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?
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.