Employer Labor Relations Blog

The Big Impact from Nixed Recess Appointments: Supreme Court’s rejection of President Obama’s NLRB picks could upset hundreds of decisions.

Posted in Current Events, NLRB

By:  Kenneth R. Dolin, Esq.

The U.S. Supreme Court last month decided the Noel Canning case, unanimously holding that President Obama’s proposed recess appointments of Terrence Flynn, Sharon Block and Richard Griffin to be members of the National Labor Relations Board (Board) were unconstitutional. The Court reasoned that the brief Senate break in January 2012, during which time the appointments were made, was of insufficient length to be a “recess.” Thus, the Court found the Board order against the soda pop bottling company, Noel Canning, was invalid because the Board lacked a quorum, as three of its five members were improperly appointed.

Noel Canning will have a significant impact on the board. Hundreds of board decisions between January 2012 (when the appointments were made) and August 2013 (when new appointees were confirmed by the Senate) will likely be invalidated and reconsidered by the current Board, which now has a full contingent of five Senate-confirmed members.

Chairman Mark Gaston Pearce issued a brief statement shortly after the Noel Canning decision issued, acknowledging the possibility that the Board cases in which the January 2012 recess appointees participated may have to be revisited. Further, NLRB general counsel Richard Griffin recently stated that the Board has already taken action in about 100 cases pending in federal appellate courts, settling decisions in almost 50 cases and asking federal courts to remand dozens of other cases to the Board.

Among the decisions directly impacted by Noel Canning that the Board will likely revisit are those involving such contested issues as: (1) an employer’s ability to promulgate rules regulating employee behavior at the workplace and on social media; (2) to limit access to its premises by off-duty employees; (3) to discontinue deductions of union dues after expiration of its collective bargaining agreement; (4) to obtain a mandatory arbitration agreement with a class action waiver; (5) to not continue granting wage increases after the expiration of a collective-bargaining agreement; (6) to impose discipline on employees during first contract negotiations; (7) to refuse to provide witness statements to a union during the employer’s internal investigation of employee misconduct; and (8) to instruct employees to maintain confidentiality during internal workplace investigations.

It is unlikely, however, that the results will differ materially even if the current Board revisits all the decisions issued by the former Board comprised of the invalidly appointed recess appointees because the current Board, like the prior Board, remains comprised of a majority of Democratic appointees.

That said, there is no guarantee that all decisions will be decided identically, and at the very least, revisiting these cases will certainly hamper the current board’s ability to decide pending cases.

In addition to the case decisions that will likely be invalidated, any administrative action in which the recess appointees participated may also be invalidated, including the appointments of regional directors and administrative law judges as well as perhaps even the delegation of Board authority to the general counsel regarding temporary injunction proceedings. It can be argued that all official actions by the Board during the prior period when it lacked a three-member quorum were invalid.

Thus, it is possible that decisions issued by improperly appointed Regional Directors and administrative law judges may be found invalid as well.

All told, the effect of Noel Canning is likely to be significant, invalidating numerous board decisions and hampering the Board’s ability to decide new cases, though this delay will likely not prevent the Board from issuing its new representation election rule, which would significantly shorten the union election period, before year end.

Likewise, it is unlikely that Noel Canning will impact the General Counsel’s emphasis on using temporary injunctive relief for first-contract bargaining cases, unlawful discharges in organizing campaigns and successor cases involving the successor’s refusal-to-hire union-represented employees.

It remains to be seen whether the effect of Noel Canning will prevent the current board from issuing decisions in ongoing cases before year end concerning such currently contested issues as (1) whether college football players are employees; (2) an employer’s right to prevent its employees from using its e-mail system for union and other protected, concerted purposes; (3) an employer’s right to refuse to provide financial information to a union when it does not claim an “inability to pay;” (4) whether the post-arbitral deferral standard should be more limited; (5) whether the joint employer standard should be broadened; (6) whether a “perfectly clear” successor should have a broader obligation to bargain with the union before setting initial terms of employment than it does presently; (7) the legality of any aspect of a “neutrality” or card check agreements or other pre-recognition agreements: and (8) the rights of contractor employees, who work on other employer’s property, to have access to the premises to communicate with workers or the public.

Portions of this article were excerpted from Mr. Dolin’s article, which was published in the July 21, 2014 edition of The National Law Journal, reprinted with permission. 

 ©2014 ALM Properties, Inc. All rights reserved.  Further duplication without permission is prohibited.

NLRB Announces Intent To Become Involved In The Commercial Marijuana Business

Posted in Current Events, NLRB

By: Candice Zee

As employers have been watching the Board issue decision after decision holding common-place employment policies unlawful, consider expanding its jurisdiction to include religious schools, graduate students, student athletes, and try to recreate the “joint employer doctrine,” these employers repeatedly have found themselves wondering: “What are these guys smoking?” We may never know the answer to that question, but we do know that the Board now wants to regulate the commercial marijuana business.

On August 6, the Board’s General Counsel’s Division of Advice released an Advice Memorandum stating that 1) the Board should assert jurisdiction over employers in the medical marijuana industry and 2) workers who are primarily involved in processing marijuana plants rather than harvesting them are not agricultural workers, but employees under the National Labor Relations Act (the “Act”). (Northeast Patients Grp., NLRB Div. of Advice, No. 1-CA-104979, 10/25/13 [released 8/6/14]). The Division of Advice issued the memorandum after the United Food and Commercial Workers (“UFCW”) filed several unfair labor practice charges against Maine’s largest medical marijuana provider, Wellness Connection, in May and June 2013.

The memorandum, authored by Board Associate General Counsel Barry J. Kearney, determined that an enterprise in the medical marijuana industry is within the Board’s jurisdiction so long as it meets the Board’s monetary jurisdictional standards. The Division of Advice opined that the enterprise and employer at issue clearly met such standards. Wellness Connection, which employs 3 production assistants and 8 processing assistants, not only serves 3,000 of Maine’s 4,500-plus dispensary customers, it purchases a sufficient amount of out-of-state supplies to meet the Board’s nonretail monetary standard. The employer further has a gross revenue sufficient to meet the Board’s retail standards and runs its operation year-round with a steady workforce.

The Division of Advice stated that the size and value of the marijuana industry also weighed in favor of asserting jurisdiction. The marijuana industry is worth an estimated $1.5 billion and is projected to increase to $6 billion by the year 2018. In addition, thousands of individuals are employed in the industry, with several of them already represented by unions and covered by collective bargaining agreements. Notably, in 2011, the UFCW created a “Medical Cannabis and Hemp Division.”

Based on its analysis, the Division concluded that it would be appropriate for the Board to assert jurisdiction over the employer. The Division of Advice concluded this despite the fact that the employer’s enterprise violates federal laws. The Division stated that the Department of Justice (“DOJ”) has indicated that it will not prosecute companies such as Wellness Connection unless they undermine enforcement priorities. The Division also recognized that both Congress and OSHA have exercised its authority over the industry.

The Division of Advice also concluded that individuals engaged in processing marijuana, processing assistants, are statutory employees under the Act. The employer’s processing assistants are primarily responsible for working with cannabis plants during the processing stage. The processing stage takes place after the cannabis plants have been grown, cultivated and harvested by the employer’s production assistants. Processing assistants carry out duties such as trimming the dried cannabis, running the plants through a cutting and vacuuming process, extracting the portions of the plant that have the most medicinal value and weighing and packaging the cannabis.

In finding that the processing assistants are employees under the Act, the Division of Advice opined that the processing assistants’ job duties were “more akin to manufacturing” than to agricultural farming because the processing operations transform the cannabis plant from their raw state into a retail product. The Division also pointed out that the employer’s farming operations were subordinate to its processing operations. The employer not only employed 8 processing assistants compared to its 3 production assistants (who perform agricultural duties), it had invested in processing equipment with extensive protocols and training regimens for processing and packaging its product.

Here We Go Again: NLRB Judge Strikes Down Employer’s Solicitation/Distribution Policy

Posted in Current Events, NLRB, Protected Concerted Activity, Unfair Labor Practices

By: Howard M. Wexler

As we have previously reported–most recently here and here– the National Labor Relations Board has taken aim at employer workplace rules that it contends are unlawfully restricting employees’ Section 7 rights.

In yet another example, an NLRB Administrative Law Judge (ALJ) recently held in Mercedes-Benz U.S. International, Inc. that an employer’s solicitation and distribution rule violated the NLRA as employees “reasonably could understand [it] to prohibit all solicitation in work areas.”

The Decision

In Mercedes-Benz, the employer maintained a handbook policy which sought to limit certain non-work related activities which it believed interfered with its goal of “produc[ing] the highest quality vehicle at the most competitive price.” To this end, contained within its employee handbook is a “Solicitation and Distribution of Materials” policy which “prohibits solicitation and/or distribution of non-work related materials by Team Members during work time or in working areas.”  Furthermore, the policy provides that “Solicitation and distribution on Company property by those who are not Team Members is strictly prohibited at all times.” The employer then provided examples of prohibited solicitation and distribution of materials, including:

  • Buying and selling of goods, services, materials, or memberships.
  • Solicitation for charitable contributions outside of MBUSI sponsored charities and selling tickets and chances to activities as stated above.
  • Distribution of handbills, notices, literature, etc., during working time or in work areas.
  • Personal, written, telephone, e-mail or distribution/posting of non-work, related materials

The ALJ noted that “as a rule of thumb, if an employer allows its employees to discuss any nonjob-related subject while they work, they may discuss forming a union.”  In the complaint, the NLRB’s General Counsel alleged that by prohibiting the “solicitation and/or distribution of non-work related materials by Team Members during work time or in working areas,” the reasonable employee would interpret the policy as prohibiting an off-duty employee from discussing the Union with another off-duty employee in a work area, thereby violating Section 8(a)(1). Furthermore, the NLRB asserted that the rule is unlawful because it “is ambiguous and does not clearly convey that employees may lawfully solicit in working areas on nonworking time and it does not describe what is a working area.”

While noting “employers may ban solicitation in working areas during working time” the ALJ held that the employer’s policy in this case violated the Act because it is unlawful for an employer to “extend such bans to working areas during nonworking time.”

The employer presented evidence as to how it actually enforced the policy, arguing that despite this policy, employees have “freely solicited [other employees] uninterrupted” and that the employees “understood the policy did not impede” there Section 7 rights. Despite having “no doubt that Respondent generally allowed employees to discuss the union in the workplace” the ALJ rejected the employer’s defense, finding that the “mere maintenance of the rule, even without enforcement, violates the Act.”

Implications For Employers

This decision highlights the continued need for employers to tread lightly given the NLRB’s ever increasing fixation with workplace rules that it contends unlawfully restrict employees’ Section 7 rights. As the case law continues to develop, employers concerned about potential legal challenges might want to revisit their handbooks and explore the possibility of revising those policies that may be problematic in light of these recent decisions.

 

NLRB Stomps on Union’s Petitioned-For Unit of Shoe Sales Associates, but Maintains Its Controversial Position on Micro-Units

Posted in Bargaining Unit, NLRB

By:  Ashley K. Laken, Esq.

On July 28, 2104, the NLRB unanimously rejected a petitioned-for bargaining unit comprising shoe sales associates in two different departments at Bergdorf Goodman’s Manhattan retail store.  See The Neiman Marcus Group, Inc. d/b/a Bergdorf Goodman, 361 NLRB No. 11.  The Board found that the employees of the petitioned-for unit lacked a sufficient community of interest.  As a consequence, the Board vacated a previously-held union election.

However, the Board declined to address the Employer’s argument that an appropriate unit had to include, at a minimum, all selling employees within the entire store.  And the decision suggests that the Board would not have approved such a large unit.

Relevant Factual Background 

The union petitioned for a bargaining unit consisting of sales associates located in two separate departments within the store:  Salon shoes, which is located on the second floor and has 35 sales associates, and Contemporary shoes, which is located on the fifth floor and has 11 sales associates.  Sales associates in the two departments report to different department managers, who in turn report to different floor managers, who in turn report to different directors of sales.  Additionally, the Salon shoes department is its own department, while the Contemporary shoes department is part of the Contemporary sportswear department.

Sales associates in both groups nonetheless work the same number of hours per week, have the same vacation and holiday benefits, and are subject to the same employee handbook.  However, sales associates in Salon shoes earn a 9% commission while sales associates in Contemporary shoes earn a 10% commission.

All sales associates within the store engage in “interselling,” which includes escorting customers from one department to another and ringing up their transaction in that other department.  However, sales associates in Salon shoes and Contemporary shoes do not substitute for one another or otherwise interchange, and there have been no transfers between those two departments.

In May 2012, an NLRB Regional Director found that the petitioned-for bargaining unit was appropriate under the Board’s controversial Specialty Healthcare decision.  The Employer filed a timely request for review, which was granted, and the election ballots were impounded pending the Board’s decision.

The NLRB’s Analysis

The Board noted that in determining whether a petitioned-for unit is appropriate, it must weigh various community-of-interest factors, including whether the employees interchange with each other, are organized into a separate department, have distinct skills and perform distinct work, have distinct terms and conditions of employment, and are separately supervised.

In finding that the sales associates in Salon shoes and Contemporary shoes lacked a community of interest and that the petitioned-for unit was therefore inappropriate, the Board reasoned that the boundaries of the petitioned-for unit did not resemble any administrative or operational lines drawn by the Employer, such as departments or supervision.  Specifically, the Board noted that while the Salon shoes employees constituted the whole of their department, the petition carved the Contemporary shoes employees out of the Contemporary sportswear department.  The Board also noted that the Salon shoes and Contemporary shoes employees were located on a separate floor, did not share common supervision, and did not interchange with each other.

The Board distinguished its July 22nd Macy’s decision, which approved a bargaining unit made up of cosmetic and fragrance sales workers at a Macy’s store in Massachusetts (see our blog post about that decision here), noting that it found it particularly significant in that case that the unit at issue “conformed to the departmental lines established by the employer.”

Finally, the Board noted that because it found that the petitioned-for unit was not appropriate, it did not need to decide whether any of the other employees that the Employer proposed including in the unit were inappropriately excluded.  The Board also noted, citing to Specialty Healthcare, that the burden is on the proponent of a larger unit to demonstrate that the additional employees it seeks to include share an “overwhelming community of interest” with the petitioned-for employees (but Member Miscimarra noted that he would not apply this standard and would instead ask whether the interests of the group sought are sufficiently distinct from those of other excluded employees to warrant establishment of a separate unit).

Concluding Thoughts

The contours of a bargaining unit can affect the outcome of a union election, and they also have important implications for collective bargaining negotiations.  As a consequence, employers often fight efforts by unions to gerrymander arbitrarily small bargaining units.

The decision provides some guidance on how the Board will analyze future challenges to so-called “micro-units,” and also gives some clues as to how an employer can structure its operations and organizational structure to try to avoid such units.  However, the decision also indicates that the Board will probably not be lowering its recently raised bar for challenging micro-units anytime soon.

Board Approves Departmental “Micro-Units” at Retail Stores

Posted in Bargaining Unit, Elections, NLRB
By: David L. Streck and Bryan Bienias

In its recent 3-1 decision in Macy’s Inc., 361 NLRB No. 4 (2014), the National Labor Relations Board fueled employer concerns about fragmented micro-units in the retail industry.  There, the Board held that a bargaining unit of 41 Macy’s nonsupervisory cosmetics and fragrance (“C+F”) salespersons was an appropriate unit for purposes of collective bargaining, despite the exclusion of salespersons in other departments. The Board’s decision provides a sobering glimpse into the future difficulties retailers may face in showing that a narrowly defined petitioned-for unit is not appropriate.

As discussed in our previous post on the Macy’s case, the primary issue centered on the application of the Board’s 2011 Specialty Healthcare decision to the retail industry. Under the Specialty Healthcare test, any “readily identifiable” group of employees who also share a community of interest is found to be presumptively appropriate, with the burden falling on the employer to show that excluded employees share an “overwhelming community of interest” because the traditional community of interest factors “overlap almost completely.”

Applying this test, the Macy’s Board found that the C+F employees: 1) are readily identifiable as a group based on their similar job classifications and job functions and 2) share a sufficient community of interest because they work in the same department, have common supervision, and share the same purpose and functional integration of selling cosmetic and fragrance products.  While the Board recognized a number of differences among the C+F employees themselves, it found those differences insignificant, particularly because the petitioned-for unit “tracks a departmental line drawn by the employer.” The Board also considered prior retail precedent and made clear that storewide units are no longer presumptively appropriate in the retail industry.

The Board then held that Macy’s failed to show that other salespersons at the store shared an overwhelming community of interest with the C+F employees. In so finding, the Board emphasized the insufficient record evidence of assistance and interchange between all sales employees and the small amount of sales the employees recruited in other departments. The Board also minimized evidence of the similarities between all of the stores’ sales employees (same shifts, handbook, evaluation system, benefits, attendance at morning “rallies”), while focusing on their differences (separate departments, the existence of “counter managers” in the C+F department, separate mid-level supervision, etc.) to find that the employees did not “overlap almost completely.” Notably—and possibly the most troubling for retailers—was the Board’s reliance on certain differences between the C+F  employees and other salespersons to find they did not share an overwhelming community of interest while dismissing those same differences among C+F employees themselves. For example, while finding it significant that other sales employees worked in “separate physical spaces” from C+F employees, the Board minimized the fact that the C+F employees worked on two separate floors of the store by pointing to the presence of an escalator that connected the two work areas.

Finally, the Board outright dismissed Macy’s and the amici’s concerns that the decision would harm the retail industry through “destructive factionalization” of retailers’ operations and the proliferation of competitive and administratively burdensome “micro-unions” at retail stores. The Board found these arguments “pure speculation” and unsupported by the record in this particular case, noting that the C+F unit comprised over one-third of all selling employees and was “significantly larger” than the median unit size (23 to 26 employees) from 2001 to 2011.

The majority’s skepticism aside, it remains to be seen how far the NLRB will go in applying Specialty Healthcare in the retail industry. For now, retailers who would prefer a more broadly defined cross-departmental unit should take heed of the Macy’s decision in both structuring their departments and challenging future petitions for department-by-department bargaining units. As shown in the Macy’s decision, even the slightest differences in departmental structure and lack of contact and interchange between employees in separate departments could suffice to defeat a retailer’s argument for a larger bargaining unit.  There can be no doubt that Macy’s is a major victory for unions, which will try to take advantage of this decision to obtain a foothold in retail stores. Retailers can, therefore, expect to see more petitions for departmental units on the horizon.  Stay tuned.

NLRB to Employer: Sexually Harassing Gestures On The Picket Line Are Protected Activity

Posted in NLRB, Protected Concerted Activity, Unfair Labor Practices

By: Amanda A. Sonneborn

Continuing to push the limits of reason, the Board recently upheld an ALJ’s decision finding that an employer unlawfully suspended a striking employee who made an obscene gesture and “grabbed his crotch” towards another employee while on the picket line. As one might expect, the employer concluded that the employee who engaged in the obscene gesture violated the company’s sexual harassment and workplace violence policies. To discipline the employee for the conduct, the employer issued the employee a suspension. The Union subsequently filed an unfair labor practice charge challenging the suspension.

After a hearing on the issue, while the ALJ concluded that the striker did engage in “misconduct” by making the lewd gesture towards the other employee, he found it did not rise to a level sufficient to lose the protection of the National Labor Relations Act. In fact, the ALJ concluded “that for a striking employee to forfeit the protection of the Act, an implied threat of bodily harm must accompany a vulgar or obscene gesture.” So, given that the striker only engaged in admittedly “vulgar or obscene” conduct, the employer could not suspend the employee for his activity on the picket line.

In reaching this conclusion, the ALJ summarily dismissed the employer’s obligations to prohibit sexual harassment under Title VII of the Civil Rights Act by concluding that this obscene conduct did not constitute sexual harassment. In doing so, the ALJ boldly claimed that the misconduct “cannot be legitimately characterized as `sexual harassment’” and that, under Title VII, “a plaintiff generally cannot prevail on the basis on a single incident not involving physical contact.” The ALJ cited one federal appeals court case from 2006 in support of his conclusion. The Board then adopted the ALJ’s decision on the issue with no additional discussion.

Employers should stay tuned as this case looks ripe for appeal.

Divided Supreme Court Finds Fair Share Fees For “Partial-Public Employees” Unconstitutional

Posted in Arbitration, Current Events, Representation Cases, Uncategorized

By: Ronald J. Kramer and Joshua L. Ditelberg

Earlier today the Supreme Court issued its decision in Harris v. Quinn, Case No. 11-681 (June 30, 2014), finding in a 5 to 4 decision that the First Amendment prohibits the collection of “fair share,” or agency fees from Illinois Rehabilitation Program personal assistants.  The Court majority, by attacking longstanding precedent on this issue, raises significant questions as to the application of fair share fees in the public sector generally.

In Harris, the plaintiffs provided in-home health care services in Illinois for people with varying levels of disabilities and other health needs.  While the State paid the salaries of these personal assistants, provided health insurance, set certain employment qualifications, conducted performance reviews, and described services that assistants may provide, the person receiving the care—the customer—essentially controlled most aspects of the employment relationship, and by regulation was designated as the employer of the personal assistants.  As the State was not the sole employer of the personal assistants, at one time they had no collective bargaining rights under the Illinois Public Labor Relations Act (“Act”).  In 2003, the Act was amended to designate “personal care attendants and personal assistants working under the Home Services Program” as state employees for purposes of collective bargaining.  Some twenty thousand Rehabilitation Program assistants thereafter voted to be represented by the Service Employees International Union (SEIU).  The Rehabilitation Program assistants’ contract included a union security clause that required all assistants who were not union members to pay their “fair share” of fees for the costs of actual bargaining and non-political contract administration activities.  Illinois law permits such fair share fee provisions in collective bargaining agreements.

The plaintiffs (a group of potentially affected employees) sued, challenging the constitutionality of the fair share fee requirement.  They claimed that the fair share fee requirement violated the First Amendment by compelling their association with, and speech through, the union.  The plaintiffs asserted infringement even though, by paying only “fair share” fees, ostensibly they were only paying for the union’s representation of them for bargaining and administrative (not political) purposes.  No monies arguably were going towards union political activities.

The District Court and then the Seventh Circuit rejected the plaintiffs’ claims.  Finding the personal assistants were state employees, at least with regard to collective bargaining, the Seventh Circuit found the union’s collection and use of fair share fees was permitted by almost sixty years of prior Supreme Court jurisprudence, especially Railway Employees’ Dep’t v. Hanson, 351 U.S. 225, 76 S. Ct. 714 (1956) (finding Railway Labor Act preempted the state constitution and thus a union shop provision in a contract was lawful), and Abood v. Detroit Bd. of Educ., 431 U.S. 209, 97 S. Ct. 1782 (1977) (holding no First Amendment violation to require non-union public teachers under the  “agency shop” clause of their collective bargaining agreement to financially support the union’s collective bargaining, contract administration, grievance-adjustment procedures, and other activities “germane to its duties as collective-bargaining representative.”).

In reversing the Seventh Circuit, the Court noted that the State of Illinois was seeking to significantly expand Abood to apply, “not just to full-fledged public employees, but also to others who are deemed to be public employees solely for the purpose of unionization and the collection of an agency fee.”  The Court examined its earlier reasoning in Abood, and found its analysis to be “questionable on several grounds.”  The Court criticized the decision for, among other reasons, simply assuming that the Court previously had decided such fair share payments were constitutional in the public sector, and for failing to appreciate the difference between core union speech involuntarily subsidized by dissenting public sector employees, where wages and benefits also were political issues, and core union speech involuntarily funded by their private sector counterparts.

Given Abood’s “questionable foundations,” and because personal assistants are quite different from full-fledged public employees, the Court refused to extend Abood to cover what it termed “partial-public employees”—a concept which is novel and undeveloped in public sector employee jurisprudence.  (Elsewhere in its decision, the Court also referred to “quasi-public employees.”) The Court then analyzed the constitutionality of the payments compelled by Illinois law under applicable First Amendment standards.  The Court held that the agency fee provisions could not satisfy the test used in Knox et al. v. Service Employees International Union, Local 1000, __ U.S. __,  132 S. Ct. 2277 (2012), specifically that the provision does not serve a compelling state interest that cannot be achieved through means significantly less restrictive of associational freedoms.  The Court rejected claims that agency fee provisions promoted “labor peace”—in its view, a critical rationale supporting agency fees in the private sector—given the union’s status as exclusive bargaining agent was not inextricably linked to such fees, and any threat to labor peace was diminished in this situation given personal assistants do not work at a common facility (with potentially conflicting labor groups) but instead work in private homes.  That the union might be an effective advocate for personal assistants further was insufficient to warrant the restriction in employee rights.

The four dissenting Justices argued that Abood controlled the outcome of this case and that, as such, the agency fees provision should be upheld.  The dissent agreed with the Seventh Circuit that the fact the personal assistants might be jointly employed by both the State and the individual customers should make no difference to the analysis.  The dissent considered the terms over which the State exercised control to be primarily those that would be subject to bargaining, and that the fact the scope of bargaining is circumscribed given the customer’s authority over individualized employment matters like hiring and firing to be irrelevant—given that states often limit the scope of permissible public sector bargaining.

The dissent further noted that, despite the majority’s “potshots” at the decision, even it declined the invitation to overturn Abood, and that the Court’s “precedent … fairly understood and applied, makes it impossible for this Court to reverse that decision.”  The dissent spent considerable time explaining why the Court should not overturn Abood given it is stare decisis, and explained Abood was properly decided in the first place.

While Harris technically is limited to so-called “partial-public employees, the majority’s blistering attack and critique of Abood raises questions as to whether the current majority (or at least much of it) would vote to uphold Abood if it faced a case involving full-fledged public sector employees.  This fear should be of grave concern to public sector unions.  Public sector employees constitute almost half of the unionized workforce, even though many states limit or prohibit public sector unions.  Indeed, according to the Bureau of Labor Statistics, in 2013 38.7% of the public sector workforce was organized (whether union members or not), a percentage five times higher than the private sector workforce (7.5%).  In states where public sector employees are legally permitted to organize they have become very powerful politically.  If public sector employees who have been forced to pay fair share fees for years to organizations they do not support are no longer required to pay such fees, it might deliver a critical blow to the clout of public sector unions.

Public sector unions dodged a bullet.  The question remains whether they will be able to do so the next time, assuming, of course, the makeup of the Court does not change.

Supreme Court Cans NLRB Recess Appointments

Posted in Appointments, Current Events, NLRB

By:  John J. Toner, Esq.

The Supreme Court today issued its much anticipated decision in NLRB v. Noel Canning, regarding the President’s authority to avoid the Senate’s confirmation procedure by granting recess appointments to fill  vacant positions. The decision specifically involved the legitimacy of the President’s recess appointment of Terence Flynn, Sharon Block, and Richard Griffin to be Members of the National Labor Relations Board. A unanimous Court found that those appointments were beyond the President’s authority and, therefore, unconstitutional.

As a result of the Court’s decision, NLRB decisions in which Block, Griffin, or Flynn participated will most likely be invalidated and will need to be reconsidered by the current Board, which already has a considerable backlog of pending cases and is devoting substantial efforts to issue the “quickie” election regulations. Among the decisions that the NLRB will have to revisit are those involving highly controversial issues such an employer’s ability to issue reasonable rules regarding employee behavior at work or to limit access to its facilities by off-duty employees; an employer’s obligation to continue dues deduction after expiration of the collective bargaining agreement; the duty to bargain discipline during first contract negotiations; confidentiality instructions to employees during employer investigations; and an employer’s obligation to provide a union with documents previously considered confidential.

In addition to the case decisions that now may be invalidated, any administrative actions in which Block, Flynn, or Griffin participated may also be invalid — including the appointments of Regional Directors and Administrative Law Judges. As a result, many decisions issued by these Regional Directors or Administrative Law Judges also may be invalid.

The total fallout from this important decision will not be known for some time and we will continue to monitor and advise you of recent developments. To be sure, however, no matter how extensive the repercussions ultimately extend, the decision is a tremendous victory for employers.

Board Majority Finds Referring to Owner as a “F___ing Crook” and an “A__hole” No Bar to Reinstatement with Back Pay

Posted in NLRB, Protected Concerted Activity, Unfair Labor Practices

By: Michael J. Rybicki, Esq.

Employers frequently express extreme frustration and bewilderment with respect to the Board and its decisions. We can only imagine how the owners of Plaza Auto Center, Inc. in Yuma, Arizona must feel following the Board’s Supplemental Decision in Plaza Auto Center, Inc., 360 NLRB No. 117, 199 LRRM 1523 (May 28, 2014), directing reinstatement and back pay for an employee who, while engaging in protected concerted activity, called the owner a “f__ing crook” and an “a___hole” (in the interest of decorum, we’ve declined to reprint the offensive language), told the owner he would regret it if the employee was fired, and who engaged in other conduct that a federal court of appeals concluded called for a remand to the Board to determine whether the employee’s outburst cost him the protection of the Act (Plaza Auto Center, Inc. v. NLRB, 664 F.3d 286 (9th Cir. 2011).

A Board majority (Chairman Pearce and Member Hirozawa) found that the outburst and associated conduct did not deprive the employee of the Act’s protections. The outrageousness of this decision is clear from the dissent of Member Johnson, whose comments also give a fair flavor of the facts in the case:

[The Majority’s] approach implies that such misbehavior is normative, or at least that the Act mandates tolerance of it whenever profane or menacing outbursts are somehow connected to protected concerted activity. I disagree. By this standard employees … will be permitted to curse, denigrate, and defy their managers with impunity during the course of otherwise protected activity, provided that they do so in front of a relatively small audience, can point to some provocation, and do not make any overt threats. In my view, few, if any, employers would countenance such behavior in the absence of protected activity. I do not believe they must act so differently when the confrontation involves protected activity.

In reaching its decision, the Majority reversed certain critical credibility findings by the administrative law judge, which is highly unusual. The Majority also notes that the employee had no history of similar misconduct. At the time of his termination, however, the employee had been employed for only two months.

NLRB Affirms Ruling That Employer Maintained Unlawful “No Gossip Policy”

Posted in Concerted Activity, Current Events, NLRB, Protected Concerted Activity

By: Howard M. Wexler, Esq.  &  Joshua D. Seidman, Esq.

As we previously blogged about – most recently here  and here, the NLRB has taken aim at employer workplace rules that it contends are unlawfully restricting employees’ Section 7 rights. 

On June 13, 2014 the NLRB affirmed an ALJ decision issued in Laurus Technical Institute, 360 NLRB No. 133 (Laurus), a case we previously blogged about here, where an employer’s “No Gossip Policy” was found unlawful. 

The Board’s Decision

In Laurus Technical Institute, a technical school implemented a “No Gossip Policy” (“Policy”) in February 2012. In relevant part, the Policy stated that “[e]mployees that participate in or instigate gossip about the company, an employee, or customer will receive disciplinary action…[that] may include termination.”

Additionally, the Policy listed six instances to help define “gossip,” including “[t]alking about a person’s personal life when they are not present,” “[t]alking about a person’s professional life without his/her supervisor present,” and “[c]reating, sharing, or repeating” rumors about another person, that are overheard, or that constitute hearsay. The Policy was published in multiple versions of the school’s employee handbook.

Nine months after the school introduced the Policy, it terminated an employee for “Unsatisfactory Performance.” In the employee’s termination letter the school noted that there were several reasons for her termination, including “multiple complaints about repeated violations of ‘the company’s written ‘no gossip policy,’ as outlined in the company’s handbook,’ which had ‘a direct and negative impact on [her] coworker’s ability to effectively perform their job responsibilities,’” and “attempts to actively solicit and recruit coworkers to work for another company, a direct competitor.”

The ALJ concluded that the school’s Policy violated Section 8(a)(1) of the Act. The decision explained that because “[t]he language in the no gossip policy is overly broad, ambiguous, and severely restricts employees from discussing or complaining about any terms and conditions of employment,” the Policy prohibits employees from exercising their rights under the Act. Similarly, the ALJ noted that the school’s Policy further chills employees’ protected rights because it “narrowly prohibits virtually all communications about anyone, including the company or its managers.”

The ALJ then dissected the employer’s actions with respect to the terminated employee. First, the decision stated that the termination was unlawful because “Board precedent holds that discharging an employee for violating an unlawful overbroad rule is likewise unlawful.” While the school argued that the employee “did not engage in any such protected activity, but if she did, she is not afforded the protection of the [NLRA] because of her disruptive behavior and its effects on her coworkers,” the ALJ rejected this argument and found that the employee was merely discussing recent layoffs of their former co-workers and supervisor and that such discussions constitute protected concerted activity.

 In its June 13, 2014 decision the Board adopted the ALJ’s finding that the employer’s “No Gossip Policy” was “overly broad.”  As a result of its finding that the employer violated Section 8(a)(1) of the NLRA when it terminated the at-issue employee for violating the “No Gossip Policy” the Board ordered full reinstatement, with back pay. 

Implications For Employers

This decision highlights the continued need for employers tread lightly given the NLRB’s ever increasing fixation with workplace rules that it contends are unlawfully restricting employees’ Section 7 rights.  As the case law continues to develop, employers concerned about potential legal challenges might want to revisit their handbooks and explore the possibility of revising those policies that may be problematic in light of these recent decisions.  As a result, employer should be prepared find themselves (and their handbooks and work rules) in litigation before the NLRB.