Seyfarth Synopsis: The Board affirms an employer’s decision to discharge an employee for engaging in dishonesty and a security breach. In the process, it clarifies the legal standards to be used when assessing whether non-verbal employee misconduct occurring in the midst of otherwise protected concerted activity loses the protections of the Act.
The case, KHRG Employer LLC, 366 NLRB No. 22 (February 28, 2018), involved a Chicago-area hotel and a restaurant server who was leading an organizing drive at the property. The hotel terminated the server’s employment after he engaged in a security breach in the process of leading a delegation of nearly twenty individuals — only six of whom were hotel employees and only some of whom the server knew personally — into the non-public areas of the hotel to deliver a petition to the hotel’s General Manager. The GM’s office was located in a secure area of the hotel, behind a locked door, where the hotel stored cash, corporate checks, guest contracts, and personnel files.
Even before the server punched in a security code to gain access to the secure area, he lied to a security guard to gain entry to the hotel. After the security guard told the server that only he and a few others could come inside, the server falsely insisted that the entire delegation consisted of hotel employees who supposedly had the “right” to come in to see the GM.
While acknowledging that the server’s conduct in presenting the petition with other employees ordinarily would have been protected concerted activity under the National Labor Relations Act, the hotel nonetheless terminated the server’s employment because he engaged in a “serious security breach” by allowing unknown and unauthorized strangers into the secure area of the hotel.
The ALJ and Board Decisions
The ALJ dismissed the complaint, applying the decades-old Wright Line test to find that hotel’s decision was motivated by the server’s misconduct, not by the server’s protected concerted activity or by anti-union animus. The Board affirmed the ultimate outcome, but it declined to apply the Wright Line test. The Board noted that Wright Line was inapplicable because “when misconduct is a part of the res gestae of the employee’s protected concerted activity, the employer’s motive is not at issue.” At the same time, the Board also declined to apply Atlantic Steel, another decades-old case involving a four-factor balancing test normally applied to unprofessional verbal outbursts during otherwise protected concerted activity. The Board stated that the Atlantic Steel test was “ill-suited” to analyze misconduct “that does not occur during a workplace conversation with a supervisor or manager.”
Instead, the Board explained that, in situations involving non-verbal misconduct that is part of the “res gestae” of an employee’s protected concerted activity, it will “balance employees’ right to engage in concerted activity, allowing some leeway for impulsive behavior, against employers’ right to maintain order and respect.”
Applying this test, the Board found that the server’s conduct lost the Act’s protection. The Board noted that the server’s conduct was not “impulsive,” but pre-meditated, and that he lied to the security guard and used a security passcode to provide unauthorized access to the secured area.
This decision should be considered a win for any employer hoping to maintain a secure facility and not have to hand over the keys (or the passcodes) to unauthorized strangers the moment employees seek to invoke Section 7 rights.
In addition, particularly given the makeup of the Board panel that decided the case (with Democrat appointees making up a majority, even during a Republican administration), this decision also should provide employers with a fair degree of going-forward legal certainty regarding the standard the Board will apply when addressing non-verbal employee misconduct that is otherwise part of protected concerted activity. That said, it remains the case that employers may not enforce their rules against misconduct more harshly against union supporters than against others or more harshly precisely because the misconduct occurred in conjunction with otherwise protected concerted activity.