second) [of Agency] provides that a “servant is a person employed to perform services in the affairs of another and who with respect to the physical conduct in the performance of the services is subject to the other’s control or right to control.”

(The dissent argued that the majority was actually applying the economic realities employment test from the Fair Labor Standard Act, which is more expansive than the common law test).  Based on this, the Board focused on the putative employer’s right to control the employee’s manner and means of performing the work.   Therefore, “mere ‘service under an agreement to accomplish results or to use care and skill in accomplishing results’ is not evidence of an employment, or joint-employment, relationship.”  In other words, the Board clarified that it did

not suggest today that a putative employer’s bare rights to dictate the results of a contracted service or to control or protect its own property constitute probative indicia of employer status. Instead, we will evaluate the evidence to determine whether a user employer affects the means or manner of employees’ work and terms of employment, either directly or through an intermediary.

In applying its new test to the case at issue, the Board found that the company was a joint employer because it was a common law employer of the employees in question and possessed authority over essential terms and conditions of employment so as to permit meaningful collective bargaining.  In particular, it found that the company had control over the following terms and conditions of employment:

·        Hiring, firing and discipline.  The company required the agency’s hiring standards to meet or exceed the company’s own standards, to include drug testing, to exclude former company employees, to dismiss any employee at the company’s request.  There was evidence that the company had only requested two employees to be removed (based on investigations conducted exclusively by the agency)

·        Supervision, direction of work and working hours.  The Company exclusively controlled the speed of the conveyor belts, productivity standards, the content of positions, and the placement of workers (although not the identity of workers), signed employee time cards and indirectly supervised workers through the agency etc.  The Company’s control was so extensive that the agency would be unable to meaningfully bargain over overtime, break times, safety or speed of work.

·        Wages.  The agency’s contract with the company established a wage ceiling, although the agency paid the employees, provided and administered benefits, and maintained all payroll records.   The contract was a cost-plus contract where the agency charged a percentage above specified pay rates for the employees. “Although this [cost-plus] arrangement, on its own, is not necessarily sufficient to create a joint-employer relationship, it is coupled here with the apparent requirement of BFI approval over employee pay increases.”

 It is expected that this new test will be applied to permit union organizing in fast food franchise relationships, construction and warehouses, etc.

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.

NLRB GC Provides Employee Handbook Advice

Last week, the NLRB General Counsel’s office issued a Memorandum to the Regional Offices describing what rules in employer handbooks (or employment agreements) would violate the NLRA.  As prefaced in the Memorandum, “the law does not allow even well intentioned rules that would inhibit employees from engaging in activities protected by the Act.”  Moreover, “the mere maintenance of a work rule may violate Section 8(a)(1) of the Act if the rule has a chilling effect on employees' Section 7 activity.”  Even rules that seem innocuous on their face, were never applied to restrict employee rights under the NLRA, and were not created in response to union or protected concerted activity “will still be found unlawful if . . . employees would reasonably construe the rule's language to prohibit Section 7 activity ” to engage in protected concerted conduct.   As I have discussed here before, the NLRB currently interprets “reasonably construe” in very unreasonable and almost ludicrous ways that no reasonable employee would have imagined.   Indeed, the General Counsel’s Memorandum acknowledges that “the vast majority of violations” found in employee handbooks under of the NLRA concern innocuous and common provisions (relating to confidentiality, professionalism, anti-harassment, trademarks, photography/recording, and media contact, etc.) that the current NLRB “reasonably construes” as prohibiting protected concerted activity under section 7 of the NLRA.   Because of this, the Memorandum compares provisions that have been found unlawful with those that have been found to be lawful and provisions from local employer Wendy’s International that the General Counsel believed were unlawful and were recently modified to settle an unfair labor practice charge.  

Confidentiality.  Rules have been found unlawful when they specifically required an employee to maintain the confidentiality of all information (including, but not limited to, wages, promotions, disciplinary actions, grievances, complaints, etc.) relating to other employees because employees have the section 7 right to discuss their terms and conditions of employment with each other and others (such as union officials and the media).  With this in mind, any rule or provision which requires employees to not discuss or disclose information relating to other employees will likely be found unlawful.  Moreover, even without specifically mentioning personnel information, the following rules were found to be unlawful because they could be “reasonably construed” to prohibit the disclosure of personnel information: 

·        Prohibiting employees from "[d]isclosing ... details about the [Employer]."

·        "Sharing of [overheard conversations at the work site] with your coworkers, the public, or anyone outside of your immediate work group is strictly prohibited."

·        "Discuss work matters only with other [Employer] employees who have a specific business reason to know or have access to such information.. .. Do not discuss work matters in public places."

·        "[I]f something is not public information, you must not share it."

·        Confidential Information is: "All information in which its [sic] loss, undue use or unauthorized disclosure could adversely affect the [Employer's] interests, image and reputation or compromise personal and private information of its members."

In contrast, the NLRB found the following rules to be lawful:  

·        No unauthorized disclosure of "business 'secrets' or other confidential information."

·        "Misuse or unauthorized disclosure of confidential information not otherwise available to persons or firms outside [Employer] is cause for disciplinary action, including termination."

·        "Do not disclose confidential financial data, or other non-public proprietary company information. Do not share confidential information regarding  business partners, vendors or customers."

·        Prohibition on disclosure of all "information acquired in the course of one's work"  (when this rule was located among rules relating to conflicts of interest, SEC compliance and other federal and state laws).

Inappropriate, Disrespectful or Defamatory Conduct.  Rules that prohibit staff from engaging in "disrespectful," "negative," “defamatory,” "inappropriate," or "rude" conduct towards the employer or management, or even making false statements, absent sufficient clarification or context, will generally be found unlawful.  In contrast, rules which require courteous, cooperative and respectful behavior towards only staff, customers and competitors are lawful.  The Memorandum explains that “employers have a legitimate business interest in having employees act professionally and courteously in their dealings with coworkers, customers, employer business partners, and other third parties, ” but apparently do not have a similar interest in similarly protecting the mental health and feelings of management employees.   

 While employers can ban insubordination, the rule may be unlawful if “insubordination” is defined or explained to include protected conduct, such as disrespect, etc.   In contrast, a rule banning insubordination which places it in context of serious misconduct, such as threatening, intimidation or assaults, will be upheld. While employers cannot ban defamatory, false or publicly derogatory statements about the employer, it can ban maliciously false statements or statements about the employers’ products (vs. the employer’s labor policies or working conditions).  With this in mind, the Memorandum endorses the following rules:  

·        "Each employee is expected to work in a cooperative manner with management/supervision, coworkers, customers and vendors."

·        "Each employee is expected to abide by Company policies and to cooperate fully in any investigation that the Company may undertake."  

·        "Being insubordinate, threatening, intimidating, disrespectful or assaulting a manager/supervisor, coworker, customer or vendor will result in" discipline.

The NLRA also gives employees the right “to argue and debate with each other about unions, management, and their terms and conditions of employment. These discussions can become contentious, but as the Supreme Court has noted, protected concerted speech will not lose its protection even if it includes ‘intemperate, abusive and inaccurate statements.’"  Therefore, anti-harassment rules cannot also ban protected vigorous debate under the NLRA.  Similarly, rules which have banned insulting, derogatory, embarrassing, hurtful or offensive comments (including those aimed at company employees, which can include management) or about politics (which can include right-to-work laws) are unlawful.  For instance, the following rules were found to violate the NLRA:  

• "Material that is fraudulent, harassing, embarrassing, sexually explicit, profane, obscene, intimidating, defamatory, or otherwise unlawful or inappropriate may not be sent by e-mail. . . ."

• Do not send "unwanted, offensive, or inappropriate" e-mails.

• "[D]on't pick fights" online.

Supposedly applying the same logic, the NLRB found the following rules to be lawful:

·        "Making inappropriate gestures, including visual staring."

·        Any logos or graphics worn by employees "must not reflect any form of violent, discriminatory, abusive, offensive, demeaning, or otherwise unprofessional message."

·        "[T]hreatening, intimidating, coercing, or otherwise interfering with the job performance of fellow employees or visitors."

·        No "harassment of employees, patients or facility visitors."

·        No "use of racial slurs, derogatory comments, or insults."

Finally, employees have the right to seek public support in their disputes against their employer. “While employers may lawfully control who makes official statements for the company, they must be careful to ensure that their rules would not reasonably  be read to ban employees from speaking to the media or other third parties on their own (or other employees') behalf.”  Under this logic, the NLRB has prohibited the following rules: 

• Employees are not "authorized to speak to any representatives of the print and/or electronic media about company matters" unless designated to do so by HR, and must refer all media inquiries to the company media hotline.

• "[A]ssociates are not authorized to answer questions from the news media. .. . When approached for information, you should refer the person to [the Employer's] Media Relations Department."  

·        "If you are contacted by any government agency you should contact the Law Department immediately for assistance."

That being said, the NLRB has been satisfied with the following rules when placed in context:

·        "The company strives to anticipate and manage crisis situations in order to reduce disruption to our employees and to maintain our reputation as a high quality company. To best serve these objectives, the company will respond to the news media in a timely and professional manner only through the designated spokespersons."

• "Events may occur at our stores that will draw immediate attention from the news media. It is imperative that one person speaks for the Company to deliver an appropriate message and to avoid giving misinformation in any media inquiry. While reporters frequently shop as customers and may ask questions about a matter, good reporters identify themselves prior to asking questions. Every . . . employee is expected to adhere to the following media policy: . .. 2. Answer all media/reporter questions like this: 'I am not authorized to comment for [the Employer] (or I don't have the information you want). Let me have our public affairs office contact you."

Employers also cannot preclude employee “fair use” of company trademarks and logos on their picket signs, leaflets, and other protest materials, etc.  The Board has extended this rule to preclude rules prohibiting use of other non-employer trademarks and logos and using the employer’s name in facebook and other social media posts.  These rules are often created to prevent violation of copyright infringement and unfair competition.   That being said, the Board has approved provisions encouraging employees to respect copyright and other intellectual property laws.

Photographs and Videos.

Employees also have a Section 7 right to photograph and make recordings in furtherance of their protected concerted activity, including the right to use personal devices to take such pictures and recordings. . . . Thus, rules placing a total ban on such photography or recordings, or banning the use or possession of personal cameras or recording devices, are unlawfully overbroad where they would reasonably be read to prohibit the taking of pictures or recordings on non-work time.

With this in mind, the Board has banned a rule prohibiting employees “from  wearing cell phones, making personal calls or viewing or sending texts ‘while on duty.’"  The Memorandum indicates that bans of news media cameras are lawful and that medical employers may prohibit photographing of patients.  

Last year, the Board settled with Wendy’s over certain provisions of its employee handbook, including the following:

·        Making the employee handbook itself confidential and prohibiting its disclosure and duplication.

·        Prohibiting employees from commenting about the Company's business, policies, or employees without authorization, particularly when it might reflect negatively on the Company.

·       Prohibiting employees from emailing, posting, commenting or blogging anonymously.

·        Warning employees “to avoid any conflict between your personal interests and those of the Company. A conflict of interest occurs when our personal interests interfere—or appear to interfere—with our ability to make sound business decisions on behalf of Wendy's.”

 

The Memorandum then contains new language used by Wendy’s which complies with 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.

Unlike Central Ohio Weather, NLRB Ends 2014 With Flurry of Activity

Another NLRB initiative was resurrected on December 15 when a final regulation was published shortening the time to conduct union elections in the private sector after April 14, 2015.  Management literature has referred to this as the “ambush rule’ or “quickie election” rule because of its potential to significantly shorten the period during which election and educational communications are shared with employees by employers about the pitfalls union representation.  (Unions generally start their electioneering and education about the benefits of union representation far in advance).  While a union election generally is now held approximately 42 days after a petition is filed, the new regulation contemplates an election could be held as early as 13-22 days after a Petition (for union recognition, unit clarification or decertification) is filed.  Accordingly, unless this regulation is delayed or voided through litigation, employers will need to be better prepared before a Petition is filed because there will not be much time to respond accurately or appropriately under the new rules otherwise.   The new regulation also imposes new obligations on employers to post and distribute notices, to assemble and serve alphabetized lists of employees, and to provide unions with employees’ personal cell phone numbers and email addresses.  On other fronts, the NLRB also changed this month its rules concerning deferring unfair labor practice charges which are also the subject of arbitration or grievance settlements and how it will address union organizational efforts among faculty at religious colleges and universities.

After a Petition is filed with the NLRB (which must be done electronically and served simultaneously on the employer under the new rule), the NLRB Regional Director then serves on the parties a Notice of Hearing.  This pre-election hearing will generally be held within 8 days of service of this notice.  (Because this Notice could be served the same day as when the Petition is filed, the employer’s obligations conceptually begin almost immediately).

One of the significant new requirements in this regulation is that employers will now be required to post (and to distribute electronically if that is the employer’s custom), a Notice of Petition within 2 days of when the Regional Director serves the employer with a Notice of Hearing (which will also contain a copy of the Notice of Petition).  Violation of this rule could result in the election being set aside, even if the employer ultimately wins the election:

Within 2 business days after service of the notice of hearing, the employer shall post the Notice of Petition for Election in conspicuous places, including all places where notices to employees are customarily posted, and shall also distribute it electronically if the employer customarily communicates with its employees electronically. The Notice of Petition for Election shall indicate that no final decisions have been made yet regarding the appropriateness of the petitioned-for bargaining unit and whether an election shall be conducted. The employer shall maintain the posting until the petition is dismissed or withdrawn or the Notice of Petition for Election is replaced by the Notice of Election. The employer’s failure properly to post or distribute the Notice of Petition for Election may be grounds for setting aside the election whenever proper and timely objections are filed under the provisions of § 102.69(a). A party shall be estopped from objecting to the nonposting of notices if it is responsible for the nonposting,  . . . .

Employer will also be required to produce a written list of objections to the petitioned election (regarding, for instance, the proposed scope of the bargaining unit, the improper inclusion of supervisors, the improper exclusion of other employees, etc.) by noon the day before the pre-election hearing.    Depending on when the Regional Director serves the Notice of Petition, this Statement of Position might be due as early as seven days after the Petition is filed.   Under the new procedures in the regulation, employers may not be entitled to file post-hearing briefs following the pre-election hearing.  Indeed, the pre-election hearing may not even determine voter eligibility or supervisory status before the election.   In fact, an evidentiary hearing on the employer’s objections may not be not held until after the election.  While the NLRB’s majority thinks this will save time (especially if the employer ultimately wins the election anyway), this ambiguity will create significant problems for employers in determining supervisory status of certain employees in order to avoid unfair labor practice charges and to effectively communicate with employees during the election period.

Another new requirement in the regulation is that the employer is also required to file at the same time (i.e., the day before the pre-election hearing) a list of employees:

The Statement of Position shall include a list of the full names, work locations, shifts, and job classifications of all individuals in the proposed unit as of the payroll period preceding the filing of the petition who remain employed at the time of filing, and if the employer contends that the proposed unit is inappropriate, the employer shall separately list the full names, work locations, shifts, and job classifications of all individuals that the employer contends must be added to the proposed unit to make it an appropriate unit. The employer shall also indicate those individuals, if any, whom it believes must be excluded from the proposed unit to make it an appropriate unit. The list(s) of names shall be alphabetized (overall or by department) . . .

Having such an employee list creates an advantage for the union if it wants to dismiss the Petition and attempt to organize larger group of employees.  At present, unions only need  30% of employees to sign cards expressing interest in an election before filing a Petition, but will need a majority of the eligible employees to vote in favor of the union in order to win.    As a strategic matter, a union could identify an inappropriately small unit for its initial petition, but then dismiss the petition and organize a larger group after the employer produces the new employee list for the entire (and larger) appropriate unit.

After the pre-election hearing, the Regional Director will then issue a Directive and Notice of Election.  (Conceptually, this could be issued the same day as or even the day after the day of the pre-election hearing).  At this point, the employer must file within 2 days an Excelsior list, which has been expanded under the new regulation to include the employees’ personal email and cell phone numbers.   This alphabetized Excelsior list  must contain “the full names, work locations, shifts, job classifications, and contact information (including home addresses, available personal email addresses, and available home and personal cellular (‘‘cell’’) telephone numbers) of all eligible voters.” There are no privacy protections or opt-out provisions for employees to avoid distribution of their personal email and cell phone numbers.   On the other hand, if the employer does not collect that information, it need not obtain it just to include in the Excelsior list.   The dissenting NLRB members note that this requirement is inconsistent with the NLRB’s recent decision in Purple Communications (where the Board ruled that employers must presumptively grant email access to employees for union and other section 7 communications because personal cell phones and emails were found to be insufficient).

The Federal Register explanation for the new rule is 184 pages long and obviously contains many details which are not mentioned in this summary.   Notably, an employer will not have time to read all of those pages after receiving a Petition because it will have a lot of other work to do. 

On December 16, the NLRB adopted new standards for determining when to exercise jurisdiction over self-identified religious colleges and universities and how to determine whether faculty are managerial employees who lack rights under the NLRA in Pacific Lutheran University.

A day earlier, in Babcock & Wilcox Construction Co., 361 NLRB 132, the NLRB changed its practice of automatically deferring unfair labor practice charges to the results of labor arbitrations and grievance settlements. 
 

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 Overrules Register-Guard and Finds Many Employees Have Presumptive Right to Use Employer’s Email System

As expected, the NLRB last week overruled its December 2007 decision in Register-Guard which had given more weight to an employer’s private property rights to manage its own email system than to employees’ need to communicate among themselves.   In Purple  Communications, Inc., 361 NLRB No. 126 (2014), another divided Board addressed this issue (which it bypassed in September) and held “that employee use of email for statutorily protected communications on nonworking time must presumptively be permitted by employers who have chosen to give employees access to their email systems.”  (emphasis added).   Although this decision will apply to union and non-union employers, it does not create an unrestricted right.   Employers are not required to provide email access to employees who do not already have access to the employer’s email system in the course of their work.   In addition, employers may still under “special circumstances” ban total nonworking use of email, “including section 7 use on nonworking time,” in order “to maintain production or discipline.”  Moreover, employers “may apply uniform and consistently enforced controls over its email system to the extent such controls are necessary to maintain production and discipline.”  This would include, for instance, banning large attachments and permitting employer monitoring of email usage.   Finally, nonemployees do not “have rights to access an employer’s email system.” Interestingly, the Board reserved for another time the rights of employees to utilize “other type[s] of electronic communications systems.”  Importantly for all employers, this decision will require another revision to common workplace email policies.

The NLRB has previously taken the position that email communication among employees (or with union organizers) can constitute protected “concerted activity.”  Employees had a statutory right under Section 7 of the NLRA to engage in concerted activities, which means that employers could not prohibit it or discipline an employee for engaging in such conduct.   However, in 2007, the NLRB narrowed an employee’s right to use an employer’s email system for union and other section 7 activities. The Guard Publishing Company, d/b/a The Register-Guard, 351 NLRB 1110 (12/16/07). The NLRB’s majority concluded that that a newspaper publisher employer did not violate §8(a)(1) of the National Labor Relations Act by maintaining a broad policy which prohibited employees from using its e-mail system for any “non-job-related solicitations.”  The Board analogized email to other employer equipment, such as telephones.   The Court of Appeals for the District of Columbia later narrowed the ruling when it held in 2009 that the employer still could not discriminate against union solicitation by permitting other personal non-work related solicitation emails, but disciplined the union president for sending union-related solicitation emails.   It was anticipated that the current NLRB would revisit and – to be consistent with the General Counsel’s views on other social media -- reverse the Register-Guard decision.  However, in September it ignored the issue in Purple Communications, Inc., 361 NLRB No. 43 (2014), even though the NLRB General Counsel invited the Board to overrule Register-Guard.  Nonetheless, last week, the NLRB revisited the issue and, as expected, ultimately overruled Register Guard.

According to the Board’s decision, the employer maintained a lawful “electronic communications policy limiting employee use of its email and other electronic systems [including computers, voice mail, cell phones and other equipment] to “business purposes only” and “specifically prohibit[ing]” certain uses by employees,”   including:  

2. Engaging in activities on behalf of organizations or persons with no professional or business affiliation with the Company. 

. . . .

5. Sending uninvited email of a personal nature.

Although there was no allegation that the employer had unlawfully enforced this policy against any employees, the NLRB’s General Counsel invited the Board to overrule Register-Guard in order to make this lawful policy unlawful.  The Board then invited amicus briefs from the employer and union communities on the issue, reversed Register-Guard, applied the decision retroactively and remanded the case for a determination whether the employer could rebut the new lawful presumption.   As the Board noted, the employer at worse would only be required to rescind its policy and so notify employees; it would not be subject to back pay liability or reinstatement obligations. 

After briefing, the Board adopted “a presumption that employees who have been given access to the employer’s email system in the course of their work are entitled to use the system to engage in statutorily protected discussions about their terms and conditions of employment while on nonworking time, absent a showing by the employer of special circumstances that justify specific restrictions.”   The Board rejected the argument   

that social media, texting, and personal email accounts constitute adequate alternative means for employee communications. Even if we agreed that alternative means were germane to the analysis here—which, as discussed below, we do not— the Respondent and amici here have not shown that our presumption would impinge more than minimally upon employers’ property rights, and therefore there is no need to go any further in accommodating them. In any event, we would not agree that such personal communication options are adequate, in light of the high value our precedents place on communication in the workplace.

As for the “special circumstances” which could justify limits on employee use of email, the employer bears the burden of articulating “the interest at issue” and showing “how that interest supports the email use restrictions it has implemented.” 

Because limitations on employee communication should be no more restrictive than necessary to protect the employer’s interests, we anticipate that it will be the rare case where special circumstances justify a total ban on nonwork email use by employees. In more typical cases, where special circumstances do not justify a total ban, employers may nonetheless apply uniform and consistently enforced controls over their email systems to the extent that such controls are necessary to maintain production and discipline.

By way of example, the Board observed that “[a]n employer’s interests in protecting its email system . . .  from damage or from overloads due to excessive use, would of course be relevant” to showing “special circumstances.”   The argument would be strengthened if the employer could show that “it adopted the restriction in order to protect the interests it asserts, instead of just citing certain interests, post hoc, to support a restriction that was not actually based on them.”   Moreover, an employer’s interests generally “will establish special circumstances only to the extent that those interests are not similarly affected by employee email use that the employer has authorized.”  However, it rejected “[t]he prior existence of an employer prohibition on employees’ use of email for nonwork purposes.”   

As for permitted restrictions on employee use of email, the Board noted that an employer could establish “uniform and consistently enforced restrictions, such as prohibiting large attachments or audio/ video segments, if the employer can demonstrate that they would interfere with the email system’s efficient functioning.”   

employers who choose to impose a working-time limitation will have concerns about the extent to which they may monitor employees’ email use to enforce that limitation. Our decision does not prevent employers from continuing, as many already do, to monitor their computers and email systems for legitimate management reasons, such as ensuring productivity and preventing email use for purposes of harassment or other activities that could give rise to employer liability.

Of course, employer surveillance of employee’s section 7 activities can violate the NLRA, but the Board responded that it would address such “surveillance allegations by the same standards that we apply to alleged surveillance in the bricks-and-mortar world.”

 

“those who choose openly to engage in union activities at or near the employer’s premises cannot be heard to complain when management observes them. The Board has long held that management officials may observe public union activity without violating the Act so long as those officials do not ‘do something out of the ordinary.’” An employer’s monitoring of electronic communications on its email system will similarly be lawful so long as the employer does nothing out of the ordinary, such as increasing its monitoring during an organizational campaign or focusing its monitoring efforts on protected conduct or union activists. Nor is an employer ordinarily prevented from notifying its  employees, as many employers also do already, that it monitors (or reserves the right to monitor) computer and email use for legitimate management reasons and that  employees may have no expectation of privacy in their use of the employer’s email system.

Apparently oblivious to a standard liability problem facing many employers from personal use of an employer’s email address – where the recipient – who may not be a co-worker -- does not always know the sender’s rank in the organization, the Board rejected concerns about the employers’ First Amendment and other rights:

We are simply unpersuaded that an email message, sent using the employer’s email system but not from the employer, could reasonably be perceived as speech by, or speech endorsed by, the employer—  particularly a message reflecting a view different from the employer’s. Email users typically understand that an email message conveys the views of the sender, not those of the email account provider. They would no more think that an email message sent from a coworker via a work email account speaks for the employer (unless the message was sent by the employer’s supervisor or agent) than they would think that a message they receive from a friend on their personal Gmail account speaks for Google.

There were two lengthy dissents.

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.