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Gavel By: Christopher Lowe, Robert T. Szyba, Kaitlyn F. Whiteside

Seyfarth Synopsis: The New Jersey Appellate Division reinstated plaintiff’s state law discrimination and retaliation claims, finding the claims were not pre-empted by Section 301 of the LMRA.

In a published opinion issued on May 9, 2017, the three-judge panel of the New Jersey Appellate Division held that a union member’s Law Against Discrimination (“LAD”) and Workers’ Compensation Law (“WCL”) claims were not preempted by Section 301 of the Labor Management and Relations Act (“LMRA”), despite the presence of an applicable collective bargaining agreement (“CBA”) and potential CBA-based defenses available to the employer.

The plaintiff was employed as a commercial truck driver, and was a member of Teamsters Local Union No. 813.  Following a workplace injury, he was cleared for light duty work, so long as it did not involve commercial driving. The plaintiff then filed a workers’ compensation claim with the New Jersey Department of Labor and Workforce Development, Division of Workers’ Compensation.

Three months after filing the workers’ compensation claim, the company asked plaintiff to leave work, and by letter to the union, indicated that plaintiff would need to be recertified for duty as required by Department of Transportation (“DOT”) regulations before returning to work.  The company scheduled an independent medical examination, but the plaintiff declined to undergo the exam, and therefore, was not returned to work.

The union filed a grievance challenging the company’s failure to reinstate the plaintiff.  The grievance proceeded to arbitration, and was denied by the arbitrator who concluded that reinstatement would require examination and recertification pursuant to the DOT regulations.

The plaintiff then sued in New Jersey Superior Court alleging unlawful discrimination under the LAD and retaliation under the WCL. Concluding that the claims were pre-empted, the trial judge dismissed the complaint for lack of subject matter jurisdiction.  The plaintiff appealed.

The question before the Appellate Division was whether the trial judge correctly concluded that the LAD and WCL claims were pre-empted under Section 301 of the LMRA, which pre-empts claims that require an interpretation of a collective bargaining agreement.

The court first looked to the elements of the plaintiff’s claim that the company retaliated against him based on his workers’ compensation claim, which required showing that (i) he made, or attempted to make, a claim for workers’ compensation, and (ii) he was discharged for making that claim.

According to the court, under U.S. Supreme Court precedent in Lingle v. Norge Div. of Magic Chef, 486 U.S. 399 (1988), each of these is a “purely factual inquiry,” and therefore, requires no interpretation of the CBA.  Plus, plaintiff did not make any mention of any provision of the CBA in his complaint.  So, his WCL claim was not pre-empted under Section 301.

The court then turned to the LAD claim, which proved to be a more difficult question.  To establish a prima facie LAD claim, the plaintiff had to demonstrate (i) he was disabled; (ii) he was objectively qualified for his former position; (ii) he was terminated; and (iv) the company sought a replacement.  Although the court determined that each of these also presented a “purely factual inquiry,” the court recognized that the company may have a CBA-based defense based the CBA’s requirement that employees promptly comply with DOT physicals. Further, whether the plaintiff was “objectively qualified” for the position potentially implicated the CBA.

Ultimately, however, the appellate court determined that neither the requirement that the plaintiff was objectively qualified nor the company’s potential defenses required an interpretation of the CBA that would preempt the claim.  As noted by the New Jersey Supreme Court in Puglia v. Elk Pipeline, Inc., 226 N.J. 258, 279 (2016), “… a CBA-based defense is ordinarily insufficient to preempt an independent state-law action.”

Further, the CBA was not the only source, or even the primary source of the plaintiff’s duty to recertify.  Instead, it was DOT regulations that set forth the requirement and “To the extent an interpretation of them is required, federal law [and not the CBA] must be applied.”

Looking forward, unionized employers in New Jersey who are defending against claims under state law thus face additional hurdles stemming from decisions like Hejda v. Bell Container Corporation. For example, a Section 301 claim, which is a claim under a federal statute, could be removable to federal court.  Without the Section 301 claim, a defendant thus loses a potential basis for removal.  Additionally, where CBAs otherwise provide an administrative process that must be utilized before a Section 301 claim is filed, employers may lose the ability to enforce the administrative remedies provisions, or otherwise have a lawsuit dismissed if the administrative remedies were not exhausted. Last, unionized employees have a greater ability to circumvent Section 301’s limitation to contract-based remedies, and instead seek the full panoply of tort-based remedies that the LAD affords plaintiffs. Accordingly, the dynamics for any employer with an organized workforce that is defending a claim under New Jersey state law have shifted further in the direction of state-law protections, and away from the uniformity and precedent of the LMRA.

Hejda v. Bell Container Corporation, while not a sea change in the law, is representative of the both the trend in New Jersey of courts declining to find Section 301 pre-emption, as well as the courts’ interpretation of the LAD as a wide-reaching, liberally-construed source of employee protections.

By: Christopher W. Kelleher, Esq.

Seyfarth Synopsis: At today’s client symposium, “First 100 & Beyond: Strategy & Planning Summit for Businesses,” Brad Livingston offered insight into the state of the National Labor Relations Board under the Trump Administration.

At today’s client symposium on legal developments after 100+ days of the Trump Administration, Brad Livingston, the Chair of Seyfarth Shaw’s Labor Relations Practice Group, explained that change will occur — albeit slowly — with the National Labor Relations Board (“NLRB” or “Board”).  And he said that the question is whether there will be time for a Trump Board to restore some balance to decisions reached over the past eight years that many believe have been the most pro-union in the agency’s history.

Brad explained that while most other agencies that administer federal employment laws may shift their priorities, enforcement agendas, and litigation theories under different presidential administrations, the underlying statutes are ultimately interpreted by the courts. So although the EEOC may advance a new theory under Title VII or the ADEA, the courts will determine what those statutes mean.  And even though the federal courts may differ somewhat in their interpretations from time to time, over a longer period those decisions will end up being harmonized as the law gradually evolves.  As an example, Brad explained how while Title VII itself has remained relatively unchanged, over time the courts have eventually expanded its reach to cover quid pro quo sexual harassment, then hostile environment sexual harassment, same-sex sexual harassment, and now sexual orientation discrimination.

The NLRB is different in that  — rather than the federal courts — the agency itself decides what the National Labor Relations Act (“NLRA”) means, and these decisions by the administrative agency are given great deference by the courts as long as they are a permissible interpretation of the law (even where the court might have decided otherwise).  These NLRB decisions principally come from its General Counsel and five-member Board, all of whom are presidential appointees.  Historically, the president has appointed from his political party the General Counsel and three of the five Board members, with the two remaining Board members coming from the other political party.  Thus, and unlike with other employment laws such as Title VII, NLRB decisions regularly shift back and forth as presidential administrations change between the political parties.  So while the NLRA has been essentially unchanged for 70 years, there have been significant swings in how it has been interpreted and applied over that time.

Brad explained that there are two current vacancies on the five-member NLRB.  The Board’s Chairman is a Republican appointee whose term ends this December, and its other two current members are Democratic appointees whose terms end in late 2018 and 2019.  The General Counsel is a Democratic appointee whose term ends late this year.  So for the moment, any decisions reached by the Board will continue to have a Democratic and pro-union majority.  And while President Trump has had the opportunity to appoint two additional Republican members to the Board (giving it a Republican majority), in his first 100+ days of office he has not done so.  Even after those appointments are made and then confirmed by the Senate, it will take some time for the new Board members to get up to speed and actively participate in decisions.  With the Republican Board Chairman’s term coming to an end in several months, his reappointment or any new appointment and confirmation will likewise take time.

So for the moment, nothing has changed at the NLRB.  And even when Republican appointees eventually constitute the majority of the Board and its General Counsel, change will occur slowly.  While the Board has the authority to use rulemaking (which itself is a time-consuming process), it seldom does so.  Instead, the Board typically changes its interpretation of the law in its decisions regarding the unfair labor practice and union recognition cases brought before it. Significant issues that the Board may wish to address need to “percolate” up in cases pending before it before the NLRB can signal a shift from the interpretations of the prior administration.  Thus, the Board is limited to deciding the issues and cases raised by employers, employees and unions in individual cases. NLRB precedent does not change where there is no case raising that issue.

Brad noted that over the past eight years, the NLRB has issued scores of rulings that both limit the rights of employers and expand the rights of individual employees and unions far beyond the decisions of any previous Democratic administration.  Among many others, he gave examples of decisions that: ban class action waivers in employment agreements; prohibit discipline for certain types of employee misconduct; deem illegal many common employer handbook clauses, policies, and work rules; expand union and employee access to employer and non-employer property; permit employee use of an employer’s email systems for union purposes; expedite union elections; permit unions to seek “micro” or “fractured” bargaining units and restrict employer challenges to them; greatly expand joint-employer status; obligate employers to negotiate discipline with unions during initial contract negotiations; restrict a finding of impasse in labor negotiations; restrict employers from hiring permanent replacements during strikes; expand successorship status and the obligation to assume a predecessor employer’s labor agreement during the sale of a business; limit the interpretation of contractual waivers of the obligation to bargain with a union; and expand employee status and the right to organize to many college students.

Noting that the employer community wants and expects change from the NLRB, Brad cautioned that the current vacancies have not been filled, the confirmation of new Board members will take time, those new Board members will need to get up to speed before issuing decisions, and any eventual changes to the extraordinary NLRB decisions of the past 8 years are dependent on the same issue arising in a future case. He concluded by noting that we can expect change, but both less and more slowly than most employers would like to see.

 

NLRB (Logo)By: Glenn Smith, Esq.  & Kaitlyn F. Whiteside, Esq.

Seyfarth Synopsis: In a unanimous decision, a three-member panel of the NLRB found that a cab company violated the NLRA by changing the length of the waiting period for employee health insurance from one year to sixty days.

On May 16, 2017, Chairman Miscimarra, Member Pearce, and Member McFerran upheld an Administrative Law Judge’s determination that Western Cab Company violated Section 8(a)(5) of the NLRA by failing to give notice and an opportunity to bargain to the United Steelworkers during its 2014 implementation of the Patient Protection and Affordable Care Act (“ACA”).

According to the Board, because the ACA only prohibits waiting periods for employee health insurance of longer than ninety days, the employer had discretion over whether to reduce its one-year waiting period to “a 60-day waiting period….a 30- or 90-day waiting period, or even no waiting period at all.” Therefore, the employer owed the Union notice and an opportunity to bargain over the waiting period and any other aspects of the law that gave the employer discretion in compliance, such as the notice and enrollment and even the overall type of health insurance.

The reality for employers, which was not discussed by the Board, is that quite often employers are forced to attempt to make significant changes very quickly in order to comply with a newly effective law. According to the Board, these changes must be made while also navigating the legal obligation to provide notice and an opportunity to bargain to the Union over the implementation.  This obligation requires that employers have a robust and sophisticated understanding of the requirements of the law, and those aspects that may be discretionary, with enough advance time to allow for notice and bargaining with the Union.

Here, Western Cab received notice from its insurance provider in December 2013 that as of January, the ACA would require a significant shortening of Western Cab’s current waiting period, which at the time was one year. According to testimony before the ALJ, it was the insurance provider that mistakenly indicated that the waiting period under the ACA had to be sixty days.  As a result, Western Cab may not have even been aware when it implemented the sixty-day rule that it had made a discretionary decision.

Although he joined the majority, Chairman Miscimarra took the opportunity in a footnote to re-emphasize that “employers’ compliance with the NLRA should not frustrate their compliance with the complex array of non-NLRA legal obligations that confront them.” Further, in his view, the question is not simply whether the employer had any discretion in implementing the law.  Rather, the Chairman would focus on “whether the actions are similar in kind and degree to what the employer did in the past.”

In addition to finding a violation for failure to bargain over the ACA implementation, the panel also found the employer violated the Act by failing to give pre-imposition notice and an opportunity to bargain over discipline issued during negotiations for a first contract with the Union as required in the Board’s recent Total Security Management decision.  For more information on this disciplinary bargaining obligation, see our September 29, 2016 blog post here.  In a footnote, Chairman Miscimarra reiterated his disagreement with Total Security Management, a telling reminder that reversal may be in the cards should an appropriate case come before the Board when and if President Trump’s nominees to the NLRB are confirmed.

The key takeaway here is that for employers with unionized workforces, any change in terms and conditions of employment, whether positive or negative, requires notification and bargaining with the union.

casino  By: Howard M. Wexler, Esq.

Seyfarth Synopsis: A three-member panel of the U.S. Court of Appeals for the D.C. Circuit put the National Labor Relations Board “on tilt” when it overturned a decision finding that Bellagio, LLC violated Section 8(a)(1) of the NLRA when it interfered with an employee’s Weingarten right to have a union representative present during an investigatory meeting; retaliated against him for invoking that right; unlawfully surveilled him; and coercively prevented him from discussing his suspension with other employees.

In Bellagio, LLC v. NLRB¸ No. 15-1327 (D.C. Cir. April 25, 2017), the U.S. Court of Appeals for the D.C. Circuit denied the NLRB’s cross-application for enforcement of its decision, where the NLRB found that Bellagio, LLC violated Section 8(a)(1) of the NLRA by interfering with an employee’s Weingarten right to have a union representative present during an investigatory meeting; retaliating against him for invoking that right; unlawfully surveilling him; and then coercively preventing him from discussing his suspension with other employees.  The Court ruled against the NLRB on each of the Board’s findings.

Background

A guest complained that an employee inappropriately solicited a tip and directed a sarcastic comment towards him when he did not provide the employee with a tip. When the employer tried to interview the employee, the employee requested union representation.  The employer then asked if the employee would provide a written statement, which the employee refused without representation.  The employee declined to contact a union representative himself so the employer tried to find one for him.  When they could not, the employee was placed on paid suspension pending investigation.  While gathering his belongings before leaving the building, the employee started to tell a co-worker about what happened, at which point an employer representative entered the area and told him that he could not discuss the matter at that time and directed him to leave.

The Board found that the employer had violated the Act when it asked the employee to provide a statement after he requested union representation, suspended him in retaliation for asking for a representative and “engaged in coercive conduct to compel [employee] to cease speaking to coworkers about his discipline.”

On appeal, the D.C. Circuit Court dealt Bellagio a full house and overturned the Board’s decision. As to the Weingarten violation, the Court held that, “the mere fact that an employee’s request for union representation is not met does not, without more, mean that the employer has committed an unfair labor practice.”  Once an employee validly requests a union representative, an employer has three paths open to it: grant the request, end the interview, or offer the employee the choice between having an interview without a representative or having no interview at all.  Here, the employer “worked diligently” to find a representative, however, when it could not, it placed the employee on paid suspension and conducted the interview the next day (with union representation).  The employer simply allowed the employee to play his hand and either have the interview unaccompanied by a representative, or have no interview and forego any benefits that might be derived from one, as is permitted under Weingarten.

The Court then doubled down on its decision and rejected the Board’s retaliation finding as the employee’s job status was not adversely affected by the paid suspension and held that there is nothing in the record to suggest that the employee was surprised or otherwise intimidated during his interactions with the supervisors.

Bellagio’s jackpot was complete when the Court rejected the Board’s unlawful surveillance determination, finding that it “borders on absurd”; as well as the Board’s unlawful coercion decision, finding that, “it was perfectly reasonable for the Company to instruct [employee] to leave the workplace pending investigation of his alleged wrongdoing.”

Employer Takeaway

The decision highlights that employers are not without recourse to continue with an investigation simply because an employee has requested to have a union representative present and the employer for whatever reason is unable to provide a representative. The Court’s decision is a reminder that “the Board must take account of the context in which a request for union representation has been made as “the [Weingarten] right is not absolute, however, because it may not interfere with legitimate employer prerogatives.”  Importantly, the “mere fact that an employee’s request for union representation is not met does not, without more, mean that the employer has committed an unfair labor practice.”  Employers must, however, tread carefully and not check in the dark as these situations are highly variable and a bad beat remains a possibility.

Texting  By: Jennifer M. Holly, Esq.

Seyfarth Synopsis: The Second Circuit agrees with the Board that the use of profanity in a Facebook post was not “opprobrious enough” to lose the NLRA’s protections and justify the employer’s termination of the employee.

A server whose “conduct [sat] at the outer bounds of protected, union-related comments” when he posted that his manager is a “nasty mother f***er” and “f*** his mother and his entire f***ing family,” was not “opprobrious enough” to lose the protection of the NLRA, a three-judge panel for the Second Circuit Court of Appeals ruled in NLRB v. Pier Sixty, LLC, No. 15-1841 (2nd Cir. Apr. 21, 2017).

Pier Sixty operates a catering company in New York, NY. In early 2011, many of its service employees began seeking union representation.  Following a very contentious union organizing campaign, Pier Sixty employees voted to unionize on October 27, 2011.

Two days before the election, during the work day, a Pier Sixty supervisor gave employee Perez and two other servers instructions, which the Board’s opinion described as “harsh tone,” and included the following instructions: “stop chitchatting” and “spread out, move, move.” Approximately 45 minutes later, Perez, upset by the “continuing disrespect for employees,” wrote the following Facebook post about the supervisor during an authorized break:

Bob is such a NASTY MOTHER F***ER don’t know how to talk to people !!!!!! F*** his mother and his entire f***cking family!!!! What a LOSER!!!! Vote YES for the UNION!!!!!!!

The post was publicly accessible and Perez knew that his post would be visible to his coworkers. Perez removed the post three days later. Management, however, had already become aware of the post, and after an investigation, the employer terminated Perez on November 9, 2011.

Perez filed an NLRB charge alleging retaliation for engaging in protected concerted activities. On April 18, 2013, the ALJ issued a decision finding that Pier Sixty had violated sections 8(a)(1) and 8(a)(3) of the NLRA by discharging Perez in retaliation for his protected activity. Pier Sixty filed exceptions, and a three-member panel of the NLRB affirmed the ALJ’s decision on March 31, 2015.  The NLRB filed an application for enforcement, and Pier Sixty filed a cross-petition for review.

The Second Circuit affirmed the NLRB’s determination based on the deference afforded to the ALJ’s factual findings. The Court explained that in light of the General Counsel’s guidance for evaluating employees’ use of social media to post public criticisms of their employers and workplaces, a nine-factor “totality of the circumstances” test in social media cases had emerged.  The Court acknowledged that while the test the ALJ applied may not have “adequately balance[d] the employer’s interests, Pier Sixty did not object to the ALJ’s use of the test in evaluating Perez’s statements before the Board.”   Accordingly, the Court did not address the validity of the applied test.

Rather, Pier Sixty argued that the Board’s decision that the comments were not so egregious as to exceed the Act’s protection was not supported by “substantial evidence” in the record. The 2nd Circuit disagreed and found:

  • Although the post contained vulgar attacks, the subject matter of the message included workplace concerns.
  • Pier Sixty consistently tolerated widespread profanity amongst its workers, including supervisors, and had never before terminated any employees for such behavior until two days before the union election.
  • The location of the comments was an online mode of communication among coworkers and was not in the immediate presence of coworkers.

Accordingly, the Court found that the Board did not err in ruling that the post, while “vulgar and inappropriate,” was not so egregious as to exceed the NLRA’s protection.

Takeaways for Employers:

  • The Board will not apply the Atlantic Steel test to cases involving social media, even if the posts are public in nature, in light of the fact that the place of discussion is the internet and not face-to-face in the workplace.
  • Companies should ensure policies and handbooks comply with the NLRB’s current guidance on social media and do not interfere with employees engaging in protected concerted activity when off duty. However, while policies prohibiting vulgar and offensive comments need to be sensitive about infringing on NLRA-protected rights, employers should not hesitate to enforce those policies in appropriate circumstances.
  • Employee discipline should not be selectively enforced to prohibit behaviors that relate to union-related activities; discipline should be applied uniformly to all employees.

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.