Last week, the U.S. Court of Appeals for the D.C. Circuit reversed and remanded a pro-employee Board decision concerning an employee who had been discharged based on the “disparaging content” of the testimony he made before state legislators.

Back in October 2012, a bargaining unit employee of Oncor Electric Delivery Company (Bobby Reed) testified before a Texas senate committee that had been tasked with studying the impact of utilizing digital metering devices installed in customer homes by utility companies like Oncor. At the time of Mr. Reed’s testimony before the committee, Oncor and the union were engaged in collective bargaining, and Mr. Reed had informed Oncor that he would testify about the digital meters if the union did not obtain a favorable result in the collective bargaining.  When bargaining stalled, Mr. Reed testified at the hearing, during which he stated that the digital meters were causing damage to customers’ homes.

Oncor investigated Mr. Reed’s claim about the digital meters causing damage to customer homes and determined this assertion was incorrect. As a result, Oncor terminated Mr. Reed for providing false testimony.  The National Labor Relations Board subsequently found that the discharge violated Section 8(a)(3) of the National Labor Relations Act, as it constituted interference with Mr. Reed’s protected union activities.  Oncor appealed to the D.C. Circuit.

In reversing the Board’s decision and remanding, the Court based its decision on the Board’s woefully deficient analysis under the Jefferson Standard test.  Under that test, disparaging statements made to third parties (about an employer) are protected if:  (1) the employee making the statement indicates the communication is related to an ongoing dispute between the employees and the company; and (2) the communication is not so disloyal, reckless or maliciously untrue as to lose the Act’s protection.  In its decision, the Board (admittedly) failed to address the first requirement.  Accordingly, the Court found the Board’s reasoning “too opaque to resolve whether it is supported by substantial evidence.”

Thus, the Court remanded the matter back to the Board for further proceedings, where the primary issue will be whether Mr. Reed’s testimony provided an adequate indication of its connection to Oncor’s labor dispute with the union. Importantly, the Court – in providing what it called “guidance for the remand” – analyzed the content of Mr. Reed’s testimony, as well as the surrounding context, and rejected a number of the NLRB’s arguments as to whether the testimony sufficiently signaled any connection to the actual labor dispute.

Oncor – and employers in general – have good reason to hope for a favorable result on remand. With the recent change to a Republican majority, the five-member Board has shifted ideologically to a more pro-employer lineup.  And on remand, the Board has been instructed by the Court to – as part of determining the merits issue concerning Mr. Reed’s testimony – clarify which party bears the burden on the first requirement of the Jefferson Standard test (an issue the Board has never previously decided).  As a result, the Board will not only be determining the specific fate of Oncor in this case, but will also be impacting the future application of Jefferson Standard to all employers who discipline or discharge employees for disloyalty or disparaging statements.

 

From Justice Kagan’s observation that a decision in favor of the plaintiff could affect millions of public sector workers to Justice Alito’s surprise at seeing a union brief include an argument that the Constitution originally did not grant public employees free speech rights, the U.S. Supreme Court was full of impassioned discourse during Monday’s oral arguments in Janus v. American Federation of State, County, and Municipal Employees, Council 31, et al. Despite the many insightful questions and comments directed to the four attorneys arguing before the Court, the voice of the one person each attorney was trying to convince was never heard.

Justice Gorsuch is likely the deciding voice at the conference table in Janus. The same issue – whether requiring public sector employees to pay union fees (“fair share” or “agency” fees) unconstitutionally compels speech – was previously before the Court in Friedrichs v. California Teachers Association. However, the Court was unable to enter a precedential decision because of a four-four split on the issue after Justice Scalia’s death. Now the question of whether to overturn Abood v. Detroit Board of Education, which allowed such fees in 1977, is again directly before a full Court.

A decision in favor of overturning Abood would mean that public sector employees could choose to stop paying agency fees. From the employee’s perspective, the ability to withhold those payments is a constitutional right because funding collective bargaining is inherently political speech. From the union’s perspective, fees that only fund collective bargaining over employment matters such as wages and benefits are analogous to an employee individually addressing those things to his/her government employer, which the Court has held is not constitutionally protected free speech.

A few of the Justices noted the consequences such a holding could have on existing collective bargaining agreements as a reason to uphold Abood, based on the principle of reliance on the former decision as a reason to uphold that precedent. In response, plaintiff’s counsel emphasized the predominance of this practice as a reason for reversing Abood, if it does not meet constitutional muster.

Justice Gorsuch has not been shy about participating in oral arguments during his tenure on the Supreme Court Bench. Thus, Monday’s silence in this important case was likely a tactical decision to listen, think, and analyze instead of asking questions that might stoke additional speculation about his views.

Because of that silence, we are left with interesting tidbits about Justice Kennedy’s argument preparation habits (apparently perusing a relevant 1961 concurrence the night before argument) and thoughts of whether a modern framework would change the result of Marbury v. Madison (Justice Breyer’s skepticism of applying a “modern framework” in this case led to his wondering if similar attempts would go back to the source of judicial review) but with little insight into the possible content of a majority or plurality opinion.

Husch Blackwell’s Labor and Employment team is monitoring the case and will provide you with a prompt analyze of the decision in Janus once it is released. Please contact the Labor and Employment team with any questions.

The National Labor Relations Board found that a union committed an unfair labor practice by repeatedly blocking ingress and egress to a hotel for periods of one to four minutes. The opinion provides details about the union’s picketing efforts as a part of an organizing campaign. The blockage occurred during at least ten separate occasions over the course of more than a month. The Board adopted the ALJ’s decision holding that the picketers’ actions of standing in front of vehicles for minutes at a time, many driven by hotel valets, attempting to enter and/or exit the hotel violated Section 8(b)(1)(A) of the National Labor Relations Act.

As the dissent notes, this decision is significant because there were no allegations of violence and because the blockage lasted such short periods of time. Regardless, the Board determined that the union’s repeated, intentional blockage of drivers, including employees, would reasonably tend to coerce or intimidate employees in the exercise of their Section 7 rights.

Although injunctive relief was not sought in this situation, the NLRB’s decision in Unite Here! Local 5 (Acqua-Aston Hospitality, LLC) provides management with support for prompt relief in similar circumstances. Contact Husch Blackwell’s Labor and Employment team with any questions or to discuss options for responding to union activity in your business.

As anticipated, the nationwide trend of enacting “right-to-work” (RTW) legislation has continued to grow – in the past few years alone, Indiana, Michigan, Wisconsin, West Virginia, and Kentucky have joined the growing list of RTW states. In these states, and the approximately twenty others that have adopted RTW legislation, employers are prohibited from requiring employees to join a union or pay union dues as a condition of employment. Although Missouri adopted RTW legislation in 2017, it is currently postponed and will be subject to a public vote in 2018.

Pundits have long claimed that over time, RTW laws tend to weaken a union’s bargaining power by slowing chipping away revenue and support from employees who do not wish to be represented and elect not to join the union. For example, Wisconsin – which was once among the strongest union states in the nation – has seen a drop in its private sector union membership from nearly 16% in 2009 to just 8.1% in 2016, which is below the national average hovering around 11%. Union membership has similarly dropped in most other RTW states over time.

Of course, RTW legislation does not prevent unionization of private sector workplaces. Employees still have the right of self-organization, the right to join, form, or assist labor organizations, and the right to engage in lawful, concerted activities for the purpose of collective bargaining or other mutual aid or protection.  Additionally, employees who are in the bargaining unit but do not pay union dues are still entitled to all the same benefits under the labor contract as their dues-paying counterparts. Despite these protections under federal law, adoption of RTW legislation at the state level has been and continues to be welcome news for employers nationwide.

 

On December 14, 2017, the National Labor Relations Board (the “NLRB” or the “Board”) overruled Obama-era precedent involving two highly controversial decisions governing employee handbooks and joint employment standards.

Earlier this year, President Trump appointed two Republicans to the five-member NLRB resulting in a 3-2 Republican majority for the first time in a decade.  As anticipated, the new “Trump Board” is beginning to dismantle a series of decisions that many believed to unfairly favor unions.

New Standard Governing Employee Handbooks

In a split 3-2 decision, the Board majority in  . overturned its 2004 Lutheran Heritage standard, which had been used in recent years to render countless employer policies and rules unlawful.  The former standard provided that a policy or rule is unlawful if employees could “reasonably construe” the language to bar them from exercising their rights under the NLRA, such as discussing terms and conditions of employment.  For the past several years, the Lutheran Heritage standard has been heavily criticized for failing to take into account legitimate business justifications associated with employer policies, rules and handbook provisions in addition to yielding unpredictable and sometimes contradictory results.  For example, the standard has deemed unlawful policies that require employees to “work harmoniously” or conduct themselves in a “positive and professional manner.”

Continue Reading NLRB Overturns Pro-Union Precedent Governing Employee Handbooks and Joint Employers

The NLRB today announced it is requesting Information from interested parties regarding whether or not the 2014 Election Rules should be retained in any fashion or at all.  No doubt this is a heads up that these rules are going to have a short life span with the Agency.  This will be a very public battle and further information regarding the Board’s actions will be made available as they develop.

It is not unusual on construction sites, where you have a variety of different employers present, that disputes erupt that impact the entire work site. Sometimes this can result in a number of different forms of employee protest and this decision by an Administrative Law Judge, which issued on December 8, 2017, provides a good framework for analyzing what is lawful versus unlawful conduct by an employer in responding to such activity.

Continue Reading NLRB – Project Manager at Work Site May Lawfully Monitor Misconduct

Peter Robb, the new General Counsel for the NLRB, issued GC Memo 18-02 on December 1, 2017 that puts the Regional Offices on notice that any “significant legal issues” are to be submitted to Advice. Significant legal issues are defined to “include cases over the last 8 years that overruled precedent and involved one or more dissents, cases involving issues that the Board has not decided, and any other cases that the Region believes will be of importance to General Counsel.”  The Memo goes on to further cite specific examples of Board Decisions that might support issuance of complaint “but where we also might want to provide the Board with an alternative analysis.”  Not surprisingly, these decisions go to a number of cases in which the Obama Board expanded their regulation regarding concerted activity, handbook rules, work stoppages, Weingarten rights, the joint employer standard, unilateral changes, and dues checkoff, among other matters.  No doubt that with this Memo the way in which the workplace will be regulated by the NLRB will be subject to a number of long awaited changes.

In SouthCoast Hospital Group, Inc. the NLRB originally found that the Hospital violated 8(a)(1) and (3) of the Act by maintaining and enforcing a hiring/transfer policy (HR 4.06) in which the Hospital gave preference to unrepresented employees over represented employees when filling positions at its non-union facilities.  The Hospital, in responding to these allegations at hearing, stated that it was simply trying to make the playing field level, as under the collective bargaining agreement, those employees who were under its coverage had a preference over non-union employees in filling such positions.  The Board supported the Administrative Law Judge’s finding that, under NLRB v. Great Dane Trailers, the Hospital failed to establish a legitimate and substantial business justification for the rule’s maintenance and enforcement.  Member Miscimarra dissented over the reasoning of the other panel members in this matter and, on appeal, the First Circuit endorsed Miscimarra’s position in finding that the Hospital’s reasoning was legitimate and not unlawful.  In particular, the First Circuit reminded the Board that “[I]t is neither our function nor the Board’s to second guess business decisions.  While the Board remains free to reject that proper business justification on the grounds that it is illogical, or that it is not reasonably adapted to the achievement of a legitimate end, it may not invalidate an employment policy that accomplishes a legitimate goal in a non-discriminatory manner merely because the Board might see other ways to do it.”  The Court then went on to state that, “SouthCoast adopted HR 4.06 in an effort to treat its union and non-union workers more evenhandedly when filling vacant positions.  HR 4.06 achieves this goal by treating non-union employees more like union members than they otherwise would be treated.  Because SouthCoast’s chosen method was reasonably adapted to achieve its stated goal, the Board lacked the power to reject HR 4.06 simply because it is not identical to the union hiring policy or because SouthCoast might have achieved its goals through alternative means that were more beneficial to its union employees.”

While the Board adopted the First Circuit’s decision as the law of the case, obviously it did so with great chagrin.  Hence, others adopting this policy in jurisdictions outside the scope of the First Circuit should take heed, as the Board may press this issue once again.

The U.S. Solicitor General changing positions, the NLRB issuing a follow-up letter to oral arguments and the grave observation that a ruling for employees would invalidate agreements covering 25 million employees all reflect the contentious nature of the consolidated cases before the Supreme Court challenging the ability of an employee and employer to agree to limit resolution of legal claims to individual arbitration.

Continue Reading The Enforceability of Arbitration Agreements Covering 25 Million Employees Wait on a Divided Supreme Court