Imagine: in a region where hiring and retaining competent employees is becoming increasingly difficult, a multi-national company announces it will build a plant and employ more than 10,000 workers over the next few years. The pressure to get and keep your best employee has just increased, and the ripple effect touches every aspect of this competitive employment situation. Seeking to maintain your competitive position at a time when employees are being wooed to leave, you may want to explore using noncompetition and nonsolicitation agreements, but are they enforceable? What happens when a well-qualified employee applies for an open position, but informs you that she signed a noncompetition, nondisclosure agreement with her current employer? How will that impact your hiring decision?
More and more it seems disputes are occurring over what information the EEOC may subpoena from employers. On April 3, 2017, the U.S. Supreme Court issued its ruling in McLane Co. v. EEOC, weighing in on the standard of review on appeal when district courts either enforce or quash an EEOC subpoena. Last week in a post on our Technology, Manufacturing & Transportation Industry Insider, Stephen Cockerham and Leslie Brockhoeft discussed the process of appealing such an issue and provided insight and background on the case itself.
In a prior post, we discussed the Department of Labor’s issuance of a new final rule that expanded disclosure requirements for companies that hire union avoidance consultants. The Department’s new “persuader” rule required employers to report the hiring of such consultants whenever these third parties engaged in indirect persuader activities (e.g., planning employee meetings, training supervisors to conduct meetings, and drafting or providing speeches to be made to employees), whereas the previous rule required disclosure only when the consultants engaged in direct contact with workers.
Subsequent to the DOL’s publication of the final version of the rule in late March, business groups and law firms sued to invalidate the rule. Several states joined the case later as intervenors. On November 16, a federal judge in Texas entered a “permanent injunction with nationwide effect,” blocking the DOL from enforcing the rule. Judge Sam R. Cummings of the Northern District of Texas, had previously issued a preliminary injunction relating to the rule back in June. In that earlier ruling, the Court had found that the rule effectively eliminated the Labor Management Disclosure Act’s advice exemption, was arbitrary capricious, and constituted an abuse of discretion. In last week’s decision, the Court granted the Plaintiffs’ summary judgment motions and converted the preliminary injunction into a permanent injunction.
The Obama administration now faces the decision of whether to appeal the ruling, as they did with the Court’s preliminary injunction. However, it is unlikely that the Fifth Circuit Court of Appeals would make any rulings on these issues prior to the inauguration of President-elect Donald Trump, after which the Department’s positions and strategy may change dramatically. We will continue to keep you apprised of developments related to the persuader rule.
On March 23, the Department of Labor released the final version of its controversial and expansive rule that changes the disclosure requirements for labor relations consultants who aid employers with their union avoidance measures.
What Does That Mean to Employers?
Previously, a consulting firm was required to disclose activity to the DOL only when it engaged in direct contact with workers regarding labor organizing campaigns. Now, under the Department’s new “persuader” rule, the hiring of an attorney or consultant to thwart organizing attempts must be reported whenever the third-party consultant engages in persuader activities that go beyond the plain meaning of advice, regardless of whether there is direct contact with employees. This rule encompasses typical work conducted by outside consultants. It includes, for example, planning employee meetings, training supervisors or employer representatives to conduct meetings, drafting or providing speeches, and other common persuader activities.
Legal Challenges Underway
At least two lawsuits have already been filed against the DOL in federal court challenging the new rule. The National Association of Manufacturers (NAM), along with several business groups, filed suit in the Eastern District of Arkansas. Similarly, a coalition of law firms has filed suit in the District of Minnesota. The challengers have asserted a number of arguments, including claims that the rule: violates the First Amendment; is overbroad; exceeds the DOL’s authority; and, importantly, infringes attorney-client confidentiality protections.
Only time will tell whether any of these legal attacks will prove successful in dismantling the new “persuader” rule. For now, the rule remains in place, and employers must follow it. However, employers should remember that agreements where a consultant merely agrees to provide “advice” are still exempt from the reporting requirement. For example, mere recommendations regarding a company’s decision or course of conduct need not be reported.
Check back in for updates as this litigation develops, and do not hesitate to contact our firm with any specific questions on how this new rule may affect your company’s practices.
On January 25, 2013, the D.C. Circuit Court invalidated President Obama’s three appointments to the National Labor Relations Board. The decision in Canning v. NLRB not only calls into question the “recess appointment” power of the President, but could paralyze the NLRB by putting hundreds of decisions in jeopardy.
Presidents have made so-called recess appointments for decades. The Constitution expressly gives this power to the President, allowing him to fill executive vacancies when the Senate is not in session. President Obama did just that when he named three members to the NLRB in 2012. Some argue that this power is used solely to avoid Senate confirmation (or more likely, rejection) of an appointment. Others argue that it’s just plain necessary.
The D.C. Circuit did not stop at invalidating the NLRB appointments (and an appointment to the Consumer Financial Protection Bureau), but essentially removed the power in its entirety. The ruling effectively held that the Senate was not really in recess when the appointments were made, and that President Obama exceeded his authority in naming the NLRB members at that time. Further, the opinion suggests that true recesses need not ever happen, as the Senate could convene for a few days in a “pro forma” session, effectively putting the kibosh on any future Presidential recess appointments.
Sound melodramatic? It’s not. This is major, folks. What this ruling means from a labor standpoint is that the big decisions the NLRB has put out this past year could be in jeopardy. We’re talking social media policies, blanket confidentiality policies, at-will disclaimers . . . you name it. We wait with baited breath for the inevitable challenge and political tug-of-war that will follow this decision. Stay tuned.
Recently, the NLRB has issued a number of decisions addressing social media in the workplace as it pertains to employers. Last month, however, an NLRB judge rendered a decision addressing a Union’s potential liability and responsibilities for social media activities on its own Facebook page. Interestingly, the judge addressed the posts and comments of the Union’s members, rather than the Union itself. As a result, questions remain regarding whether this analysis applies only to a union, or whether it will apply similarly to an employer and the acts of its employees.
In Amalgamated Transit Union, Local Union No. 1433, AFL-CIO, Case 28-CB-78377, JD(ATL)-33-12 (ALJ Op. Nov. 28, 2012), the Union, which represents a bargaining unit comprised of bus operators, was charged with violating the National Labor Relations Act (“NLRA”) for the threatening statements made by the Union’s members on the Union’s Facebook page. The government alleged the Union had a duty to disavow any threatening statements, and because it failed to do so, its failure amounted to a restraint on the employees’ Section 7 right not to engage in union activities, in this case, a strike.
Regarding the threats, individual Union members threatened employees with less favorable union representation and violence if they refused to participate in the labor strike. For instance, on the first day of the strike, a Union member posted:
- “THINKING of crossing the line. THINK AGAIN!”
- “THINK about the future. When WE return, YOU will be gone. It is a fact that in union strikes across the nation that within six months after the strike ends that 90% of the workers that crossed the line are no longer employed there.”
- “THINK that the union will protect you. They may have to represent you, but will they give it 100%.”
In response to this post, one employee commented that he suffered from an eye condition and could not afford to lose his insurance because of the strike. In response, a Union member commented that if the employee crossed the picket line he would “lose his eyesight” from two black eyes. On the second day of the strike, the Union’s Vice President discussed holding a picket line at the hotel where the company’s replacement employees were staying. In response, one member commented, “[c]an we bring the Molotov cocktails this time?”
The government alleged that the Union had a duty to disavow these threats and relied on case law for the proposition that a Union is responsible for the acts of its members on a picket line when it fails to take corrective action. Thus, the government argued, because the website is an extension of the picket line, the Union was responsible for disavowing the threats made on its Facebook page. Failure to do so constituted a violation of the NLRA.
The judge rejected this argument and found marked differences between an actual picket line and a website. For instance, whereas a picket line communicates a public message from a Union, a Facebook page is private. Additionally, the judge found that hundreds of thousands of websites contain discussions that do not express the opinions of the host. Moreover, the judge found that requiring the union to disavow the posts amounted to compelled speech and implicates the Union’s First Amendment free speech concerns regarding the right to refrain from speaking. For these reasons, the judge found the Union had no duty to disavow the threatening posts and therefore had not violated the NLRA.
While this decision is good news for labor unions, it is unclear whether the NLRB will hold an employer to the same standards with respect to a company’s Facebook page. Notably, the allegations against the Union did not involve any officers or agents of the union, but rather, its individual members. Accordingly, until the NLRB decides this issue in the context of an employer’s social media page, employers must be diligent in monitoring not only the “official” posts on their social media websites, but also the contents of posts made by employees or other third parties.
On September 28, 2012, the National Labor Relations Board (“NLRB”) issued its decision in Karl Knauz Motors, Inc., 358 NLRB No. 164 (2012). The NLRB affirmed an Administrative Law Judge’s findings that a car dealership did not violate the National Labor Relations Act (“Act”) after it terminated a salesperson for his posts on Facebook. In making its decision, however, the NLRB left undecided the arguably larger question of distinguishing social media posts that the Act protects from those it does not. Unfortunately, that question is now left for employers who must carefully evaluate an employee’s social media activity before taking disciplinary action.
Last September, an Administrative Law Judge upheld the termination of car salesman Robert Becker after he posted pictures and captions on his Facebook page mocking a car accident that occurred at his employer’s Land Rover dealership. What made the decision interesting, however, is the fact that Becker alleged his termination was the result of another set of Facebook posts that had nothing to do with the Land Rover accident.
In one set of Facebook posts, Becker ridiculed his employer’s launch event for a new BMW automobile. Specifically, Becker posted pictures and comments mocking the dealership’s decision to have a hot dog cart and serve cookies and chips instead of something more formal. In the second set of Facebook posts, Becker posted pictures and made flippant remarks about a car accident that had occurred at his employer’s Land Rover dealership across the street. Apparently, a salesperson at the dealership allowed the child of customer to get behind the wheel of a Land Rover. The child subsequently engaged the vehicle and crashed it into a pond. Becker posted the comments and pictures of both events at the same time. Two days later, management called him into a meeting about the Facebook posts and subsequently terminated his employment.
Becker argued that he was terminated for the posts about the launch event, and further argued that those posts were protected under the NLRA as they related to the terms and conditions of his employment. Becker testified before the judge that he believed the food served at the launch event could have negatively affected his commissions. In contrast, the dealership asserted that it terminated Becker primarily for the Land Rover posts, and making light of a serious situation.
The judge agreed with Becker that his posts about the food served at the launch event were protected activities under the Act. Specifically, the judge found the food offerings at the event could have had an adverse effect on his compensation or the ratings given to him by the dealership’s clientele. The judge admitted this was unlikely, but nevertheless, found that the food decisions could affect Becker’s employment relationship. As a result, the judge found Becker’s posts about the food were protected, and as such, Becker could not be terminated for those posts.
The judge also found, however, that the Act did not protect the posts about the Land Rover accident, as they did not relate to the terms or conditions of Becker’s employment. Moreover, the judge found the testimony of the dealership’s management to be more credible, and because the dealership asserted that it terminated Becker solely for the Land Rover posts, the decision to terminate Becker for that reason did not violate the Act. Therefore, the judge upheld the termination.
In affirming the judge’s decision, the NLRB found it unnecessary to address whether the posts about the food at the sales event were protected. In doing so, the Board left unanswered the question regarding the types of activities relate to the terms and conditions of employment, and as a result, are protected by the Act.
What this means to you
Becker’s posts mocked the dealership’s decision about the food served at an event. Unlike an employee who complains about their pay or working conditions, Becker’s activity was not expressly related to the terms or conditions of his employment. Accordingly, it will be vital for employers going forward to carefully consider whether an employee’s social media activities might relate to the terms and conditions of his or her employment and how the basis for the disciplinary decision is articulated when the conduct at issue includes activity that is and is not protected by the Act.
In a 2-1 decision in Sodexo America LLC, the National Labor Relations Board (NLRB) held recently that the University of Southern California hospital violated Section 8(a)(1) of the National Labor Relations Act by maintaining and enforcing a rule that limited off-duty employee access to the workplace, except for specific purposes.
The policy at issue provided that:
- Off-duty employees are not allowed to enter or re-enter the interior of the hospital or any other work area outside the hospital except to visit a patient, receive medical treatment or to conduct hospital-related business.
- An off-duty employee is defined as an employee who has completed his/her assigned shift.
- Hospital-related business is defined as the pursuit of the employee’s normal duties or duties as specifically directed by management.
- Any employee who violates this policy will be subject to disciplinary action.
The NLRB applied the three-part test from its 1976 ruling in the seminal case on off-duty employee access, Tri-County Medical Center, to the “hospital-related business” exception of the policy and found that USC hospital’s provision violated the National Labor Relations Act (NLRA). The three part test upholds policies that:
- Limit access solely with respect to the interior of the facility and other working areas.
- Are clearly disseminated to all employees.
- Apply to off-duty employees seeking access to the facility for any purpose and not just to those engaging in union activities. (emphasis added)
In Sodexo, the NLRB held that the “hospital-related business” exception to the no access policy provides management with unfettered discretion to permit off-duty employees to enter the facility “as specifically directed by management.” Applying both Tri-County and a more recent case involving St. John’s Health Center (357 NLRB No. 170) to the hospital policy’s “hospital-related business” exception, the NLRB held it violated Section 8(a)(1) of the NLRA because it does not uniformly prohibit access to off-duty employees seeking entry to the property for any purpose. In other words, the NLRB held that the policy bans off-duty employees from the premises except for when management gives them the okay. Management reserving this level of discretion for itself was held to run afoul of the NLRA.
Interestingly, the majority decision also rejected the argument that the no-access policy’s exceptions for visiting patients or seeking medical treatment ran afoul of the NLRA. In doing so, the NLRB noted that the purpose for which the individuals seek access to the facility under those exceptions is as a member of the public, not as an employee, and access is granted or denied on the same basis and under the same procedures as for members of the public. This reasoning is consistent with prior NLRB precedent.
What This Means to You
When unions seek to represent your employees, they scrutinize your policies and procedures for possible deficiencies, especially under the NLRA. Given the NLRB’s current focus on rewriting the rules on workplace policies, now is a good time to review and revise your policies, as necessary. We provide such service to many of our client on a regular basis and know the common missteps than need to be avoided.
The acting general counsel for the National Labor Relations Board (NLRB), Lafe Solomon, has addressed a number of workplace topics, including social media policies, at-will employment statements and class action waivers in arbitration agreements. In addition, a new NLRB webpage describes the rights of employees, even if they are not in a union. Both of these activities demonstrate that the labor watchdogs are not taking a summer vacation – and neither should diligent employers. Social Media Policies On June 11, 2012, Solomon said approximately 100 social media-related unfair labor practice charges were pending at the NLRB. This should not be surprising news for anyone following the agency’s activity over the past year. Since August 2011, the NLRB has issued three guidance memoranda on the issue. In these memoranda, the acting general counsel explains what social media actions are protected by the National Labor Relations Act (the Act) and what types of employer policies on social media violate the Act. Notably, Solomon pointed out that his most recent memorandum (issued May 30, 2012) contained the full text of an approved social media policy and provided guidance for employers struggling to develop guidelines that would withstand a challenge under the Act. At-Will Employment Statements Solomon also talked about employers’ use of at-will disclaimers in employee handbooks. Specifically, he discussed a controversial complaint issued earlier this year by the NLRB in Phoenix, Ariz. The complaint alleged that a number of an employer’s policies were unlawful, including an at-will statement similar to those used by employers nationwide. Solomon explained that he did not approve of this complaint before it was issued, but rather became aware of it later. He stated that, in his view, an employer would not violate the Act if the employer simply told its employees that they were employed at-will. He suggested that it would also not be unlawful for an employer to tell its employees that the at-will nature of their employment cannot be changed by an oral statement alone. Solomon explained that this particular employer’s at-will statement went too far because it implied that unionization would not change an employee’s at-will status. Many employers agree to “just cause” provisions in collective bargaining agreements with unions, which alter the at-will status of employment. For this reason, Solomon said, the employer at issue in the Arizona case was in potential violation of the Act. Solomon said the case had been settled, so the NLRB’s theory would not be further tested at this point. Class Action Waivers Finally, Solomon addressed the recent conflict between the NLRB’s decision in D.R. Horton, which held that an employer’s arbitration agreement violates the Act when it requires employees to waive the right to arbitrate as a class, and the U.S. Supreme Court’s decision in AT&T Mobility v. Concepcion, where the court held that the Federal Arbitration Act authorizes precisely such waivers. Solomon stated that he saw no conflict between the decisions because, in his view, the Act pre-empts the Federal Arbitration Act. He did acknowledge, however, that most federal courts considering the issue disagreed, holding instead that Concepcion overrode D.R. Horton. What This Means to You Recent NLRB statements regarding employers’ social media policies, at-will employment disclaimers and class action waivers should serve as a reminder to employers who have not updated their policies in recent years that such updates may now be warranted. At a minimum, employers are encouraged to review their social media policies and ensure that they are narrowly tailored to the employer’s business needs and corporate culture. At-will statements must not be overly broad or imply that unionization would be futile for employees. Other policies should also be reviewed with an eye toward employees’ rights under the Act. This way, employers may be able to avoid unfair labor practice charges alleging that the employer is impinging upon employee rights.