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

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

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

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

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

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

So, what does this mean for employers?

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

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

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

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

By: Michael Rybicki, Esq.

Seyfarth Summary: The relevance of the National Labor Relations Act to industries and business sectors that have not traditionally had to deal with its implications – such as hedge funds.

The New York Times recently ran on the front page of its business section a lengthy article discussing the National Labor Relation’s Board challenge to a number of provisions of an employment agreement that Bridgewater Associates, the world’s biggest hedge fund firm, requires each full-time employee to sign. Under the headline Confronting Wall Street’s Secretive Culture – N.L.R.B. Challenges Confidentiality Clauses, the article notes that the Board is challenging Bridgewater’s confidentiality, non-disparagement, and arbitration clauses and went on to state “[t]he unusual action is calling into question longstanding practices and prompting some companies to re-examine their employment agreements.”

With all deference to The Times, however, for a number of years the Board has been finding confidentiality provisions (see e.g., Target Corporation, 359 NLRB No. 103 (2013)) and non-disparagement clauses (see Dish Network Corporation, 359 NLRB No. 108 (2013)) unlawful and has steadfastly maintained, despite much criticism from the courts, that clauses restricting employees to arbitrating disputes are unlawful (D. R. Horton, Inc., 357 NLRB 184 (2012)). If anything is “unusual” – if unsurprising – it is that the Board is going after a hedge fund.

Although many employers (and some of their attorneys) think that the application of the National Labor Relations Act is limited to union-represented employees or at least limited to union or union-related activities, such as collective bargaining, union organizing, or union strikes, hand billing, picketing, or boycotts, the Act’s coverage is much broader. As the Board’s website notes:

  • The NLRA applies to most private sector employers, including manufacturers, retailers, private universities, and health care facilities.
  • Employees at union and non-union workplaces have the right to help each other by sharing information, signing petitions and seeking to improve wages and working conditions in a variety of ways.See NLRB Website: FAQ’s.

The Complaint against Bridgewater (Case Number: 01-CA-169426 (06/30/2016)) is not the first one in the financial sector. For example, as Seyfarth Attorney Ashley Laken noted, the D.C. Circuit recently upheld the Board’s finding that the confidentiality and non-disparagement provisions of Quicken Loan’s employment agreements (see our earlier blog post here) violated the Act.

Confidentiality agreements, for example, can be drafted to lawfully prohibit the disclosure of a wide variety of confidential information, see e.g., GC MEMORANDUM OM 12-31, Case 7 (pp. 17-18) (a rule by a drugstore chain prohibiting the disclosure of confidential information lawful where the rule was clearly in the context of not disclosing personal health information); see also GC MEMORANDUM OM 12-59, p. 20 [Walmart, Case 11-CA-067171] (finding lawful a rule requiring employees to maintain the confidentiality of the employer’s trade secret and confidential information where rule was sufficiently contextualized by examples of prohibited disclosures (i.e., information regarding the development of systems, processes, products, know-how and technology, internal reports, policies, procedures or other internal business-related communications) for employees to understand that it does not reach protected communications about working conditions).

It seems reasonably clear, however, that too often the implications of the NLRA for industries and sectors that have not traditionally had to deal with issues arising under the Act are not considered. Further, even where they are at least considered, frequently all that is done is to include a so-called “savings clause,” stating in effect that nothing contained in an employment agreement, handbook, or work rule, shall be construed as restricting activity protected by the National Labor Relations Act. The Board, however, routinely finds such clauses ineffective. Chipotle Services LLC d/b/a Chipotle Mexican Grill, 364 NLRB No. 72 (2016); see also ISS Facility Services, Inc., 363 NLRB No. 160 (2016).

As noted, the National Labor Relations Act applies to most private sector employers, including industries and business sectors that have not traditionally had to deal with issues arising under its provisions. However, because it provides for only compensatory damages and generally does not offer the opportunity for attorney’s fees, it has generally been ignored by the Plaintiff’s Bar. But in today’s digital age, where employees can readily become aware of the Act’s scope via social media and online content providers, the Act’s implications need to be considered by almost all private sector employers when drafting employment agreements, handbooks, and work rules –  areas into which the Board clearly is looking to expand its effective reach.

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.

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.

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.

 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.

Ee Handbook - 2

By: Howard Wexler, Esq. & Samuel Sverdlov, Esq.

Seyfarth Synopsis: An Administrative Law Judge held that an employer’s policy of prohibiting employees from conducting personal business at work, along with its social media and solicitation/distribution policies, violated the National Labor Relations Act (“NLRA”).

In Casino Pauma, the NLRB’s General Counsel (“GC”) alleged that four of the employer’s handbook policies violated Section 8(a)(1) of the NLRA.  Specifically, the NLRB took issue with the wording of the following policies: (1) Conducting Personal Business; (2) Solicitation and Distribution; (3) Social Media; and (4) Conflicts of Interest (which relates to solicitation and distribution).

With regard to the policy prohibiting employees from conducting personal business, the GC alleged that such a policy was unlawful because it “bans employees from all of [the employer’s] property except when conducting [the employer’s] business.” The GC contended that “the rule unlawfully restricts off-duty employees from engaging in protected activity; and it prohibits protected activity during nonworking time.”

The solicitation policy was alleged to be unlawful because “it prohibits protected solicitation and distribution ‘if the intended recipient expresses any discomfort or unreceptiveness whatsoever.’”

The GC alleged that the social media policy was unlawful “because it prohibits employees from (1) ‘communicating anything to do with work’ on social media without an employer-approved disclaimer; (2) posting social media references to co-workers without their prior approval; and (3) posting photos ‘in conjunction with work-related postings’ without [the employer’s] prior approval.”

Finally, the GC contended that the conflicts of interest policy unlawfully required the employer’s advance notice before employees could solicit co-workers.

An NLRB Administrative Law Judge (“ALJ”) agreed with the GC that the wording of these policies violated the NLRA.  The ALJ held that the “prohibition against conducting ‘personal business’ on company property and ‘while at work’ can reasonably be read to restrict the communications of employees with each other about union or other Section 7 protected rights in non-work areas and on nonwork time.”  In particular, the ALJ found that the language “while at work” was overly broad.  Moreover, the ALJ found that the term “personal business” was ambiguous enough to include union activity.

With respect to the solicitation, social media, and conflict of interest policies, the ALJ noted that employees are permitted to “engage in persistent union solicitation even when it annoys or disturbs the employees who are being solicited.” The ALJ also found that the employees should not be required to get the employer’s pre-approval in writing.

The ALJ also admonished the employer, by stating that the policies: “restrict the free exercise of [employee’s] Section 7 right to comment to fellow employees and others, including union representatives, about their work-related complaints concerning wages, hours and working conditions.”  With regard to the restriction on posting pictures, the ALJ held that, “[o]ne can easily imagine an employee who observes unsafe conditions in the workplace taking a photo for use by a union, to obtain the support of fellow employees in an effort to resolve the unsafe working conditions, or even to report them to the appropriate government agencies.”

Outlook

When an employee handbook has ambiguous or overbroad language, or has language that could conceivably be interpreted to restrict employees from engaging in broadly defined protected activities, the NLRB will not hesitate to allege a violation of the NLRA. The wording of each policy in an employee handbook must be carefully crafted so as to not restrict employees from communicating about union activity, or wages, hours and other working conditions during employees non-working time.  As such, it is imperative that employers have their handbooks constantly updated, and reviewed by attorneys familiar with the NLRA.

Ee Handbook

By: Candice Zee, Esq. & Monica Rodriguez, Esq.

Seyfarth Synopsis: The NLRB orders employer to cease and desist from maintaining numerous provisions in its Social Networking Guideline and provisions in the Handbook related to social media, privacy, and confidentiality, and no solicitation on the grounds that language violated Section 8(a)(1) of the Act.

On July 15, 2016, the National Labor Relations Board (the “Board”) in Cy-Fair Volunteer Fire Department and Robert Berleth, et al., 364 NLRB No. 49 (July 15, 2016) affirmed an Administrative Law Judge’s decision that various provisions in Cy-Fair Volunteer Fire Department’s (“Cy-Fair”) Handbook and Social Networking Guideline violated Section 8(a)(1) of the Act because the language could lead an employee to reasonably believe that he/she was prohibited from organizing or engaging in concerted activity.

In determining whether a challenged rule is unlawful, the Board considered the following evidence: (1) whether employees would reasonably construe the language to prohibit Section 7 activity; (2) whether the rule was promulgated in response to union activity; or (3) whether the rule was applied to restrict the exercise of Section 7 rights.

Cy-Fair’s Social Networking Guideline Violated The Act

Cy-Fair’s Social Networking Guideline’s prohibited the use of its logos, names, pictures or accounts of activities without prior approval. In finding that Cy-Fair’s Social Networking Guideline violated the Act, the Board reasoned that employees could reasonably believe that they, or a union, were not permitted to seek support from other employees, or publicize a dispute with Cy-Fair by using its name or logo on their clothing or literature.

Provisions of Cy-Fair’s Handbook Also Violated The Act

The following provisions of Cy-Fair’s Handbook were also at issue: (1) overview; (2) essential behavioral expectations; (3) department systems; (4) blog; (5) social media; (6) proprietary information/confidentiality; (7) no solicitation/distribution policy; and (8) employee records and privacy. The Board held that some language in each of these provisions violated the Act.

Cy-Fair’s overview, essential behavioral expectations, blogging, proprietary information/confidentiality, and employee records and privacy sections attempted to protect Cy-Fair’s confidential/proprietary information and its employees’ personal information. It provided that employees would be disciplined if they shared this information without the express consent of the appropriate person/entity.  The Board, however, found that these sections were unlawful because such provisions limited the scope of the information that employees could share or discuss (i.e. confidential/proprietary information and other employees’ personal information), they impeded the employees’ right to discuss terms and conditions of employment.

The Board determined that one of the three sentences in the non-solicitation/distribution policy also violated the Act. The first and second sentences of the policy prohibited solicitation/distribution of literature during work time and required that the topics discussed by off-duty employees engaging in solicitation/distribution not disturb working employees.  The Board found that these sentences were lawful because the complete prohibition of solicitation/distribution was limited to “work time” and  the limitation to the topics discussed was rational.  The Board determined that the Union failed to satisfy its burden that there were no other means of communicating with employees.  Thus, Cy-Fair’s restriction that non-employees obtain HR approval prior to soliciting or distributing literature was lawful.

The Board, however, found that third sentence prohibiting solicitation and distribution of literature in areas frequently visited by customers, or solicitations that otherwise interfered with operations, violated the Act. The Board reasoned that because the nature of Cy-Fair’s business made it unclear who its “customers” were and how it would affect its operations, employees could reasonably believe that they were prohibited from exercising their section 7 rights.

Lessons Learned

It is important to note that all of the policies that were found unlawful were in place prior to any union activity at Cy-Fair. In its analysis, the Board instead focused on whether employees would reasonably construe the above language to prohibit their Section 7 rights.  Ultimately, the Board ordered that Cy-Fair cease and desist from maintaining the above mentioned provisions in its Handbook and the unlawful language in the Social Networking Guideline.

This case serves as a reminder that employers should be careful when drafting their policies and be mindful of any restrictions. It is particularly important for employers to review language in its policies that could be construed as being overbroad as it may result in less protection for the employer in the future.  If you have any questions regarding your workplace’s handbook and social media policies or practices, please contact the authors, or another Seyfarth attorney.

By: Howard M. Wexler, Samuel Sverdlov & Kyllan B. Kershaw

Seyfarth Synopsis: Board panel found that long-term care facility acted for an “independent unlawful purpose” when it permanently replaced striking workers allegedly in order to teach the union and strikers a lesson and to avoid future strikes.

Ever since the Board’s decision in Hot Shoppes, Inc., 146 NLRB 802 (1964), employers have been permitted to hire permanent replacement workers for economic strikers almost at will, unless the union can put forth evidence that the employer was motivated by an “independent unlawful purpose.”  An “independent unlawful purpose” was understood to exist when an employer’s hiring of replacement workers was “unrelated or extraneous to the strike itself.”  Last week, the Board’s decision in American Baptist Homes d/b/a Piedmont Gardens, 364 NLRB No. 13 (2016) extended the Hot Shoppes’ “independent unlawful purpose” standard to apply to situations where the alleged unlawful purpose was allegedly related to a desire to avoid future strikes.

Background

In the midst of collective bargaining negotiations, the union sent the employer two letters; the first letter notified the employer that the union would be commencing a strike on the following Monday, while the second letter indicated that the striking employees “unconditionally offer to return to work” the following Saturday.  In order to avoid any disruption in business, the employer engaged a staffing agency at a cost of $300,000 to hire temporary workers.  However, rather than waiting for the striking workers to return to work, the employer began offering permanent employment offers to the temporary workers.  According to the employer, the primary motivation for permanently replacing striking workers was that “replacements would come to work if there was another work stoppage.” On the other hand,  the employer’s attorney allegedly told the union’s attorney that the employer “wanted to teach the strikers and the Union a lesson.  [The employer] wanted to avoid any future strikes and this was the lesson they were going to be taught.”

The General Counsel alleged that the employer committed an 8(a)(3) and (1) violation by failing to reinstate striking employees, and that the employer was motivated to permanently replace striking workers by an “independent unlawful purpose.”  An ALJ initially held that the replacements were permissible, however, the General Counsel appealed that decision to the Board.

Decision

According to the Board, an employer is motivated by an “independent unlawful purpose” when they intend “to discriminate or to encourage or discourage union membership.”  As such, “it is axiomatic that an employer violates the Act when it retaliates against employees for engaging in union or other protected activity, and that the right to strike is fundamental.”  Thus, contrary to the ALJ’s interpretation, “the phrase ‘independent unlawful purpose’ does not require that the unlawful purpose be unrelated or extrinsic to the parties’ bargaining relationship.”

According to the Board, when the employer’s attorney told the union’s attorney that he wanted to “teach the strikers and the Union a lesson,” he revealed the employer’s intent to punish union employees in retaliation for participating in protected activity.  As a result, the Board ordered the employer to offer full reinstatement to striking workers and pay compensatory damages.

Dissenting, Member Miscimarra attacked the majority’s decision as rendering prior Board law on this issue a nullity and disrupting the balance of power between employers and unions with respect to the use of economic weapons.  Member Miscimarra noted that under the majority’s decision, if an employer hires permanent replacements, any stray comment made by an executive, manager, attorney, persuader, or supervisor indicating anti-strike animus could render unlawful the employer’s actions, resulting in potentially devastating back-pay liability.

Outlook for Employers

Following this decision, employers considering whether to replace workers permanently during an economic strike must proceed with caution to avoid the appearance of anti-union animus. As Member Miscimarra predicts in his dissent, this decision will likely result in many employers choosing to rely solely on temporary replacements during a work stoppage and significantly limit the effectiveness of permanent replacements as a legitimate economic weapon.  Employers should expect unions emboldened by this decision to adopt more aggressive positions at the bargaining table and be more willing to call a strike.

By: Kyllan B. Kershaw, Esq.

Ee HandbookSeyfarth Synopsis: Board panel finds hospital’s work rule prohibiting employees from engaging in offensive conduct to be unlawful.

In Valley Health System, LLC d/b/a Spring Valley Hosp. Med. Ctr., 363 NLRB No. 178 (May 5, 2016), a unanimous Board panel (Pearce, Hirozawa, McFerran) found that a hospital acted unlawfully by maintaining certain work rules, including a rule prohibiting employees from engaging in conduct that “brings discredit on the System or Facility” or that is “offensive…to fellow employees,” and a rule prohibiting employees from speaking negatively about a coworker or the hospital.  In reversing the Administrative Law Judge’s finding that prohibiting “offensive” conduct was not unlawful, the Board panel noted that protected Section 7 activity often involves “controversy, blunt criticisms, and disagreements that may well be deemed ‘offensive’ by management or fellow employees.”  The Board panel further stated that the rule was not accompanied by any descriptive language or a list of other forms of misconduct that would help employees understand what type of conduct the rule intended to prohibit.

The underlying unfair labor practice charges related to the hospital’s maintenance of a policy requiring arbitration of employee disputes and a rule requiring employees to speak and communicate only in English with other employees, staff, customers, and visitors in all work and patient-access areas. While not part of the Board panel’s discussion, the Administrative Law Judge’s order affirmed by the Board strikes down the hospital’s English-only rule. In the underlying decision, the Administrative Law Judge found that the work rule violated the Act because it would lead non-native English speaking employees to reasonably believe that they could not engage in concerted activity.  The Administrative Law Judge reached this conclusion even though the hospital’s “English Only” work rule complied with EEOC guidance.  The Administrative Law Judge’s decision indicates that an employer may be faced with a situation where maintaining an English-only rule that is lawful under EEOC guidance may nonetheless violate the National Labor Relations Act.

While Member Miscimarra was not involved in this case, it comes only weeks after his scathing dissent attacking the Board’s standard for evaluating workplace rules in a decision involving a Michigan hospital. Following the Board’s recent string of cases on employer work rules, employers should consider reviewing their current policies and work rules to ensure that they are narrowly tailored to prevent potential unfair labor practice charges and costly litigation.