Employer Labor Relations Blog

NLRB, ignoring criticism from the Courts, overrules Planned Building Services in Pressroom Cleaners

Posted in Current Events, Unfair Labor Practices

By:  Michael Rybicki, Esq.

A Board Majority has used Pressroom Cleaners, 361 NLRB No. 57 (September 30, 2014) to overrule Planned Building Services, 347 NLRB 670 (2006), a decision that had responded to the criticism of various Courts with respect to the remedies imposed by the Board in successorship cases. Members Miscimarra and Johnson filed a lengthy and well-reasoned dissent.

In Pressroom Cleaners the employer was found to have committed certain unfair labor practices and to be the successor to the bargaining relationship of its predecessor, a conclusion that was supported by the evidence. The Administrative Law Judge, applying Planned Building Services, directed that the employer have the opportunity in the compliance stage of the proceeding to limit its liability by showing that even in the absence of its unfair labor practices, it would not have agreed to the monetary provisions of the predecessor’s contract with the Union.

The Majority overruled Planned Building Services, which it dismissed as a “well-meaning” but “fundamentally flawed” attempt to balance two competing principles: placing the burden of uncertainty on the wrongdoer and avoiding a potentially punitive remedy. Coming down squarely in favor of potentially punitive remedies, the Majority issued a “make whole remedy” ordering “restoration of the predecessor’s terms and conditions until the parties bargain in good faith to agreement or impasse,” slip op. at p. 6.

While Members Miscimarra and Johnson concurred with the findings of successorship and unlawful discriminatory hiring practices, they dissented from the remedy imposed by the Majority as violating two of the cardinal principles embodied in the National Labor Relations Act, those being that the Board’s authority is remedial, not punitive, and that the Board may not impose any term of an agreement on the parties in a collective-bargaining relationship. The Dissent noted further that in Planned Building Services “the Board did not adopt the more extreme stand [the Ninth and D.C. Circuits] proposed of limiting the duration of the backpay period to a reasonable period of bargaining [but] instead … adopted the more modest approach articulated by the Sixth Circuit [permitting a successor] an opportunity to prove when any required bargaining would have resulted in impasse or an agreement on different terms than those set forth in the predecessor’s collective-bargaining agreement,” id at p. 12.

Coming on the heels of numerous other controversial decisions, see e.g., FedEx Home Delivery, 361 NLRB No. 55 (September 30, 2014) and CNN America, Inc., 361 NLRB No. 47 (September 15, 2014), we expect a lot of activity in the Courts of Appeal as employers challenge the current Board’s efforts to fundamentally re-write the law.

NLRB Rules That Facebook Comments And Pressing The “Like” Button Constitute Protected Concerted Activity

Posted in NLRB, Protected Concerted Activity, Unfair Labor Practices

By Jeffrey A. Berman and Candice T. Zee

In Triple Play Sports Bar & Grille, 361 NLRB No. 31 (2014), the National Labor Relations Board ruled that a Facebook discussion regarding an employer’s tax withholding calculations and an employee’s “like” of the discussion constituted concerted activities protected by the National Labor Relations Act (“Act”). The Board also held that the employer’s internet and blogging policy  violated the Act.

The employer, Triple Play Sports Bar and Grille, is a bar and restaurant. In 2011, at least two employees discovered that they owed more in state income taxes than they expected. Employees discussed the situation at work and complained to Triple Play, which had planned a staff meeting to discuss the employees’ concerns. Prior to the meeting, a former employee posted the following “status update” to her Facebook page:

Maybe someone should do the owners of Triple Play a favor and buy it from them.  They can’t even do the tax paperwork correctly!!! Now I OWE money…Wtf!!!!

Several Facebook friends posted comments in response to the status update, including two of Triple Play’s employees. One employee commented, “I owe too.  Such an asshole.” A second employee “Liked” the former employee’s status update, but posted no comment. When Triple Play discovered that two of its employees had participated in the Facebook discussion, it terminated their employment for disloyalty.

The Board held that Triple Play violated the Act by terminating the employees’ for engaging in activities protected by the NLRA. In its analysis, the Board first determined that the Facebook discussion at issue should not be analyzed under the Atlantic Steel Co., 245 NLRB 814 (1979) standard.  To determine whether an employee loses the Act’s protection under Atlantic Steel, the Board balances four factors: (1) the place of the discussion; (2) the subject matter of the discussion; (3) the nature of the employee’s outburst; and (4) whether the outburst was provoked by the employer’s unfair labor practices. The Board noted that the first factor alone supported its conclusion that Atlantic Steel’s framework is tailored for workplace confrontations with the employer, and not for the type of employee activities in this case.

Instead, the Board applied the standards set forth by the US Supreme Court in the Jefferson Standard and Linn cases. In Jefferson Standard, the Court upheld the discharge of employees who publicly attacked the quality of their employer’s product and business practices without relating their criticisms to a labor controversy. NLRB v. Electrical Workers Local 1229 (Jefferson Standard), 346 US 464 (1953). In Linn, the Court limited state-law remedies for defamation in the course of a union-organizing campaign to instances where the complainant could show that “the defamatory statements were circulated with malice” and caused damage.  Linn v. Plant Guards Local 114, 383 US 53, 64-65 (1966).

Applying Jefferson Standard and Linn to the facts of the case, the Board determined that both the employees’ comments and “like” in response to the Facebook post constituted a dialogue among employees about working conditions that was protected by the Act. The Board determined that the evidence did not establish that the discussion was directed to the general public. Although the record did not establish the former employee’s privacy settings on Facebook, the Board noted that the comments were posted on an individual’s personal page rather than a company page providing information on its products or services. The Board concluded that the employees’ comments were not “so disloyal  as to lose the Act’s protection” because they did not disparage their employers products or services, or undermine its reputation. The Board also held that the comments were not defamatory, but simply a statement of a negative personal opinion of Respondent’s owner.

The Board also found that the Triple Play’s Internet/Blogging policy in the employee handbook violated Section 8(a)(1) of the Act. The policy warned that “engaging in inappropriate discussions about the company, management, and/or co-workers, the employee may be violating the law and is subject to disciplinary action, up to and including termination of employment.”

The Board held that the policy was overly broad and unlawfully chilled employees in the exercise of their Section 7 rights. It further noted that Triple Play’s subsequent termination of the employees who engaged in the Facebook discussion further demonstrated the employer’s improper prohibition of Section 7 activity. The Board ordered Triple Play to discontinue using the policy.

In his dissent, Member Miscimarra agreed with his colleagues that Triple Play unlawfully discharged the employees and questioned them about their Facebook activity. He disagreed, however with the finding that the Internet/Blogging policy violated the Act. Member Miscrimarra noted that the language of the policy did not expressly or implicitly restrict Section 7 activity, and was not applied to restrict protected activity. Specifically, Triple Play did not apply or refer to the policy when it discharged the employees.

What does this mean for employers? Employers must tread lightly before disciplining employees for social media comments that might appear to be critical of their employer. Employers should also review their social media policies to make sure that they are not in violation of the Act. Remember, the employees in this case were not a part of any union or labor organization.

Victory? Indiana Right to Work Act Survives Seventh Circuit Review–Indiana Supreme Court Up Next

Posted in Current Events, State Law

By:  Ronald J. Kramer, Esq.

It is black letter law that states can prohibit contracts from requiring bargaining unit members to pay money to unions, right?  Maybe not, at least according to the Chief Judge of the Seventh Circuit.  On September 2, 2014, the Seventh Circuit upheld Indiana’s Right to Work Act in a contested 2-1 decision that ultimately may raise more questions than it resolves.  Sweeney v. Pence, Case No. 13-1264 (7th Cir. Sept. 2, 2014).  And the Indiana Supreme Court will soon be weighing in on state constitutional issues as well.

Indiana’s 2012 Right to Work Act (“Act”) prohibits any person from being required to become a union member or to pay dues, fees, assessments or other charges of any kind or amount to a union (or a similar equivalent to charity in lieu to the union).  Such right to work acts have existed for decades, even well before the 1947 Taft-Hartley Act added Section 14(b) to the National Labor Relations Act (“NLRA”), which expressly recognized the right of states to prohibit union “membership” as a condition of employment.

The Union challenged the Act on two grounds.  First, the Union claimed that the Act was preempted by NLRA Section 8(a)(3), which expressly permits bargaining parties to require union membership as a condition of employment.  According to the Union, NLRA Section 14(b) only gave states the limited right to ban union security agreements requiring “membership,” and thus states had no authority to interfere with provisions addressing what non-union bargaining unit members might have to pay for to cover their “fair share” of bargaining costs.  As long as bargaining unit personnel who did not want to be members did not have to become members or pay full membership dues, the Union claimed, they could be required to pay for the costs the Union incurred in representing them under its statutory duty of fair representation.

The Court majority disagreed.  Initially, the majority found “membership” to have the same meaning under both NLRA Sections 8(a)(3) and 14(b), and noted that the Supreme Court had described union membership under Section 8(a)(3) to be whittled down to its “financial core,” given decisions preventing unions under union security agreements from requiring non-members to pay more than the union’s actual bargaining costs.  Thus, according to the majority, any bargaining unit member who paid money to the Union was a union financial core “member” under both Sections 8(a)(3) and 14(b).  Accordingly, under Section 14(b) states could ban parties from negotiating provisions requiring the payment of any fees to the union.  Moreover, when it adopted the Taft-Hartley Act, Congress did so to protect existing right to work laws, seven of the twelve of which had language similar to Indiana’s law.  Thus, the legislative history supported the majority’s view that Indiana’s law fell within a state’s authority under Section 14(b).  Last but not least, the sole appellate court to directly address the issue similarly found as much.

Second, the Union raised numerous federal constitutional claims.  The Court dismissed the Contracts and Ex Post Facto Clause arguments since the Act expressly provided it would only apply prospectively as existing collective bargaining agreements expired.  The Court also dismissed the Unions’ Equal Protection Clause claim that somehow the Act infringed on union members free speech rights by taking away union financial resources, and/or infringed on the right of union membership, which the Union asserted was a fundamental right since it involved the exercise of First Amendment association and assembly rights.  The Court found that unions have no constitutional right to non-member fees, and that there is no fundamental right to union membership.  Given the Act did not encroach on any “fundamental” rights, the Court applied a deferential standard of review to the law to find that the statute bore a reasonable relation to its legislative purpose of contributing to a business friendly environment.

The Court majority also found that the Act did not constitute an unconstitutional taking — i.e., that the Union was being required to provide a service (fair representation regardless of membership) without just compensation.  The majority noted that the Union never raised the argument, and thus had forfeited it.  Nonetheless, the majority questioned whether the state was even the proper party in such a claim since, while Indiana law prohibited the Union from collecting fees, it was federal law that required it to provide fair representation.  The majority asserted that the Union nonetheless was justly compensated for its fair representation obligation by the federal law’s grant of exclusive representation to the Union — something which provided the Union with benefits and powers that it would not otherwise have.

Chief Judge Wood issued an extensive dissent.  Judge Wood agreed with the Union that Section 14(b) only permitted states to prohibit union membership, not to prohibit unions from collecting fees for representational services rendered.  In her review of the underlying precedent, Judge Wood found the Supreme Court never considered non-members who were required to pay representation fees to be “members” under Section 14(b).  Moreover, in its cases addressing Section 14(b), the Supreme Court had not addressed the issue at hand but instead only found that states could prohibit agreements from requiring membership or attempting an end run by imposing non-member fees equal to those paid by union members.  Judge Wood dismissed the legislative history argument, noting that the Court had no idea what Congress thought, and that Congress also could have easily believed the courts would decide which state laws complied with Section 14(b).  In any event, the statutory language itself should control.

If the Act was not preempted, Judge Wood argued that it violated the Takings Clause.  The government may only confiscate private property for public use with just compensation, and is prohibited from taking property from one private party for the sole purpose of transferring it to another private party, regardless of whether “just” compensation is paid.  Here, according to Judge Wood, the state did exactly that by forcing one private party, the Union, to give services to another private party, non-union members.  Judge Wood  claimed no public purpose for the taking was even alleged.  Judge Wood compared the situation to the equivalent of requiring a gas station, if it wanted a business license, to give away gas to customers who did not want to pay.  Wood rejected the majority’s just compensation claims for numerous reasons, including that it ignored the tangible costs placed on unions in administering the contract and handling grievances.

Thus, Indiana’s Right to Work Act survived federal preemption and constitutional challenge, for now.  Judge Wood’s dissent may give the Union cause to consider a petition for rehearing en banc or a petition for certiorari, and no doubt it will give others the idea to bring their own challenges to Indiana’s Act or other similar state right to work statutes.

While Indiana’s Act survived Judge Wood, it is not out of the woods.  Two state courts, in cases involving IUOE Local 150 in September 2013 and the USW just last July, found the Act violated an Indiana State Constitutional provision barring the delivery of particular services without just compensation.  The Indiana Supreme Court is set to hear oral argument on IUOE Local 150’s case on September 4th.  Stay tuned.  This fight is far from over.

NLRB Holds Unwritten Confidentiality Policy Prohibiting Employee From Discussing His Disciplinary Record Violates NLRA

Posted in Concerted Activity, Protected Concerted Activity

By: Michele Haydel Gehrke, Esq.

In a 2-1 decision with Board Member Philip Miscimarra dissenting, the National Labor Relations Board recently held that Philips Electronics North America Corp. violated Section 8(a)(1) of the National Labor Relations Act by having an unwritten confidentiality rule prohibiting employees from discussing their disciplinary records.  Philips Electronics North America Corp., 361 NLRB 16 (August 14, 2014).  The Company argued that it  did not have a policy prohibiting employees from discussing discipline issues.  However, the majority of the Board found that documentation in an employee’s discharge file “effectively admitted” that the Company maintained an unwritten rule prohibiting employees from discussing discipline they had received.

The case arises from the discharge of Lee Craft in January 2012.  Prior to his discharge, Craft was placed on a final written warning because of his performance deficiencies, and disruptive, intimidating, and offensive behavior toward a female co-worker, Kim Coleman.  Craft was instructed to stay away from Coleman and her work area.

Instead, Craft drove his forklift to Coleman’s area and complained in a loud voice to co-workers that he had been disciplined because of Coleman’s allegations of harassment against him and showed co-workers the disciplinary form.  Co-workers confirmed that Craft had shared that he had been disciplined because of complaints by Coleman.

The Company fired Craft for “disrupting the operation, and sharing confidential documentation and information during working hours and continu[ing] to use intimidating language towards management.”  The disciplinary memo completed by the manager indicated that employees “are aware that disciplinary action forms are confidential and should not be shared on the warehouse floor at any time.”

Craft filed an unfair labor practice charge challenging his discharge.  An NLRB Regional Director issued a complaint alleging that the discharge violated the NLRA, and that the Company maintained an illegal policy prohibiting the discussion of employee discipline.

The Administrative Law Judge dismissed the Complaint, but the Board reversed in part.  While the Board upheld Craft’s discharge finding he would have been terminated regardless of sharing his disciplinary record, the Board found the Company violated Section 8(a)(1) by maintaining the unwritten confidentiality rule prohibiting employees from discussing discipline.  The Board explained that under established NLRB precedent, “[a]n employer violates Section 8(a)(1) when it prohibits employees from speaking with coworkers about discipline and other terms and conditions of employment absent a legitimate and substantial business justification for the prohibition.”  In justifying its finding of a violation, the Board stated: “It is difficult to see how the Respondent can claim that such a [confidentiality] rule did not exist and at the same time cite Craft for violating it.”

Board Member Miscimarra dissented finding that the record lacked sufficient evidence of the unwritten confidentiality policy, particularly in light of the unrebutted testimony from Company witnesses that no such policy existed.

This decision is an important cautionary tale that the Board will look not only at employer policies in an employee handbook, but also employer practices and any documentation in an employer’s records to determine if an employer is maintaining illegal policies.  Employers must be vigilant in their review of employee handbooks, and just as importantly, train managers and supervisors in the field on the legal limitations concerning confidentiality rules and other employer policies.  At the very least, managers and supervisors need to be aware that they must think carefully before disciplining an employee and creating documentation  evidencing a violation of an unspoken rule.

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.