Employer Labor Relations Blog

Local Tax Incentives Tied to Use of Union Labor —Preempted by the NLRA?

Posted in Current Events, Preemption, State Law

By: Skelly Harper, Esq.

Seyfarth Synopsis: Third Circuit rejects market-participant argument, opening the door for preemption challenge to local law tying tax incentives to use of union labor.

The case before the Third Circuit, Associated Builders & Contractors v. City of Jersey City,  involves a Jersey City ordinance providing developers with tax abatements when they build projects in certain areas. Developers are eligible for the tax abatements, however, only if they enter into project labor agreements requiring their contractors and subcontractors to use union labor for the duration of the project. The PLAs required by the ordinance specify, among other things, that “there will be no strikes, lock-outs, or other similar actions,” and that the developer and the union will agree to dispute-resolution procedures. The ordinance covers projects that are funded entirely by private investment.

The legal issue before the Third Circuit was application of the “market participant doctrine.” The plaintiffs in the case argued that the ordinance was preempted by both the NLRA and ERISA. They also argued that the ordinance is barred by the dormant Commerce Clause of the U.S. Constitution. The District Court had ruled that these arguments were not cognizable, because it concluded that Jersey City acted as a market participant — and not a regulator — when enforcing the ordinance. The Third Circuit reversed and remanded.

The Third Circuit held that the market-participant doctrine did not apply because Jersey City did not have a “proprietary interest” in the privately funded projects. The Third Circuit reasoned that providing tax incentives does not transform Jersey City into an investor, owner, or financier of a project. The Third Circuit therefore directed the District Court to decide whether the ordinance was preempted or barred. The decision offered “no comment” on whether the ordinance was in fact preempted the NLRA or ERISA or barred by the dormant Commerce Clause.

The decision sets forth a potential road map for all employers — not just developers — to consider whenever confronted with local tax incentives that are only available to employers with a union contract. While the challenge was brought in this case by the developers, employers outside the construction industry may be able to pursue similar arguments. For example, the Third Circuit’s theory should encompass local laws that require hotels have a union for the hotel developer to receive a tax break

So Much for Management Rights Clauses — The Board Strikes Again

Posted in Bargaining Unit, Collective Bargaining, NLRB, Uncategorized, Unfair Labor Practices

CBA  By: William P. Schurgin, Esq. & Karla E. Sanchez, Esq.

Seyfarth Synopsis: In Graymont PA, Inc. the Board majority ruled that a unionized employer cannot unilaterally change rules or policies that affect bargaining unit employees even if its collective bargaining agreement contains a broad management rights clause.

In Graymont PA, Inc., 364 NLRB No. 37 (2016), the union had represented a unit of the employer’s employees since the 1960’s.  The most recent bargaining agreement contained a management rights clause that stated that the employer retained:

the sole and exclusive rights to manage; to direct its employees; . . .  to evaluate performance, . . . to discipline and discharge for just cause, to adopt and enforce rules and regulations and policies and procedures; [and] to set and establish standards of performance for employees . . .

While the agreement was in effect, the employer announced that it was going to implement changes to its work rules, absenteeism policy, and progressive discipline policy.  These rules and policies were not a part of the agreement.  After the employer made the announcement, the union informed it that it wanted to discuss the announced changes. The employer explained to the union that although it had no obligation to bargain over the changes, it was willing to listen to the union.  The employer discussed with the union and made a few revisions to the work rules and absenteeism policy based on the union’s comments.  Nevertheless, the Board found that the employer’s changes to the work rules, absenteeism policy and progressive discipline policy constituted unlawful changes because the employer did not have the right under the agreement to make these unilateral changes.

The Board noted that for purposes of determining whether a collective bargaining agreement allows an employer to make unilateral changes, it applies the “clear and unmistakable waiver” standard.  Under Graymont PA, Inc., to constitute a clear and unmistakable waiver of a union’s right to bargain over changes in policies, procedures and/or work rules, the management rights clause must specifically refer to the types of rules/policies at issue. In other words, a broad management rights clause that provides management with the sole and exclusive right to “manage” and “direct its employees,” “evaluate performance,” “adopt and enforce rules and regulations and policies and procedures,” and “set and establish standards of performance” does not waive the right of the union, for example, to bargain over changes to an attendance rule or a progressive discipline policy. For such a waiver to be enforceable, according to the Board majority, the management rights clause must specifically refer to rules and regulations related to “discipline”  and  “attendance.”

This Graymont PA decision creates new restrictions on an employer’s ability to rely on a management rights clause to make changes to rules and/or policies without first bargaining with the union. At the same time, it opens the door for unions to file unfair labor practice charges over such changes. In order to evaluate an employer’s right to make unilateral changes in rules, regulations, handbooks or policies, every collective bargaining agreement’s management rights clause will need to be reviewed to determine how specifically it refers to the changes in question.

 

Follow Member Miscimarra on Twitter

Posted in NLRB

NLRB

For those of our blog followers who also use Twitter to receive some of their news, let us recommend NLRB Member Phil Miscimarra (@NLRBMiscimarra) as a great follow. Last week, Member Miscimarra recently began tweeting out new NLRB decisions in which he authored an opinion separate from the majority opinion, along with a brief description of the decision and a handy reference to the page on which his opinion commences.  By definition, this is a good clue that the decision is controversial, may be of particular importance to employers, and is ripe for challenge at the court of appeals, with Member Miscimarra doing his level best to provide a road map for a court inclined to disagree with the NLRB’s current majority.

Board Ties Judges’ Hands In Settling Cases Directly

Posted in NLRB, Uncategorized, Unfair Labor Practices

Hands Tied   By: Ron Kramer, Esq.

Seyfarth Synopsis: Overturning 25 years of precedent, the NLRB rules that an ALJ may only enter an order approving and incorporating settlement terms proposed by a respondent over the objections of the General Counsel and charging party if it provides a full remedy for all of the violations alleged in the complaint.

In United States Postal Service, 364 NLRB No. 116 (Aug. 27, 2016), the NLRB in a 2-1 decision took away from Administrative Law Judges the ability to approve substantial compliance settlements directly with a respondent over the objections of the General Counsel and the charging party.  For 25 years, ALJs have had this ability provided the offer substantially remedied the violations alleged in the complaint under the criteria set forth in Independent Stave Co., 287 NLRB 740, 743 (1987):  (1) whether the parties and individual discriminatees have agreed to be bound, and the position taken by the General Counsel; (2) whether the settlement is reasonable in light of the nature of the violations alleged, litigation risks, and the stage of the litigation; (3) whether there has been any fraud, coercion, or duress by any of the parties in reaching the settlement; and (4) whether the respondent has engaged in a history of violations or breached previous settlement agreements.

The ALJ in United States Postal Service applied Independent Stave to issue a settlement in the form of a consent decree in a Section 8(a)(1) threat case where the employer, in return for a non-admission clause, agreed to post the appropriate remedial notice for the required 60 days at the facility where the violation occurred, and to the entry of a default judgment if there was a failure to comply with the agreement for a six month period from the closure of the case on compliance.  The ALJ believed the offer reasonable in light of the minor and isolated nature of the violation, the risks of litigation, and the fact that the relief agreed upon was almost the same as if there had been a judgment.  The General Counsel and union opposed the settlement because of the notice posting was limited to the location of the violation, instead of being posted district-wide, and the General Counsel objected to the six month sunset provision on enforcement.

The Board majority reversed, and overturned twenty-five year old precedent applying Independent Stave to such consent orders.  The majority found that the Independent Stave standard was specifically formulated for evaluating a non-Board settlement between a charging party and respondent  to which the General Counsel was not a party.  In those situations, the majority concluded, a judge could justify approving a settlement that contained less than full relief  in deference to the charging party’s judgment concerning its own interests and the well-established policy favoring private dispute resolution.  Those considerations did not come into play where only the respondent was willing to settle.

Instead, the majority applied what it considered to be the standard in Electronic Workers IUE Local 201 (General Electric Co.), 188 NLRB 855, 957 (1971), that a judge could only agree to such a resolution over the objections of both the charging party and General Counsel if it provided “a full remedy for all of the violations alleged in the complaint.”  Here, the majority did not consider the six month sunset provision on enforcement to be full relief since there would not have been such a limitation had the General Counsel won the case.  Thus, the majority set aside the order and remanded the case for a hearing.

Member Miscimarra dissented. Among other points, Member Miscimarra:  (i) questioned how a judge could reasonably reject a settlement found reasonable under Independent Stave; (ii) noted the Board intended to apply Independent Stave to these cases given the criteria included taking into consideration who was agreeable to the settlement; (iii) rejected the idea that Independent Stave favored resolution of cases only where the charging party desired to settle; and (iv) pointed out the Board in General Electric never declared full relief was a pre-requisite for a judge-approved settlement.  Member Miscimarra also noted that the only relief the Board took issue with, the sunset provision, was not even something to which the union even objected.  Moreover, he claimed the sunset provision did not make the settlement less than a full remedy given it related more to the process of enforcing a breach, the aggrieved party did receive full relief, and such sunset clauses were expressly permitted in informal settlements.

The consent order in United States Postal Service was no different than the terms of many informal Board settlements, and better than many non-Board settlements.  It resolved the case without the cost and expense of a trial, and provided full relief — or if not something very close to it — to effectuate the purposes and policies of the Act.  Many counsel for the General Counsel and unions would have settled this case on those terms anyway.  By taking away a judge’s ability to enter into such a consent order, and instead requiring full relief, the Board is giving General Counsel and charging parties more leverage in determining whether cases settle and, if so, on what terms.  This will result in more cases going to trial.

NLRB General Counsel Seeks To Regulate and Target Employers with Independent Contractors

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

By: Adam J. Smiley, Esq.

Seyfarth Synopsis: NLRB General Counsel releases an Advice Memorandum finding that the misclassification of independent contractors amounts to a standalone violation of Section 8(a)(1) of the NLRA.

On August 26, 2016, Richard Griffin, the General Counsel of the National Labor Relations Board (“NLRB”), released an Advice Memorandum outlining his legal theory that the misclassification of employees as independent contractors constitutes a standalone violation of Section 8(a)(1) of the National Labor Relations Act (“NLRA”) because, in his view, the misclassification interferes with and restrains the exercise of Section 7 rights.[1]

In Pac. 9 Transp., Inc., the Employer used independent contractor drivers to perform services at the ports of Los Angeles and Long Beach.  In late 2012, the International Brotherhood of Teamsters began a “non-traditional” organizing campaign of the drivers, and as part of the campaign began filing individual wage and hour claims with the California State Labor Commissioner on behalf of drivers, claiming that the Company had misclassified them as independent contractors.  On November 13, 2013, the Teamsters filed an unfair labor practice charge against the Company (21-CA-116403), alleging that the Employer unlawfully threatened and interrogated certain drivers.  In response to the charge, the Company argued that the Region lacked jurisdiction because the drivers were independent contractors.  The Region dismissed this argument and determined that the drivers were statutory employees, and ultimately concluded that the Company had violated the NLRA.

On April 24, 2015, the Teamsters filed another charge (21-CA-150875), alleging that the Company’s purported misclassification of its drivers, by itself, violated Section 8(a)(1).  The Advice Memo regarding this charge concludes that, “the Region should issue a Section 8(a)(1) complaint alleging that the Employer’s misclassification of its employees as independent contractors interfered with and restrained employees in the exercise of their Section 7 rights.”

As we discussed in a previous blog post, the General Counsel has recently focused on misclassification issues.  While this Advice Memo focuses on a single case, it appears that the General Counsel seeks to apply his theory more broadly and involve the Board in other disputes regarding independent contractors.  And the extraordinary remedy suggested by the General Counsel – which is contained in a closing footnote – instructs the Region to seek an order requiring that the Employer stop referring to the drivers as independent contractors, and “require that the Employer take affirmative action to rescind any portions of its Agreements with its drivers that purport to classify them as independent contractors and to post the appropriate notice.”  In other words, the General Counsel of the NLRB seeks to expand the purview of labor policy to dictate the worker classification decisions of employers.

This novel theory will surely be challenged. The very premise of the General Counsel’s determination that a mistaken classification decision violates Section 8(a)(1) is tenuous and untested.  And even if a court agrees with this concept, Board action is ripe for a preemption challenge, at the very least regarding violations under the Fair Labor Standards Act.

We’ll keep you posted on future developments on this important issue.

[1] The Advice Memorandum was issued on December 18, 2015, but was not publically released until the underlying unfair labor practice was resolved.

Back to School: NLRB Takes Aim at Colleges and Universities

Posted in Collective Bargaining, Current Events, Organizing, Representation Cases

By:  Christopher W. Kelleher, Esq., Mary Kay Klimesh, Esq. & Jeffrey A. Berman, Esq.

Seyfarth Synopsis:  The National Labor Relations Board issued three important decisions this week that will significantly impact private colleges and universities.

Student Assistants Eligible to Unionize

By a vote of 3 to 1, the Board held that college and university student assistants — including undergraduates — who perform services in connection with their studies, are “employees” under Section 2(3) of the NLRA, and therefore have the right to bargain collectively. Columbia University, 364 NLRB No. 90. In doing so, the Board overruled Brown University, 342 NLRB 483 (2004), which held that student assistants are not statutory employees. The ruling directly contradicts the Board’s nearly 80-year treatment of students under the Act.

Because Section 2(3) does not adequately define the term “employee,” the Board looked to common law agency principles to determine whether student assistants are covered. The Board thus found that even when the economic relationship “may seem comparatively slight” relative to the academic relationship, “the payment of compensation, in conjunction with the employer’s control, suffices to establish an employment relationship[.]” The Board found no compelling statutory or policy considerations to hold otherwise.

Member Miscimarra, the Board’s lone dissenter, argued that the relationship between the students and the university is “primarily educational,” and thus does not fit “the complexities of industrial life.” The dissent warned that the Majority disregarded “what hangs in the balance when a student’s efforts to attain [a] … degree are governed by the risks and uncertainties of collective bargaining and the potential resort to economic weapons” such as strikes, slowdowns, lockouts, and litigation.

Religious Universities Covered by NLRA

The issue in Seattle University, 364 NLRB No. 84 and Saint Xavier University, 364 NLRB No. 85 was whether these religiously affiliated institutions should be exempted from the Board’s jurisdiction based on First Amendment guarantees against entanglement between church and state. The universities argued that as religious institutions, their faculty members are not covered by the National Labor Relations Act. At the very least, they argued, teachers in religious studies departments should be excluded from the proposed bargaining units, which comprised part-time and contingent faculty.

In both cases, the Regional Director determined that the university’s faculty members generally were covered by the NLRA and that the unit appropriately included religious studies faculty. On review, the Board applied its test set forth in Pacific Lutheran, 361 NLRB No. 157 (2014), which permits Board jurisdiction unless: (1) the university or college holds itself out as providing a religious educational environment; and (2) it holds out the petitioned-for faculty members as performing a specific role in creating or maintaining the school’s religious educational environment. (For more about the Board’s decision in Pacific Lutheran University, 361 NLRB 157 (2014), see here ).  The Board found that both universities met this test when it came to faculty in the religious studies departments, thereby excluding them from the bargaining units.

While this might sound like good news, the Board denied review of the Regional Director’s determination that faculty in other departments were covered. The Board thus continues to ignore the Supreme Court’s mandate in NLRB v. Catholic Bishop of Chicago, 440 U.S. 490 (1979) that the NLRA must be construed to exclude teachers in church-operated schools. The Board is not entitled to base jurisdiction on the conclusion that certain teachers perform a role in creating or maintaining the school’s religious educational environment. However, that is exactly what happened in these two cases. According to the Supreme Court, this type of inquiry by itself may impermissibly impinge on rights guaranteed by the Religion Clauses of the Constitution.

Conclusion

The Board continues to broadly exercise its authority in order to maximize the number of employers and employees covered by the Act, this time in cases involving three universities. We can expect challenges to all three decisions.

 

 

 

NLRB PAVES WAY FOR STUDENT UNIONIZATION

Posted in Bargaining Unit, Collective Bargaining, Concerted Activity, Organizing, Recognition, Representation Cases

By:  Christopher W. Kelleher, Esq.

Seyfarth Synopsis: The NLRB ruled that students who work as teaching assistants at colleges and universities are “employees” under the NLRA and are thus permitted to engage in collective bargaining.

On August 23, 2016, the National Labor Relations Board issued a 3-1 decision in Columbia University, Case 02-RC-143012, holding that private college and university student assistants — including undergraduates — who perform services in connection with their studies, are “employees” under Section 2(3) of the National Labor Relations Act, and therefore have the right to bargain collectively.

In doing so, the Board overruled Brown University, 342 NLRB 483 (2004), which held that student assistants are not statutory employees. The ruling directly contradicts the Board’s treatment of students under the Act for nearly all of its 80-year history.

Because Section 2(3) does not adequately define the term “employee,” the Board looked to common law agency principles to determine whether student assistants are covered. The Board thus found that even when the economic relationship “may seem comparatively slight” relative to the academic relationship, “the payment of compensation, in conjunction with the employer’s control, suffices to establish an employment relationship[.]” The Board found no compelling statutory or policy considerations to hold otherwise. The decision applies only to private schools and universities.

Member Miscimarra, the Board’s lone dissenter, argued that the relationship between the students and the university is “primarily educational,” and thus does not fit “the complexities of industrial life.” The dissent warned that the Majority disregarded “what hangs in the balance when a student’s efforts to attain [a] … degree are governed by the risks and uncertainties of collective bargaining and the potential resort to economic weapons” such as strikes, slowdowns, lockouts, and litigation.

And Now There Are Two: The Ninth Circuit Strikes Class Arbitration Waivers Joining The Seventh Circuit On Finding That These Waivers Violate The NLRA

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

NLRB 2By: Karla E. Sanchez, Esq.

Seyfarth Synopsis: The Ninth Circuit joined the Seventh Circuit and the NLRB in finding that mandatory arbitration agreements that require all claims to be brought by employees on an individual basis violate the NLRA.

On August 22, 2016, the Ninth Circuit issued an opinion in Morris v. Ernst & Young, LLP, Case No. 13-16599, holding that an arbitration agreement which required employees to individually bring legal claims against their employer exclusively through arbitration violated Sections 7 and 8 of the National Labor Relations Act (“NLRA”).

In the case, an employee who had signed the arbitration agreement brought a class and collective action against the employer alleging employee misclassification to deny overtime wages under the Fair Labor Standards Act (“FLSA”).   The employer moved to compel arbitration arguing that the employees had to individually arbitrate their respective claims.  The trial court agreed and ordered individual arbitrations.

The Ninth Circuit reversed finding that concerted litigation—class or collective action—is protected activity under Section 7 of the NLRA, is a substantive right under the NLRA, and cannot be waived. Notably, Section 7 of the Act protects employees’ rights to, among other things, “engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”  29 U.S.C. § 157 (emphasis added).  The Court held that concerted activity, is the “essential, substantive right” established by the NLRA. Id. slip op.at  6.   The Ninth Circuit then noted that Section 8 of the Act “enforces” the rights provided in Section 7, including engaging in concerted activities, by making it an unfair labor practice to interfere with these rights Id. slip op. at  9.  Given that Section 7 grants a right to engage in concerted activity and Section 8 precludes an employer from interfering with employees’ Section 7 rights, the Ninth Circuit concluded that an employer violates the Act by: 1) conditioning employment on signing an agreement that precludes collective and class actions, and 2) interfering with employees’ rights to engage in concerted activity.

The Ninth Circuit disagreed with the employer that the Federal Arbitration Act (“FAA”) required the enforcement of the arbitration agreement, finding that at issue here was the fact that the agreement required individual litigation and not that it required arbitration. Under the majorities’ reasoning, it would have found the same violation if the agreement required all suits to be brought in court if the suits had to be brought on an individual basis.  The Court further noted that the “FAA does not mandate the enforcement of contract terms that waive substantive federal rights.” Id. at slip op 18.

The dissent disagreed with the majority’s analysis, finding that while the NLRA “protects concerted activity, it does not give employees an unwaivable right to proceed as a group to arbitrate or litigate disputes.” Id. at slip op. 37.  The dissent found that the NLRA did not create a substantive right to litigate collective and class actions and concluded “nothing in the text, legislative history, or purposes of [Section] 7 precludes enforcement of an arbitration agreement containing a class action waiver.” Id. at slip op. 37.

Through the Court’s decision in Morris, the Ninth Circuit joins the Seventh Circuit in finding that arbitration agreements waiving collective legal action violate the Act. See Lewis v. Epic Sys. Corp., — F.3d –, 2016 WL 3029464 (7th Cir. 2016).  The Second, Fifth, and Eighth Circuits have concluded that the NLRA does not invalidate these agreements.

Given the split in the circuits, cases dealing with these type of mandatory class action waiver agreements will likely continue to be litigated until the Supreme Court rules on this issue.

Employers with these type of agreements need to consider whether they want to maintain these agreements in light of the current split and whether they are better served by making changes to their existing agreements. Employers concerned about their arbitration agreements are advised to consult with their labor and employment attorneys.

Caught at the Red Light: Challenge to Ordinance Granting On-Demand Drivers the Right to Bargain Collectively is Brought to a Screeching Halt

Posted in Bargaining Unit, Collective Bargaining, Concerted Activity, NLRB, Organizing, Recognition, Representation Cases, Uncategorized

Red Light   By: Alison Loomis, Esq.

Seyfarth Synopsis: A challenge to Seattle’s first-of-its-kind ordinance, which established the right for on-demand drivers to collectively bargain, was dismissed by a Washington federal court on the basis that the suing entity lacked standing. 

Seattle recently enacted an ordinance granting “on-demand” drivers the right to bargain collectively. The ordinance, which took effect on January 22, 2016, established a mechanism through which a union could request recognition as a qualified driver representative (“QDR”) for on-demand drivers, and ultimately, negotiate pay and conditions of employment on their behalf with their driver coordinator company (such as, for example, Uber).  If recognition was granted, the QDR would contact the company whose drivers it seeks to represent to obtain the drivers’ contact information.  Once the QDR had the contact information, it could then solicit those drivers regarding their interest in union representation.  If and when a majority of the drivers expressed interest in representation, the city of Seattle would certify the QDR as the exclusive driver representative for all drivers associated with that driver coordinator and the driver coordinator would be required to negotiate with the QDR regarding topics including payment, hours and conditions of work, and equipment standards.

On March 3, 2016, the U.S. Chamber of Commerce, a trade group that has two driver coordinator companies as members, filed a complaint against the city of Seattle, alleging, among other things, that the ordinance was preempted by the NLRA and the Sherman Antitrust Act. Chambers claimed that the ordinance would “restrict the market freedom relied upon for all for-hire drivers who are part of independent-contractor arrangements” and would “insert a third-party labor union into the relationship between independent contractors and companies.”  In seeking an injunction to stop the enforcement of the ordinance, Chambers alleged that two of its member companies suffered present harm and would likely face a “substantial risk of injury” in the future as a result of the ordinance.

The city of Seattle filed a motion to dismiss the lawsuit on the grounds that Chambers did not have the requisite standing. In granting the city’s motion, the District Court for the Western District of Washington at Seattle noted that the Chambers’ two member driver coordinator companies had not yet suffered harm, even if they faced the eventual prospect of a union organizing drive.  The court dismissed the lawsuit “without prejudice,” meaning that Chambers can effectively revive the action at a later date, assuming it gains standing.

In the interim, we’ll wait until the light turns green, and a challenge to this legislation ripens.

Get Off My Lawn (Or Gurney): Off Duty Employees Allowed To Picket on Hospital Employer’s Property

Posted in Concerted Activity, Picketing, Protected Concerted Activity, Unfair Labor Practices

 By:  Susan Jeanblanc Cohen, Esq.

Seyfarth Synopsis: In a split decision, the NLRB ruled that off-duty employees of an acute care hospital had the right to picket the hospital’s main lobby entrance.

After the collective bargaining agreement between acute care hospital Capital Medical Center (“the Hospital”) and UFCW Local 21 (“the Union”) expired on September 30, 2012 and the parties engaged in negotiations for months, the Union and some bargaining unit employees decided to engage in picketing and handbilling at the Hospital.  During this union activity, off-duty employees distributed handbills at the main lobby entrance of the hospital and the physicians’ pavilion entrance. In addition, a group of employees distributed handbills and carried picket signs along the public sidewalk next to the hospital driveway.  The Hospital did not interfere with these activities.  Later in the day, at least two off-duty employees went to the main lobby entrance of the Hospital with their picket signs, and one of the employees also distributed leaflets at the lobby entrance for a short period of time while holding her picket sign.  The Hospital informed the picketing employees that they were welcome to remain at the doorway and hand out leaflets, but that they were not allowed on Hospital property with their picket signs.  The picketers disregarded their employer’s instruction and remained at the lobby entrance with their picket signs.  The Hospital contacted the police, who said he would not force the picketers to leave because they were not being disruptive or blocking doors or ingress and egress.

In Capital Medical Center, 364 NLRB No. 69 (August 12, 2016), a split panel of the NLRB decided that the Hospital violated Section 8(a)(1) of the National Labor Relations Act (“NLRA”) by attempting to prevent the off-duty employees from picketing, threatening the employees with discipline and arrest for engaging in picketing, and contacting the police in an effort to have the picketing ended.  The majority did not rule that off-duty employees have an absolute right to picket a hospital’s lobby entrance, but cited the standard enunciated by the Supreme Court in Republic Aviation Corp. v. NLRB, 324 U.S. 793 (1945) that employee rights under Section 7 of the NLRA must be balanced against employer property rights and business interests.  Accordingly, picketing could be restricted if an employer shows that the restriction is required to maintain discipline and production.  Recognizing that acute care hospitals involve special considerations, the majority noted that hospitals may prohibit picketing in non-patient care areas if necessary to prevent patient disturbance or disruption of health care operations.  However, the majority decided that the Hospital did not show that the picketing in this case created any such disturbance or disruption or that restricting picketing was required to maintain discipline and production.  The majority felt that the presence of individuals peacefully holding picket signs near the main entrance to the Hospital was not likely to be any more disruptive or disturbing than the handbilling that the Hospital allowed.

The dissent, Member Miscimarra, felt that the majority improperly applied standards governing on-premises solicitation and distribution and applied them to on-premises picketing, noting that picketing is very different than other modes of communication and that the very presence of picketers on hospital property could disturb patients entering and exiting the facility. Member Miscimarra opined that the Hospital should have been allowed to restrict the on-premises picketing in this case.

 Employer Takeaway: Be prepared to allow off-duty employees to come onto employer property and even position themselves at entrances  while holding picket signs. Before restricting off-duty employees from such picketing, make sure there is evidence of real potential patient disturbance or disruption.  Conclusory statements that picketers could deter patients (or customers) from entering or, the acute care context, impact the healing environment will be insufficient.  In the case the a hospital, the NLRB will likely want to see evidence of the following types of behavior for a hospital to be able to lawfully restrict picketing:  patrolling the doorway, marching in formation, chanting and making noise, creating a barrier to entrances/exits, or other behavior that actually disturbed patients or disrupted hospital operations.