National Labor Relations Board (NLRB) Update/media/files/... · employers to gross up back pay awards to cover tax liability and to report back pay earnings to SSA – NLRB “reconsiders”

National Labor Relations Board (NLRB) Update

The Impact of Noel Canning, Employee Handbook Policies Under Siege, and What’s Ahead

SPB Labor & Employment Webinar Series August 13, 2014

Dan Pasternak

Lew Clark

Mike Hanna

2 squirepattonboggs.com

NLRB v. Noel Canning - what it held, what it means, and what to expect

NLRB and ALJ decisions addressing employer policies

Workplace Conduct and Behavior

Confidentiality

Dress Codes and Uniforms

Off-Duty Employee Access

Social Media

Key Labor Policy Issues Under NLRB Review

Agenda


NLRB issues decision in February 2012 finding that Washington state Pepsi

bottler Noel Canning committed unfair labor practices; Noel Canning appeals

Noel Canning’s argument

US Supreme Court issues decision on June 26, 2014 (134 S. Ct. 2550)

President lacked constitutional authority to appoint NLRB members during a 3-day

Senate recess in January 2012

Because these recess appointments were invalid, the NLRB had only two validly-

appointed members after January 2012

Supreme Court’s 2010 decision in New Process Steel held that the NLRB cannot act

without a three-member quorum

Full set of new NLRB members not confirmed until August 2013

The result: all NLRB decisions issued between January 2012 and August 2013

are void (including the decision finding against Noel Canning)

NLRB v. Noel Canning


Some of the key cases invalidated by Noel Canning:

- Banner Estrella Medical Center, 358 NLRB No. 93 (July 30, 2012) (confidentiality during

employer investigations)

- Fresenius USA Manufacturing, 358 NLRB No. 138 (September 19, 2012) (shielding

employee from discipline for misconduct while engaged in protected concerted activity)

- Costco Wholesale Corp., 358 NLRB No. 106 (September 7, 2012) (restriction in social media

policy against statements defaming, disparaging, or damaging the company held overbroad

restriction on Section 7 rights)

- Karl Knauz Motors, Inc., 358 NLRB No. 164 (September 28, 2012) (employer’s policy

encouraging courtesy to customers and coworkers held overbroad and unlawful)

- WKYC-TV, Gannet Co., 359 NLRB No. 30 (December 12, 2012) (overturning 50+ years of

precedent, held employers must continue to deduct and remit union dues following expiration

of a collective bargaining agreement)

- Alan Ritchey, Inc., 359 NLRB No. 40 (December 14, 2012) (NLRB holds for the first time that

an employer must bargain with a newly-certified union before imposing discretionary

employee discipline during the period before negotiating a first collective bargaining

agreement)

- Piedmont Gardens, 359 NLRB No. 46 (December 15, 2012) (overruling a 35-year old case,

Board holds that employers must provide unions with witness statements obtained during an

employer’s investigation of employee misconduct)



Now what?

NLRB requests remand of certain cases pending before courts of appeal

July 2014 – NLRB “ratifies” all administrative, personnel, and procurement actions

taken by improperly constituted Board – but not decisions

• Includes several Regional Director appointments

• Regional Directors in turn ratify all actions taken by them, including ULP complaints issued

and election results certified

• Problem solved?

NLRB to reissue decisions

• Same old, same old … or from bad to worse?

• Example: Don Chavas, LLC dba Tortillas Don Chavas, 361 NLRB No. 10 (August 8, 2014):

NLRB noted invalidity of Latino Express, Inc., 359 NLRB No. 44 (2012), which required

employers to gross up back pay awards to cover tax liability and to report back pay earnings

to SSA – NLRB “reconsiders” the issue and reaffirms principles as “effectuating the purposes

and policies of the Act”

Additional discussion of the constitutional law issues is available at SPB’s

Employment Law Worldview blog @ http://bit.ly/1k5RbC3


http://bit.ly/1k5RbC3



Employer Policies under Attack


The Governing Standard

Section 7 of the NLRA protects employees who engage in concerted activities for the

purpose of collective bargaining or other mutual aid or protection

Protections also apply to employer policies that restrict or impair, or may restrict or

impair, the exercise of rights protected by the Act

Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004)

If a rule explicitly restricts protected activity, it is unlawful

If it does not explicitly restrict protected activity, it is unlawful if –

• Employees would reasonably construe the language to prohibit Section 7 activity; or

• The rule was promulgated in response to union activity; or

• The rule has been applied to restrict the exercise of Section 7 rights

• Both an objective and a subjective component: did the employees construe the policy to

restrict protected activity, and would a reasonably employee interpret it to do so?

• Admonition in later cases that, when applying this standard, to review the policy as a whole,

and not to parse out individual words and phrases

Employer Policies Under Attack


Hills and Dales General Hospital, 360 NLRB No. 70 (Apr. 1, 2014)

Policy prohibiting “Negative Comments”

Company’s values and standards of behavior policy challenged

No “negative comments about our fellow team members”

Employees are to “represent [the company] in the community in a positive and

professional manner in every opportunity”

Employees “will not engage in or listen to negativity or gossip”

NLRB: each provision violated Section 7

Prohibitions against “negative comments” are per se unlawful

Rule requiring employees to represent the employer in the community “in a positive

and professional manner” also unlawful (reversing the ALJ)

Workplace Conduct & Behavior Rules


Laurus Technical Institute, 360 NLRB No. 133 (June 13, 2014)

No Gossip Policy

Policy prohibited discussing someone’s personal life when the person is not

present, talking about a person’s professional life without his supervisor

present, and creating or sharing rumors.

NLRB: too broad; too vague; ambiguous

Interfered with the school’s employees’ ability to exercise their Section 7 rights

Restricted employees from discussing or complaining about terms and

conditions of employment



Hoot Winc d/b/a Hooters of Ontario Mills, JD(ATL)-17-14 (May 19, 2014)

Rules Prohibiting Insubordination and Lack of Respect

Company rule provided that insubordination to a manager or lack of respect or

cooperation with fellow employees or guests may result in discipline

ALJ: too broad; too subjective

Chilling effect on the exercise of Section 7 rights

Even the rule prohibiting “disrespect to guests” was too broad and unqualified



First Transit, Inc., 360 NLRB No. 72 (April 2, 2014)

Discourteous or Inappropriate Behavior Policy

Prohibition against the use of company property for activities not related to

work: unlawful

Prohibition against “poor work habits,” including wasting time, loafing and

excessive visiting: unlawful

Prohibition against discourteous or inappropriate attitudes or behavior: unlawful

Prohibition against profane or abusive language that is uncivil, insulting,

contemptuous, vicious or malicious: lawful



Copper River of Boiling Springs, LLC, 360 NLRB No. 60 (Feb. 28, 2014)

Displaying a Negative Attitude

Rule prohibited employees from “displaying a negative attitude” when

interacting with coworkers or customers found to be lawful

The rule was limited to negative attitudes that are “disruptive to staff or [have] a

negative impact on guests.”

The grain of salt…



Flex Frac Logistics , LLC I and II, 358 NLRB No. 127 (Sep. 11, 2012); 360

NLRB No. 120 (May 30, 2014)

Company required employees to sign one-page employment at-will

agreement that in part prohibited employees from releasing “confidential

information” which included “personnel information and documents”

Employees were prohibited from disclosure of this information to persons

“outside of the organization.” Violations could lead to disciplinary action up to

and including termination

NLRB: applying Lutheran Heritage standard, policy held over broad and

infringement on employees’ Section 7 rights

Confidentiality Policies


MCPc, Inc., 360 NLRB No. 29 (Feb. 6, 2014)

Company handbook policy prohibited employees from dissemination of

confidential information within the company such as personal or financial

information and threatened disciplinary action up to and including termination

At a team building meeting an employee complained about a heavy

workload and that more employees should be hired. In course of discussion,

employee mentioned that if the company had not paid one of its new

executives $400,000, it could have hired more employees. Soon thereafter,

the employee was terminated

NLRB found the policy to be overly broad, and further found the Company

violated Section 8(a)(1) when it terminated the employee for violating the

overly-broad policy



Fresh & Easy Neighborhood Market, 361 NLRB No. 8 (July 31, 2014)

Company maintained a “Confidentiality and Data Protection Policy” in its Code

of Business Conduct” – not an employee handbook

Policy required that customer and employee information be kept secure and

that information be used “fairly, lawfully and only for the purpose for which it

was obtained”

ALJ found no violation, holding the Code was dedicated to ethical matters and

in no way resembled an employee handbook dealing with working conditions

NLRB rejected the ALJ decision finding the policy was overly broad and could

reasonably be construed by an employee to infringe on his/her Section 7 rights

Decision shows the importance of context and limiting language. The context

and its relationship to legitimate employers concerns must be clear and must

inform the employees that the rule’s scope its not as broad as it might seem



Tiffany and Co., JD(NY)-31-14 (Aug. 5, 2014)

Three policies at issue – one prohibited the disclosure of names, addresses, etc. of employees and

employee lists; the second required media requests be directed to the VP of Public Relations or

Investor Relations; the third prohibited disclosure of wage and benefit information

Case is most interesting for its discussion of the “savings clause” in the handbook

Savings clause that stated the policies did not apply to employees who “speak, write or

communicate with fellow employees … in the exercise of their statutory rights to organize or to act

for their individual or mutual benefit under the National Labor Relations Act….”

ALJ found the savings clause prevented a finding of a violation with regard to the policy on

disclosure of wages and benefits, finding the clause expressly addressed that policy. However, the

ALJ found the clause did not specifically reference the disclosure of employees names and

addresses, and did not specifically address the media inquiry provision

ALJ found that “an employer may not specifically prohibit employee activity protected by the Act

and then seek to escape the consequences … by a general reference to rights protected by the

Act”

ALJ also noted that as the drafter of the policies, it was incumbent on the employer to avoid any

lack of clarity



Target Corporation, 359 NLRB No. 103 (Apr. 26, 2013)

Policy prohibited Target associates from wearing “any buttons or logos on

[their] clothing (unless approved by [their] team leader).”

Employees’ right to wear union buttons protected since 1945 (Republic

Aviation), unless special circumstances exist

Special circumstances exist where the button may jeopardize employee safety,

damage equipment or products, exacerbate employee dissention or

unreasonably interfere with a public image which the employer has established

as part of its business plan through appearance rules for its employees.

Customer contact and uniform requirements (red shirt and khaki pants) not

special circumstances

Target permitted other buttons and pins without concern over public image

Dress Codes & Uniform Policies


World Color (USA) Corp., 360 NLRB No. 37 (Feb. 12, 2014)

Policy prohibited wearing baseball caps other than company-logo caps

Prohibited on its face wearing of caps with union insignia

Any rule that limits an employee’s right to wear a union insignia at work is

presumptively invalid

No special circumstances - no safety features in company cap; no legitimate

concerns over gang colors/insignias/activity; no customer interaction

Take-away: reasonable uniform policies or dress codes that place restrictions

based on legitimate business justifications will be deemed lawful; those that

seek to prevent employee expression without legitimate business justification

will not



HealthBridge Management, LLC, 360 NLRB No. 118 (June 22, 2014)

NLRB had issued a complaint against HealthBridge for alleged unlawful

activities

After the complaint issued, the Union prepared flyers and stickers - “Busted”

Employees directed to remove both the flyers and stickers

General rule is employees have a right to wear union insignias in the absence

of a special circumstance

The Board has a special rule for healthcare institutions

Restrictions in patient care areas are presumptively valid

Restrictions in non-patient areas are presumptively invalid

Selective enforcement will render a presumptively valid rule invalid



Rule restricting employees from being on the employer’s property when not

actively on duty.

Tri-County Medical Center, 222 NLRB 1089 (1976)

NLRB balances employer’s property rights with employees’ right to engage in

Section 7 activities.

An off-duty access policy is valid only if it:

limits access solely with respect to the interior of the facility and other working areas;

is clearly disseminated to all employees; and

applies to off-duty employees seeking access to the plant for any purpose and not just

to those engaging in union activity

Recent cases have focused on the third prong of Tri-County

Off-Duty Access Rules


Remington Lodge & Hospitality, LLC, 359 NLRB No. 95 (Apr. 24, 2013)

Rule prohibited employees from returning to the hotel before or after working

hours without authorization from their manager

NLRB: rule which preconditions management approval to engage in union or

concerted activity on the employee’s off-duty hours and in non-work areas is

presumptively unlawful



St. John’s Health Center, 357 NLRB No. 170 (Dec. 30, 2011)

St. John’s had a general policy that prohibited access to most of the interior of

the building

Rule did not prohibit off-duty access for all purposes; allowed attendance at

Health Center sponsored events, i.e., retirement parties, baby showers, etc.

NLRB: policy was unlawfully applied because it not uniformly applied to

prohibit access to off-duty employees seeking entry to the property for any

purpose

In other words, no good deed goes unpunished.



Sodexho America LLC, 358 NLRB No. 79 (July 3, 2012)

NLRB: to the extent a rule is ambiguous, it will be construed against the

drafter

Rule prohibited all off-duty access unless to visit a patient or to receive medical

care; NLRB held the rule did not violate third prong of Tri-County requiring that

the no access policy be uniformly enforced



Piedmont Gardens, 360 NLRB No. 100 (May 1, 2014)

“No employees are allowed inside the building when not scheduled to work

unless they have the prior approval of their supervisor/manager, Human

Resources or the Executive Director”

The Union representative wanted to meet with the HR Director to discuss some

issues and wanted several off-duty employees to attend. The request was

refused based upon the Company’s policy

NLRB: policy gave management “unlimited discretion” as to when off-duty

employees would be permitted on the premises, and thus was invalid



General Counsel Memorandum OM 12-59 (May 2012)

Addressed social media policies, unlike two previous General Counsel

Memoranda that discussed situations where employees were disciplined or

discharged for engaging in social media-related activity

Purported to delineate what the General Counsel believed employers could

lawfully prohibit within policies restricting employees’ use of social media

Included a sample “lawful” social media policy

Social Media


Kroger Co. of Michigan, JD-21-14 (Apr. 22, 2014)

Social media policy required that employees use a disclaimer whenever the

employees spoke on social media about work-related issues, clarifying that the

employee was setting forth his or her personal view and not speaking on behalf

of the company

ALJ: disclaimer requirement placed an “undue burden” on employees’ right to

communicate as protected by the Act

Other restrictions in Kroger’s social media policy prohibiting the use of the

Company’s intellectual property, and restricting online comments about

rumors, speculation, personnel matters, and the company’s business plans,

also were overbroad and unlawful

Social Media


Durham School Services, L.P., 360 NLRB No. 85 (Apr. 25, 2014)

NLRB sets aside employer win in a union representation election, partly

because of the social media policy in the employer’s handbook

Policies advised employees to “limit their contact with parents or school

officials” via social media, to keep any such contact “appropriate, professional,

and respectful,” and warned against “publicly sharing unfavorable information.”

ALJ: policies overbroad and vague, and tended to chill employees’ exercise of

protected rights because they did not define what type of conduct would

constitute violation of the policy; NLRB affirms

Hyperlinks and QR codes

Social Media


Landry’s, Inc., JD(SF)-31-14 (June 26, 2014)

NLRB General Counsel alleged that the following social media policy was

unlawful: • While your free time is generally not subject to any restriction by the Company, the Company

urges all employees not to post information regarding the Company, their jobs, or other

employees which could lead to morale issues in the workplace or detrimentally affect the

Company’s business. This can be accomplished by always thinking before you post, being

civil to others and their opinions, and not posting personal information about others unless

you have received their permission.

ALJ found this policy was lawful

And that’s all I have to say about that…

Social Media

What’s Ahead:

Key Labor Policy Issues Under Review


Initially proposed in 2011, then withdrawn after NLRB lost court challenge

Rules re-proposed in February 2014

Will shorten the time for employers to campaign against unionization to as few

as 10 days. No 25-day waiting period before holding an election

Employers will have to file a Statement of Position within 7 days or waive all

election-related issues

Will let workers vote even if eligibility is challenged, postponing challenges until

after the election

Employers will no longer have an automatic review of contested issues

Representation Case Rules - “Ambush Election”


Roundy’s, Inc., 356 NLRB No. 27 (Nov. 12, 2010)

Involves employer’s property rights and right to exclude non-employees from premises

Current standard comes from Sandusky Mall Co., 329 NLRB 618, 623 (1999)

NLRB: since the management of Sandusky Mall allowed general usage of its property by

outside groups, it could not make an exception for unions

Reversed on appeal (also Salmon Run): discrimination involves treating like groups differently

OK to allow Girl Scouts and exclude unions because Girl Scouts and unions are not like groups; not

discrimination.

NLRB held Roundy’s could not prevent union organizers from passing out handbills in

common areas adjoining its stores where the company held a nonexclusive easement;

it could only order organizers off store property where it held an exclusive easement

Complicated procedural history: oldest case current pending in front of the NLRB

(originally filed 2005); amicus brief deadline was in December 2010

Non-Employee Access


Purple Communications, Inc., Cases 21-CA-095151; 21-RC-091531; -091584

In Register Guard, a decision issued under the Bush administration in 2007, the Board

held employees have no statutory right to utilize employer-owned equipment or facilities,

including email systems, to engage in activity protected by Section 7 of the National

Labor Relations Act, including the right to form or assist a union in organizing an

employer’s employees

In Purple Communication, at issue was an employer policy that prohibited employees

from using electronic systems or equipment for non-work purposes

ALJ applied Register Guard and held the employer could lawfully limit the use of its email

systems in that manner

However, the NLRB’s General Counsel decided to appeal the ruling. The NLRB then

invited briefs from interested parties regarding issues presented in the case:

If the NLRB reverses the ALJ’s decision in Purple Communications and overturns

Register Guard, employees and perhaps even unions may be allowed to utilize

employer-provided email systems to organize

Given that many employers currently prohibit this type of use through employment

policies, such a decision would likely require that employers reevaluate and revise

employment policies limiting email use

Employee Use of Employer Email Systems


The current joint employer standard

Two or more business entities that are separate may be joint employers when they share

or codetermine those matters governing employees’ essential terms and conditions of

employment. Typically, this requires a showing that the putative joint employer

“meaningfully affects matters relating to the employment relationship such as hiring,

firing, discipline, supervision and direction.”

The new proposed standard

The NLRB’s General Counsel has urged the NLRB to adopt a broader standard. The

proposed new standard would find a joint employer relationship if “under the totality of

the circumstances, including the way the separate entities have structured their

commercial relationship, the putative joint employer wields sufficient influence over the

working conditions of the other entity’s employees such that meaningful bargaining could

not occur in its absence.” As the General Counsel described it, this would result in a

joint employer finding whenever “industrial realities” make an entity essential for

meaningful bargaining.

Potential huge impact in the employee leasing and temporary employee provider areas.

Joint Employer Standard


NLRB invited briefs on this issue in Browning-Ferris Industries (Case 32-RC-

109684)

On July 29, 2014, the NLRB General Counsel issued a press release

suggesting that he would seek to pursue unfair labor practice charges against

McDonald’s franchisees – as well as against the franchisor, McDonald’s USA,

LLC, as an alleged joint employer.

The announcement appears to be part of the ongoing effort to broaden the joint

employer standard. By publicly announcing an effort to target McDonald’s, the

General Counsel is signaling that he believes McDonald’s, as a franchisor, will

qualify as a joint employer under the new proposed standard. This has

significant implications not only for McDonald’s, but for all franchisors, as well

as other companies.

Joint Employer Standard


Northwestern University, Case 13-RC-121359

January 2014: CAPA files a petition seeking to represent scholarship football

players in collective bargaining (bargaining would be limited in scope)

NU and NCAA oppose – athletes not employees; contrary to the model of

amateur and collegiate athletics

March 26, 2014 – NLRB Regional Director issues decision finding that players

are more akin to employees than athletes and directs election

April 24, 2014 – NLRB grants NU’s request for review, but doesn’t stay election

(election held on April 25, 2014, but ballots impounded)

Impacts only private universities, not state schools

August 8, 2014 – O’Bannon v. NCAA – federal judge issues injunction

prohibiting NCAA from imposing rules restricting collegiate athletes from

profiting off of their name, image, or likeness: trend away from pure

amateurism – NLRB ruling next logical step?

Collegiate Athletics


Lew Clark

Partner

(602) 528-4065 [email protected]

Mike Hanna

Partner


Dan Pasternak

Partner


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National Labor Relations Board (NLRB) Update/media/files/... · employers to gross up back pay awards to cover tax liability and to report back pay earnings to SSA – NLRB “reconsiders”