By:  Ashley Laken, Esq.

Seyfarth Synopsis: NLRB rules that fast-food company violated the National Labor Relations Act by maintaining a rule prohibiting employees from wearing unauthorized buttons or insignia and by instructing an employee to remove his “Fight For $15” button.

On March 21, NLRB Acting Chairman Miscimarra and Members Pearce and McFerran unanimously ruled that a fast-food chain violated the National Labor Relations Act by maintaining a rule that prohibited employees from wearing unauthorized pins or stickers, and also by instructing an employee to remove his “Fight For $15” button.  (In-N-Out Burger, Inc., 365 NLRB No. 39.)

Regarding the rule that prohibited employees from wearing unauthorized pins or stickers, the employer maintained a written rule that stated “Wearing any type of pin or stickers is not permitted.”  An NLRB Administrative Law Judge observed that it is well-settled that an employer violates employees’ rights under Section 7 of the Act when it prohibits them from wearing union insignia at the workplace (unless there are special circumstances present). Further, because Section 7 also protects the right of employees to engage in concerted activities for their mutual aid and protection, such as advocating for higher wages, the ALJ concluded that the Act protects employees’ right to wear a “Fight For $15 [hourly wage]” button to the same extent it protects their right to wear a button referring to a union.  The Board agreed with this analysis, and also agreed with the ALJ’s conclusion that the employer had presented insufficient “public image” evidence to render lawful the prohibition on wearing pins or stickers.

On this latter point, although Acting Chairman Miscimarra agreed with the ALJ that the employer had presented insufficient “public image” evidence to render lawful the employer’s indication that employees could not wear a small “Fight For $15” button on their uniforms, Miscimarra disclaimed reliance on the ALJ’s characterization of case law regarding policies that permit employers in some cases to restrict the wearing of buttons and pins.  Miscimarra observed that the Board and the courts have found such restrictions to be lawful where the wearing of buttons and pins would unreasonably interfere with the employer’s public image, and he disagreed with any implication that conventional products (such as hamburgers, french fries, and soft drinks) could never warrant maintenance of a public image that, in turn, could constitute “special circumstances” justifying a restriction on buttons and pins.  In response to the ALJ’s reasoning that the fast-food employer’s “public image” defense was undermined by evidence that employees sometimes wore employer-supplied buttons referring to a holiday or a charity, Miscimarra stated that in his view, when the Board evaluates the legality of a restriction on buttons and pins, an employer’s “public image” can legitimately recognize certain holidays or charities without diminishing the importance of the public image to the employer’s business.

The NLRB ordered the employer, among other things, to cease and desist from maintaining and enforcing the rule prohibiting employees from wearing any button or insignia apart from those the employer had approved and that made no exceptions for buttons or insignia pertaining to wages, hours, terms and conditions of employment or union or other protected activities.  The NLRB also ordered the employer to publish and distribute to all employees nationwide a revised appearance policy that either did not contain the unlawful rule or that provided the language of a lawful rule, and to also post at its stores nationwide notices regarding the NLRB’s order.

It bears mentioning that the case stemmed from unfair labor practice charges brought not by employees, but by the Houston Workers Organizing Committee, a group that advocates for minimum wage increases and unionization rights.

Employer Takeaway

The decision highlights that the legality of banning employees from wearing buttons or stickers is a highly fact-specific inquiry, and one that may turn in part on the political leanings of those at the NLRB.  Employers that have questions about whether they can ban employees from wearing buttons or stickers should contact their favorite labor attorney.

By:  Bryan Bienias, Esq.

Seyfarth Synopsis: The Court of Appeals for the D.C. Circuit affirmed in part and rejected in part the National Labor Relations Board’s Banner Estrella decision regarding an employer’s requirement of confidentiality during workplace investigations. In doing so, the Court did not address, and essentially left intact, both the Board’s prohibition of blanket confidentiality instructions, and its requirement that employers determine the need for confidentiality on a case-by-case basis.

Last Friday, a three-member panel of the U.S. Court of Appeals for the D.C. Circuit punted on the opportunity to rein in the National Labor Relations Board’s restrictions on the ability of an employer to ensure confidentiality when conducting internal investigations.

The case, Banner Health System v. NLRB, No. 15-1245 (D.C. Cir. Mar. 24, 2017), addressed the non-profit healthcare system’s appeal of the Board’s controversial Banner Estrella decision (originally decided in 2012 and reaffirmed upon remand following Noel Canning).  There, the Board struck down as overbroad a confidentiality policy that prohibited employees from sharing salary and disciplinary information that had not been “shared” by the employee to whom it related.  The Board also found that the company unlawfully maintained a categorical policy of asking employees during investigatory interviews not to discuss certain kinds of human resources investigations.

The Board did not stop there, however, and announced a new rule prohibiting employers from promulgating blanket rules barring employee discussions concerning ongoing investigations. Instead, the Board held that an employer may only prohibit discussions regarding ongoing investigations if it demonstrates on a case-by-case basis that it has a legitimate and substantial business justification that outweighs employees’ Section 7 rights.  The employer must determine whether in any given investigation witnesses need protection, evidence is danger of being destroyed, testimony is in danger of being fabricated, and there was a need to prevent a cover up.

On appeal, the D.C. Circuit Court affirmed the Board’s finding that the Company’s confidentiality agreement unlawfully barred its workers from sharing information related to terms and conditions of employment. In this context, the Court deferred to the Board’s conclusion that the confidentiality agreement “struck at the heartland of Section 7 activity without adequate justification” and held that the Agreement expressly reached information about salaries and employee discipline, which “is the sort of overbreadth our precedents squarely forbid.”  The Court also found the confidentiality agreement’s “safe harbor” provision, which allowed employees to discuss salary and discipline information when “shared by the employee,” too ambiguous to adequately protect employees’ right to share innocently obtained information.

However, the Court determined that the Board made “unwarranted logical leaps” and lacked substantial evidence to find that the Company unlawfully maintained a categorical policy of asking employees not to discuss certain kinds of human resources investigations.  The only evidence supporting the Board’s finding was an investigative interview form instructing investigators to request that interviewees not discuss the investigation with coworkers, along with vague testimony from an HR representative regarding how and when the script was utilized. The Court held that this evidence did not establish whether the Company, in practice, categorically requested investigative nondisclosure in all investigations.

Because the dearth of evidence “doomed” the Board’s order as to the investigation, the Court did not reach the Company’s or the amici’s arguments that the Board failed to balance employees’ Section 7 rights against employers’ interests in nondisclosure of workplace investigations.  Nor did it opine on the Board’s requirement of a case-by-case approach to justifying investigative confidentiality.

Takeaway

Despite the Court’s partial rejection of the Board’s Banner Estrella decision, the Board’s rules restricting employer’s use of routine confidentiality instructions during investigations remains the law of the land.  Employers should, therefore, continue refraining from issuing blanket confidentiality policies when conducting investigations.  Instead, employers must consider on a case-by-case basis whether confidentiality is truly needed, and only require confidentiality in those circumstances where it is reasonably required.

Should you have any questions about a current or proposed confidentiality policy, or requiring confidentiality during internal investigations, please contact the authors, your Seyfarth attorney, or any member of the Labor & Employee Relations Team to be sure your company’s approach passes legal muster under current law.

NLRB (Logo)By: Joshua M. Henderson, Esq.

Seyfarth SynopsisA recent federal appeals court decision makes it even more difficult for an employer to withdraw recognition from a union that has lost majority support.  Employers need to be aware of the possibility of union “gamesmanship” when deciding how to proceed.

An employer that withdraws recognition from a union as the exclusive bargaining agent of its employees does so, as the Board and Courts say, “at its peril.” It’s a risky move, one that requires objective evidence that a union has actually lost the majority support among the employees it represents.  And the employer must be correct about the actual loss of majority support or it will face an unfair labor practice charge for refusing to bargain with a union.  Consider it a form of strict liability in the labor-relations context.  But what if the employer has objective evidence that a union has lost majority support, and then the union regains the majority support before the employer withdraws recognition?  Also, if an employer is found to have violated the law under those circumstances, what is the remedy when the union deliberately did not disclose to the employer it had regained majority status?

In Scomas of Sausalito v. NLRB (March 7, 2017), the D.C. Circuit considered these two questions.  The Court upheld the unfair labor practice charge against the employer that withdrew recognition without knowing that the union had regained majority status.  The Court observed that the employees had suffered from “an extended period of Union neglect.”  Thus, the union had not sought to bargain with the employer for over a year, and held no meetings and provided no information to its members for more than a year, but continued to collect dues from them all the while.  Perhaps not surprisingly, a majority of employees notified the employer in writing that they no longer wanted the union to represent them.  Two days after being confronted with this news, a union representative notified the employer that the union wanted to negotiate a new collective bargaining agreement, and worked behind the scenes to persuade six employees to revoke their signatures on the decertification notice that had been given to the employer.  Yet the union never told the employer that these signatures had been revoked, or that (in light of the size of the bargaining unit) this meant the union had in fact not lost majority support.  The Court decried the union’s “gamesmanship” in not informing the employer, but held that under the Board’s Levitz Furniture test (which the Court had approved of in an earlier case), the employer assumed the risk that it was wrong in evaluating majority support.  Because the employer was wrong, it could not lawfully withdraw recognition.

In answer to the second question, however, the Court reversed the Board’s decision that a “bargaining order” was the appropriate remedy. Bargaining orders are reserved for flagrant, deliberate unfair labor practices.  In the Court’s view, the employer was not acting in bad faith when it withdrew recognition from the union.  The evidence showed that the employer did not act in haste.  Rather, it took steps to ensure that the signatures on the petition delivered to it matched those on the employees’ payroll records.  Moreover, the signatures that remained on the petition after the revocation comprised 42 percent of the bargaining unit.  That exceeds the 30 percent threshold for directing an election, whether filed by a union, an employer, or an employee.  The disaffected employees also had filed a decertification election petition with the Board, but withdrew it after their employer withdrew recognition from the union.  Under the circumstances, the Court rejected the Board’s argument that an election was not an appropriate alternative remedy.

Takeaway for Employers:  Under the Board’s current test (which may or may not be reconsidered by a new Republican-majority Board), an employer may withdraw recognition from the union only when there is an actual loss of majority support for the union; as a practical matter, the employer must be absolutely certain that more than half of the employees in the bargaining unit no longer want the union to represent them.  Even then, the union may be able to undermine the employer’s basis for withdrawal and place the employer’s decision in jeopardy.  When faced with an apparent loss of majority support for a union, an employer should seriously consider choosing the safer option of filing an RM petition (a management election petition) with the NLRB to allow the employees an opportunity to vote on whether to oust the union in a formal election overseen by the Board.  [Good-faith uncertainty of majority status could, in some circumstances and under the Board’s current standard, support an internal poll of employees as to their support for the union, but polling requires fastidious attention to procedural safeguards and is fraught with legal risk as well.]

 

By: Alison C. Loomis, Esq.

Seyfarth Synopsis: Administrative Law Judge found that the NLRA preempts part of Wisconsin’s right-to-work law that restricts employers from deducting union dues directly from employees’ paychecks.

If you are an avid reader of our blog, you will undoubtedly recall that approximately two years ago, Wisconsin became the then-25th right-to-work state when it enacted legislation that made union security agreements requiring workers to pay union dues as a condition of employment illegal. In addition, the law also made it an unfair labor practice for an employer to collect dues from workers’ wages unless an employee directed it to do so by written notice, which was revocable with 30 days notice.

Almost two years to the day that the legislation was enacted, Administrative Law Judge Charles J. Muhl, a former NLRB attorney, found that the Wisconsin law was partially preempted by the National Labor Relations Act. Metalcraft of Mayville Inc. and District Lodge 10, International Association of Machinists, Case No. 18-CA-178322.

The parties’ collective bargaining agreement contained a dues check-off provision and was set to renew in June 2016, at which point, the contract would become subject to the Wisconsin right-to-work law. The employer initiated communications with the union in April to discuss the Wisconsin law’s impact on the contract.  The employer informed the union of its belief that the dues-checkoff provision would be unlawful once the law applied.  Two days prior to the renewal date of the contract, the employer informed the union that it would not enforce this provision.  The employer then sent several letters to employees intended to answer questions about the contract renewal, the right-to-work law, and the nature of paying union dues going forward.

A few days after the employer stopped remitting dues, the union filed a grievance, claiming that the employer violated section 8(a)(5) the NLRA by unilaterally changing working conditions by rescinding the dues-checkoff clause of their contract without bargaining. In response, the employer argued the Wisconsin right-to-work law required that it rescind its dues check-off.

In the decision, the ALJ concluded that the NLRA allowed Wisconsin the authority to “enact prohibitions on union security” but “preempts the state’s attempt to regulate dues checkoff.”  Specifically, the ALJ found that because the NLRA requires dues authorization forms be terminated with a year’s notice and the Wisconsin law minimizes the window to a 30-day period, “[t]he two provisions are directly at odds with one another” and, accordingly, “the provisions of Wisconsin’s law addressing that topic are preempted.”

The ALJ found that the employer violated the NLRA when it stopped collecting union dues and found several other labor violations. The decision ordered the employer to resume checking off and transferring dues to the union and to make the union whole for any payments that the employer missed.

Takeaway:

Although the Presidential election has led many to expect the labor law pendulum to swing quickly back toward a more pro-employer perspective, this decision reflects the reality that no such transition has yet occurred at the Board.

Striking  By: Brian Stolzenbach, Esq.

Seyfarth Synopsis: Employers should not presume that they are permitted to stop paying for employees’ medical benefits once they go out on strike. In a 2-1 decision, the NLRB recently held that — at least in some circumstances — medical benefits may be “accrued” simply by virtue of being employed.  If so, then an employer may not stop those benefits during strike.

Nearly 70 years ago, the NLRB confirmed that an employer has no obligation to finance a strike against itself by paying wages to employees during a strike. See General Elec., 80 NLRB 510 (1948).  No one ever said that strikes are supposed to be painless for strikers or that they entitled to be paid not to work.  Decades after the General Electric decision, it has become very common for employers to provide their employees with medical insurance, in addition to wages, as a form of compensation.  Many (perhaps most) employers assume that the old axiom extends to this form of compensation, as well:  they believe they can never be required to continue paying for their employees’ medical insurance during a strike.  Alas, in Hawaiian Telcom, Inc., 365 NLRB No. 36 (Feb. 23, 2017), the NLRB held otherwise.  Over an impassioned dissent by Acting NLRB Chairman Phil Miscimarra, the two Democrat Members of the Board concluded that this is actually a question of contract interpretation.  Reviewing the collective bargaining agreement that had expired prior to the strike, the NLRB observed that the contract provided medical insurance for all employees covered by the agreement — with no exceptions, save for termination of employment.  Strikers, of course, have not terminated their employment, so the NLRB decided that medical benefits could not be stopped during the strike, even though the collective bargaining agreement had expired.

What does this mean for employers? At the very least, it means that they should be very familiar with the precise terms of the collective bargaining agreement and other documents (benefit plan documents, SPDs, etc.) that govern their medical benefits for organized employees.  They should consider how these documents may be interpreted and whether they may be in need of revision.  Of course, this is a complex area of overlapping labor relations and employee benefits law, and an employer may not lawfully be able to make the changes it desires, for various reasons.  Nevertheless, it is better to understand the potential obstacles and to make a considered decision about dealing with them well before a work stoppage looms on the horizon, rather than scrambling to deal with the issue during a strike or (worse) finding out five years after cutting off benefits during a strike that the decision to do so was unlawful, as the employer did in Hawaiian Telcom.

By: Jaclyn W. Hamlin, Esq.

Seyfarth Synopsis: A review and analysis of select NLRB cases decided by President Trump’s new appointee as Secretary of Labor and former NLRB Member Alexander Acosta.

With the withdrawal of Andrew Puzder from consideration for the Secretary of Labor vacancy on President Donald Trump’s cabinet, former NLRB Member Alexander Acosta has emerged as the candidate for the role. If confirmed, Mr. Acosta will become the first Hispanic member of the Trump Cabinet.  While his confirmation has not yet been accomplished, and it is impossible to predict precisely the direction the Department of Labor will take if and when Mr. Acosta assumes the mantle of leadership, reviewing some of his words from his time as an NLRB Member is an interesting exercise, and may provide a few clues about his priorities and possible goals.  One thing that stands out in the opinions is his desire to follow precedent and established law, even where it results in an outcome that he may not support philosophically.

Mr. Acosta was appointed to the NLRB by President George W. Bush, and served his tenure in 2002 and 2003, as a member of the Majority. Nonetheless, Mr. Acosta occasionally availed himself of concurring or dissenting opinions to highlight his views on particular issues.  Below, we review just a few.

Alexandria Clinic, P.A., 339 NLRB No. 162 (2003) – In a concurring opinion, Mr. Acosta agreed with his majority colleagues that the employer did not violate the NLRA when it discharged several employees for participating in a strike without giving the requisite notice under Section 8(g) of the Act.  Mr. Acosta explained his view that the statutory language was clear and that “because the statutory language is unambiguous, we cannot depart from it.”  Mr. Acosta further warned against the dangers of ignoring the plain language of the statute – from increased litigation to uncertainty for employers.

Double D Construction Group, Inc., 339 NLRB No. 48 (2003) – Concurring with his majority colleagues, Mr. Acosta expressed a strong view on the rights of undocumented immigrant workers.  Mr. Acosta explained that the Administrative Law Judge discredited an employee’s testimony because he had used a false Social Security number to apply for work, and concluded from that act that the employee might offer false testimony.  Mr. Acosta firmly rejected this view, explaining that undocumented workers are statutory employees entitled to the protections of the NLRA.  He stated that a blanket policy of discrediting any “once-undocumented worker, who to obtain work provides a false social security number,” was inconsistent with the Act and that “such an automatic sanction makes it exceedingly difficulty for the General Counsel to establish an unlawful discharge or other unfair labor practice directed against an undocumented worker.”  While Mr. Acosta acknowledged that providing a false social security number is relevant to a credibility determination, he warned that the NLRB’s “continued commitment to prosecuting unfair labor practices directed against undocumented workers requires an understanding of the workplace and life realities faced by these individuals.”

Comcast Cablevision-Taylor, 338 NLRB No. 166 (2003) – Concurring in a decision related to a representation case, Mr. Acosta used his platform to highlight “potential inconsistencies in Board case law.”  Mr. Acosta expressed concern that the Sixth Circuit had used a Board holding in a previous case to rule on enforcement issues, but that the Board had not considered whether the case itself, or some other related inconsistent precedent, remained good law.  Mr. Acosta encouraged the Board to reconcile its precedent so as to avoid inconsistent results.

While Mr. Acosta’s confirmation is not yet accomplished, Republicans and Democrats alike have characterized him as a longtime public servant with experience enforcing labor laws. This small sampling of his concurrences indicates that he values logical decision-making based on the plain language of the law, where appropriate, and that he considers the consistency of precedent to be of importance.  His concurring opinion in Double D Construction reveals that he considers the government as having a role in protecting the rights of undocumented workers.  If confirmed as Secretary of Labor, Mr. Acosta will – of course – not be responsible for enforcing the NLRA.  His concurrences as a Member of the NLRB, however, provide interesting insights into the Department of Labor he may soon run.

Striking  By: Marshall B. Babson, Esq., Katherine Mendez, Esq., and Bryan Bienias, Esq.

Seyfarth Synopsis: Several organizations are planning nationwide strikes and boycott activities on February 16-17 to oppose Trump Administration and Republican policies. Employers impacted by these activities should be mindful of employees’ rights before responding.

Several labor and activist groups are calling for national general strikes and boycotts this week to protest policies enacted and proposed by the new Trump Administration and the Republican Congress.

Thursday, February 16: A Day Without Immigrants. The first action, “A Day Without Immigrants,” is currently scheduled for this Thursday, February 16.  The campaign, promoted in Spanish and English, has been spread through Facebook, fliers, and word of mouth and calls on immigrants and their supporters “not to go to work, open businesses, shop, eat in restaurants, buy gas, go to classes, or send children to school.” While the campaign originally focused on the Washington D.C. area, the campaign is expected to spread nationwide. A similar action in Milwaukee, Wisconsin this past Monday, February 13 drew thousands of protesters.

Friday, February 17: National General Strike. Then, on Friday, February 17, a group called Strike4Democracy has called for a national general strike and plans on “over 100 strike actions across the United States, and beyond.” The campaign calls for participants to forgo work on Friday and, instead “plan or take part in an event in your community” and “occupy public space with positive messages of resistance and solidarity.”

The organizers do not plan on stopping there. They intend to use Friday’s national general strike to “build towards a series of mass strikes,” with another mass strike planned on March 8, 2017, another on May 1, 2017 (May Day), and “a heightening resistance throughout the summer.”

So, what does this mean for employers?

While these general strikes and those planned for the future could wreak havoc on an employer’s operations — as employees fail to report to work or leave shifts early — the National Labor Relations Act provides protection for employees who engage in political advocacy that relates specifically to job concerns and to other workplace issues.

Employers have the right to enforce “neutrally applied work rules” to restrict employees from leaving work for political activities unrelated to workplace concerns. As discussed above, whether an employee’s actions are protected or unprotected turns on whether the employee’s absence relates to activity directed at “terms and conditions of employment” which the employer controls or to workplace concerns that affect all employees. If the absence is due to political activity totally unrelated to workplace concerns, employees could be subject to discipline, although discipline is not necessarily the prudent course to take.

Given the myriad issues to be addressed in these strikes, from immigration reform to minimum wage laws to worker’s rights, employers may be hard pressed to show that employees who participate in these strikes in lieu of working have engaged in unprotected activity. Employers could find themselves in further “hot water” with the NLRB if they discipline employees for absenteeism or tardiness related to the employees’ political activities.

If your company is affected by any of the strike activity this week or in the months ahead, contact the authors, your Seyfarth attorney, or any member of the Labor & Employee Relations Team.

Interrogation By: Christopher W. Kelleher, Esq.

Seyfarth Synopsis: The NLRB held that American Medical Response of Southern California (“AMR”) did not violate an employee’s rights during a police investigation of an EMT’s gun violence threat by not providing the EMT with a union representative.

In November 2015, an EMT working in San Bernardino County, CA learned that the Operations Manager planned to fire the EMT’s girlfriend. The EMT responded by telling his coworker, “if things go the way they are looking, I’ll come shoot everyone here.” Concerned, the coworker reported the EMT to management.   

In response, the Operations Manager drove to the nearby police department and asked an officer for guidance on how to handle the situation. The officer came to AMR’s facility, spoke with the EMT while the Operations Manager was present, and performed a threat assessment. Although the Operations Manager was present during the officer’s interview with the EMT, the Operations Manager did not ask any questions during the interview. The Company later decided to terminate the EMT’s employment.

The EMT filed an unfair labor practice charge alleging that AMR had refused his requests for union representation during the interview. Under NLRB v. J. Weingarten, Inc., 420 U.S. 251, 256 (1975), an employee represented by a union has the right to request that a union representative be present during an investigatory interview which the employee reasonably believes could result in disciplinary action. In order to invoke this right, the employee must make a request for union representation. It is not the employer’s responsibility to inform the employee of his Weingarten rights.

Contrary to the EMT’s assertions, the administrative law judge (“ALJ”) found that the EMT did not request union representation, and thus, was not entitled to union representation. The ALJ’s findings were based in part on not crediting the EMT’s testimony. In making this finding, the ALJ noted some inconsistencies in his story. The ALJ also noted that on several occasions in the past, the EMT had requested and had been given union representation. Furthermore, the ALJ found that because the EMT demonstrated a thorough knowledge of his Weingarten rights, it did not make sense that he waited to complain about not receiving union representation until three months after the interview — when he filed his charge.

Notably, the ALJ also found that the EMT was not entitled to union representation because the interview was not an “investigative interview” for which the Weingarten rights applied. Rather, the interview was a police interrogation. Therefore, the EMT’s Weingarten rights did not apply.  Thus, not every meeting with employees constitutes an investigative interview under Weingarten, and even if an investigative interview does take place, the employee must actually request union representation to invoke his Weingarten rights.

View of United States Supreme Court Building, Washington, DC.

By: Robert J. Carty, Jr., Esq.

As our regular readers already know, the Supreme Court is poised to decide one of the most contentious issues facing the wage-and-hour world—namely, whether class- and collective-action waivers render workplace arbitration agreements unenforceable.

Well, it seemed poised until today.  Now we need to sit tight until at least October.

First, a quick recap.  A few weeks ago, the Supreme Court consolidated and granted certiorari in three appeals, one each from the Fifth, Seventh, and Ninth Circuits.  As consolidated, these cases ask the Court to decide whether Section 7 of the National Labor Relations Act (which protects certain “concerted activities”) prohibits class- and collective-action waivers in workplace arbitration agreements—even though the Federal Arbitration Act strongly favors such provisions.

Given the timing of the Court’s actions, many had speculated that oral argument would occur this April, likely leading to a decision by the end of June.  Today, however, the Court notified the parties that oral argument will be scheduled in the 2017 term, which begins this October.  In other words, we don’t expect this issue to be decided until sometime after argument—and the earliest argument will occur is October.

We can’t be sure why the Court has decided to set oral argument in the next term, but we can make an educated guess that the new Administration and the pending nomination of Judge Neil Gorsuch played a role.  Regardless, we have our eye on the situation and will keep you updated as things develop.  Stay tuned.

Striking  By: Bryan R. Bienias, Esq.

Seyfarth Synopsis: Court of Appeals for the First Circuit reversed the NLRB, holding that the Board lacked substantial evidence to find that the hospital group unfairly preferred nonunion workers when filling nonunion positions.

The National Labor Relations Board may not invalidate employment policies that accomplish legitimate goals in a nondiscriminatory manner “merely because the Board might see other ways to do it.” Such was the message the U.S. Court of Appeals for the First Circuit delivered to the Board in Southcoast Hospitals Group v. NLRB, No. 15-2146 (1st Cir. 2017).

The Court ruled that the Board lacked substantial evidence in finding that the hospital group discriminated against union members by giving nonunion workers a hiring preference for nonunion positions. The union’s contract granted union employees a similar preference when applying for union positions. According to Southcoast, the policy was intended to “level the playing field” and stave off staffing complaints by its nonunion workforce.

The Board argued that the policy tilted the playing field too far in favor of nonunion employees, claiming the number of nonunion positions “pales in comparison” to the number of positions covered by the union hiring policy and that nonunion hiring preference covered two facilities, as opposed to the single facility covered by the union policy.

This was not enough, the Court ruled. While the Court acknowledged that the nonunion policy covered more positions than the union hiring policy, union workers were not disproportionately harmed, given that the ratio of covered positions to covered employees was substantially the same under both policies. Likewise, nonunion employees had to compete with workers from two hospitals, as opposed to union workers’ need to compete only with workers from one hospital.

The Court also noted that the Board ignored other aspects of the hiring policies that still leave union members at a comparative advantage, namely that union seniority trumps qualifications for open union positions, while Southcoast is required to choose “the best qualified” candidate for a nonunion position, regardless of seniority.

Employer Takeaway

Employers must often walk a fine line in order to apply different policies to union and nonunion employees in a non-discriminatory manner. However, as the Court in Southcoast makes clear, this does not handcuff employers from attempting to “level the playing field” by giving certain advantages to nonunion employees, so long as the policy does not disproportionately harm union employees and is supported by a legitimate and substantial business justification.