Protected Concerted Activity

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.

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.

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

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

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

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

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

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

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

 

By: Paul Galligan, Esq. & Samuel Sverdlov, Esq.

Seyfarth Synopsis: By filing a complaint against Postmates, Inc. challenging their arbitration waiver, the NLRB assumed that couriers for Postmates are employees, rather than independent contractors.

Earlier this month, the National Labor Relations Board (“NLRB”) filed a complaint and notice of hearing against Postmates, Inc. (“Postmates”) (12-CA-163079), an on-demand company, similar to Uber, that has a network of couriers delivering goods.  The complaint alleges that Postmates violated the National Labor Relations Act (“NLRA”) by requiring employee drivers to enter into arbitration agreements as a term of employment.  The complaint further alleges that Postmates interfered with the Section 7 rights of Customer Services Associates (“CSA”) by prohibiting them from discussing terms and conditions of employment.

Although the substance of the NLRB’s allegations – the challenged arbitration agreement – is interesting in and of itself (to read more on our extensive coverage of this issue, please see our articles here, here, here, here, and here), the critical importance of the NLRB’s complaint is far more subtle.

While the NLRB has made clear that misclassification of independent contractors could result in an unfair labor practice (“ULP”) (to read more on this issue, please see our articles here and here), in this case the NLRB simply assumed that Postmates’s couriers are employees, rather than independent contractors, without holding a hearing or allowing any briefing on the issue.  This is significant because the NLRB does not have jurisdiction to file complaints on behalf of independent contractors.

Outlook

The Postmates complaint should put employers in the on-demand economy (and generally, employers utilizing independent contractors) on notice that the NLRB will likely gloss over the employer’s characterization of independent contractor status, and file a ULP when it believes that workers are “employees” under the NLRA, and that a violation of the NLRA has occurred.

Accordingly, employers in the on-demand economy should: (1) make sure that their classification of couriers as independent contractors is consistent with the law; and (2) avoid having overly-broad or vaguely defined employment policies that could be interpreted to infringe on the Section 7 rights of potential employees. This “belt and suspenders” approach could help on-demand companies avoid lengthy and costly battles at the NLRB.

 

By: Bryan Bienias, Esq.

Seyfarth Synopsis: The Office of the General Counsel for the NLRB has asked the Board to adopt a sweeping new test that will significantly broaden the protections granted to employees who engage in frequent, short-term strikes during the same labor dispute. 

In a purported effort to update existing law to meet the realities of modern labor disputes, the Office of the General Counsel for the National Labor Relations Board last week announced that it will ask the Board to adopt a new test for determining whether intermittent and partial strikes are protected under the National Labor Relations Act. The GC distributed to all regional directors and officers a 15-page model brief to be inserted into filings before the Board and ALJs laying out its new test and also urges the Board to distinguish between “partial” and “intermittent” strikes (as the terms have be used interchangeably over the years).

Under the new test, the Act would explicitly protect employees who engage in multiple short-term strikes, particularly those addressing the same labor dispute, where: “(1) they involve a complete cessation of work, and are not so brief and frequent that they are tantamount to work slowdowns; (2) they are not designed to impose permanent conditions of work, but rather are designed to exert economic pressure; and (3) the employer is made aware of the employees’ purpose in striking.” Under current Board law, workers who strike multiple times, especially in the same labor dispute, can lose the Act’s protections and face discipline or termination.

Citing the need for certainty in the face of the increasing use of intermittent strikes by non-union workforces, as well as employers’ increasing use of temporary employees, the GC’s proposed test significantly broadens the protections granted to employees who engage in intermittent and partial strikes, while providing little guidance for employers as to how existing methods for addressing strike activity could reasonably combat the disruptions and uncertainty caused by frequent, short-term strikes.

The GC notes its test “recognizes that there is a point at which intermittent strikes are so frequent and brief that they enable employees to effectively reap the benefits of a strike without assuming the attendant risks,” citing examples of a ten-minute strike every thirty minutes, or an hourly work stoppage once employees reach daily production quotas. Beyond these extreme examples, however, the GC provides little in the way of practical limitations as to how frequently employers may strike during the same labor dispute before losing the Act’s protections.  Is a 45-minute strike every day protected?  A two-day strike every week?  As of now, it’s anybody’s guess.

The GC also claims that employers are “not helpless in the face of such strikes,” having traditional strategies of permanent replacement, lockouts, subcontracting, etc. at their disposal. But the question remains how practical or effective such traditional strategies would be in the face of frequent, short-term strikes multiple times per week or per month.

While we do not know whether the Board will ultimately adopt the GC’s proposed test, employers can expect to see these arguments raised in future NLRB proceedings. In the meantime, employers should consult with counsel regarding lawful strategies for minimizing risk and potential disruptions caused by employees’ and unions’ increasing use of intermittent or partial strikes during labor disputes.

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.

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.

 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.