unfair labor practices

By:  Kyllan Kershaw & Kaitlyn Whiteside 

Seyfarth Synopsis: In Colorado Symphony Association, 366 NLRB No. 60 (April 13, 2018), the NLRB found that an employer had an obligation to disclose information related to individual overscale contracts because the request related to the union’s investigation of potential sex discrimination, a mandatory subject of bargaining.

In a unanimous decision issued on April 13, 2018, the NLRB upheld an Administrative Law Judge’s (“ALJ”) decision ordering the production and disclosure to the Union of individual overscale contracts entered into between the Colorado Symphony Association and certain of its musicians.

The catalyst for the request came from the Principal Flutist in the Symphony who believed that she was being paid less than her male counterparts.  The Flutist raised this concern to the Union during her individual contract negotiations with the Symphony, which did not involve the Union. She also alerted the Union to the fact that she was considering filing a charge with the Equal Employment Opportunity Commission (“EEOC”) regarding her alleged sex discrimination.  Although the Union advised the Flutist that they could not assist with her EEOC filing, they subsequently requested copies of the individual overscale contracts from the Symphony.  A mere two days later, and without the requested information, the Flutist filed her EEOC charge.

According to the ALJ and the NLRB, the Symphony was required to provide copies of the individual overscale agreements to the Union despite the fact that: (i) the CBA expressly authorized the Symphony to negotiate and enter into these agreements; (ii) the Union did not participate in the individual overscale agreement negotiations; (iii) the Union never filed or assisted with a grievance related to the overscale agreements, nor had it raised any issue regarding these agreements during negotiations for a new CBA; and (iv) the CBA did not prohibit the Symphony from engaging in race or sex discrimination or contain a clause obligating the Symphony to comply with all applicable federal and state law, meaning that there was no way for the Flutist to file a grievance under the agreement for her alleged discrimination.

Regardless, the ALJ found that “investigating possible employer race or sex discrimination is a legitimate purpose related to a union’s collective-bargaining duties and responsibilities,” even without the presence of a non-discrimination clause in the contract.  The ALJ speculated that because the parties were in negotiations, the Union could have used the individual overscale agreement information to propose the inclusion of such language in a future agreement.  Even if that was not the goal, however, the ALJ asserted that the Union was investigating potential sex discrimination, which is a well-established mandatory subject of bargaining.   The ALJ further noted that the Union “may therefore be entitled to information that is relevant and necessary to determining whether a particular employment action is discriminatory, even if the employment action itself is not a mandatory subject [of bargaining].”

The ALJ likewise dismissed the Symphony’s claim that the Union’s request constituted an improper fishing expedition for information to support the Flutist’s EEOC charge, noting that the Flutist had not filed the EEOC charge at the time of the initial request, the information sought was presumptively relevant, and that regardless of the EEOC charge filing, a union may conduct its own investigation of possible employer discrimination as part of its legitimate collective-bargaining duties and responsibilities, even where the CBA lacks any non-discrimination provision.

Employers should note that this case can be seen as emblematic of the increased expectations of a union’s responsibilities in the “Me Too” era.  It also appears that the NLRB is willing to accept these additional expectations as a legitimate responsibility of a union as the employee’s collective bargaining representative.  What remains to be seen is how far a union will go to protect its female members from sex discrimination and how much information the NLRB will require an employer to provide on non-mandatory subjects of bargaining where a union claims its request relates to investigating possible discrimination.

By:  Tiffany T. Tran, Esq. and Timothy M. Hoppe, Esq

Seyfarth Synopsis: On Friday, December 1, 2017, newly appointed NLRB General Counsel Peter Robb issued a memorandum containing a broad overview of his initial agenda as General Counsel. It previews many anticipated developments during the Trump Administration. Our blog is exploring a different aspect of the memo each day during the first three weeks of December. Click here, here, here, here, here, here, here, here, here, here, & here to find prior posts.

In GC Memo 18-02, in what may bring some holiday cheer to employers around the country, the newly appointed General Counsel walked back the prior administration’s efforts to transform independent contractor misclassification into a stand-alone Section 8(a)(1) violation.

In an advice memorandum released in 2016, the former General Counsel signaled that he intended to do just that.  Pac. 9 Transp., Inc. , NLRB Div. of Advice, No. 21-CA-150875, 12/18/15 [released 8/26/16] involved a contentious unionization fight between the Teamsters and a trucking company that transferred cargo to and from the ports of Los Angeles and Long Beach.  The union initially filed an 8(a)(1) charge against the company alleging it interfered with drivers’ Section 7 rights by threatening and intimidating union supporters.  The company settled the initial charge, but then issued a notice reminding its drivers (1) that they were independent contractors, not employees; and (2) that independent contractors cannot form unions.

The former administration could have easily just looked at the notice and considered whether it was designed to chill Section 7 rights.  Pac. 9, however, went further, characterizing the company’s classification of the drivers (not just the notice), as a preemptive strike designed to prevent employees from exercising their rights.  Accordingly, “[a]lthough the Board has never held that an employer’s misclassification of statutory employees as independent contractors in itself violates Section 8(a)(1),” the memo interpreted Board decisions as supporting such a finding.

GC Memo 18-02 seems to restore some sanity to the General Counsel’s approach to independent contractor issues.  It could put to rest any notion that merely classifying workers as independent contractors violates the Act.  Instead, the General Counsel signals a return to an evidence based standard.  If a region has “evidence that the employer actively used the misclassification of employees to interfere with Section 7 activity,” then the Region should submit the case to Advice.

Even under GC Memo 18-02, employers must still carefully analyze their relationship with independent contractors.  Particularly when faced with unionization efforts, the Board will still use a number of unruly agency factors to determine if contractors are, in fact, employees and capable of organizing.  But employers can rest a bit easier that they will not be flooded by ULP charges from unhappy contractors merely because of their classification.

By:  Ashley Laken

Seyfarth Synopsis: The U.S. Court of Appeals for the D.C. Circuit recently denied Quicken Loans, Inc.’s petition for review of an NLRB decision finding that confidentiality and non-disparagement provisions in the company’s Mortgage Banker Employment Agreement unreasonably burdened employees’ rights under Section 7 of the NLRA.

Back in 2013, an NLRB administrative law judge found that certain confidentiality and non-disparagement provisions contained in Quicken’s Mortgage Banker Employment Agreement violated the NLRA (see our earlier blog post here).  The Board agreed with the ALJ, and the Company petitioned the D.C. Circuit for review.  Recently a three-judge panel of the D.C. Circuit denied the Company’s petition for review and granted the NLRB’s cross-application for enforcement, finding that there was nothing arbitrary or capricious about the Board’s decision and there was no abuse of discretion in the Board’s hearing process (Case No. 14-1231).

Facts

As a condition of employment, mortgage bankers were required to sign a Mortgage Banker Employment Agreement that included a confidentiality provision and a non-disparagement provision.  The confidentiality provision prohibited employees from disclosing nonpublic information regarding the company’s personnel, including personnel lists, handbooks, personnel files, and personnel information of coworkers such as phone numbers, addresses, and email addresses.  The non-disparagement provision prohibited employees from publicly criticizing, ridiculing, disparaging or defaming the company or its products, services, policies, directors, officers, shareholders or employees.

Court’s Reasoning

The D.C. Circuit noted that its review of the Board’s decision was limited, as Congress has entrusted the Board with implementing Sections 7 and 8(a)(1) of the Act and determining when an employer’s workplace rules run afoul of those provisions.  The three-judge panel noted that the Board’s determinations are therefore entitled to considerable deference and will be sustained as long as the Board “faithfully applies” the legal standards and its textual analysis of a challenged rule is “reasonably defensible” and adequately explained.

In finding that the Board properly determined that the confidentiality provision violated employees’ Section 7 rights, the court noted that the very information the provision forbids employees from sharing (i.e., personnel lists and employee rosters) has long been recognized as information that employees must be permitted to gather and share among themselves and with union organizers.  With respect to the non-disparagement provision, the court found that the Board “quite reasonably found that such a sweeping gag order would significantly impede mortgage bankers’ exercise of their Section 7 rights because it directly forbids them to express negative opinions about the company, its policies, and its leadership in almost any public forum.”

In reaching its conclusions, the appeals court noted that the validity of a workplace rule turns not on subjective employee understandings or actual enforcement patterns, but on an objective inquiry into how a reasonable employee would understand the rule’s disputed language.  The court observed that this approach serves “an important prophylactic function: it allows the Board to block rules that might chill the exercise of employees’ rights by cowing the employees into inaction,” rather than forcing the Board to wait until that chill is manifest and then try to undertake the difficult task of dispelling it.  The court also noted that the absence of enforcement “could just as readily show that employees had buckled under the Employment Agreement’s threat of enforcement.”

Employer Takeaway

In recent years, the Board has issued numerous decisions in which workplace rules were found to unlawfully restrict employees’ Section 7 rights, and the D.C. Circuit’s decision demonstrates that employer petitions for review of such decisions may not be successful.  The decision also highlights the need to not just draft and review employee handbooks and policies for possible non-compliance with the NLRA, but employment agreements as well.

By: Bradford L. Livingston

Depending on your point of view, it’s the same old (and new) song. Whether the famous 19th Century line by French writer Jean-Baptiste Alphonse Karr, the lyrics from the 2010 Bon Jovi song, or decisions of the current National Labor Relations Board (“NLRB” or “Board”), it’s apparently true that the more things change, the more they stay the same.  Thus and yet again, the NLRB has determined that employers normally will be obligated to continue deducting union dues even after a collective bargaining agreement expires.  Today in Lincoln Lutheran of Racine, 362 NLRB No. 188 the NLRB reaffirmed that it is overturning a 50 year-old precedent allowing employers to discontinue union dues deductions after a collective bargaining agreement expires.

Employers normally must maintain the “status quo” or most existing terms and conditions of employment following the expiration of a collective bargaining agreement.  Unless there is a lawful impasse in negotiations, an employer may not change wages, job assignments, vacation scheduling procedures, overtime assignment rules, health and welfare contributions, or many other terms or conditions of employment during the hiatus between a contract’s expiration and the beginning of a new labor agreement.

Several key exceptions to this rule exist, however.  In Bethlehem Steel, 136 NLRB 1500 (1962), the NLRB ruled that an employer’s dues-checkoff obligations were tied to a contractual union security clause which, like a management rights or no strike clause, expires with the labor agreement.  And so for 50 years, the Board held that when a labor agreement expires, both the union security clause and any obligation to deduct and remit employees’ union dues terminates.

That tune changed in 2012. In WKYC-TV, Inc., 359 NLRB No. 30 (Dec. 12, 2012),  the Board announced that employers could no longer unilaterally stop deducting union dues after a collective bargaining agreement expires. [See our prior blog post .]  While labor agreements may be drafted to provide for the expiration of dues deductions, such a clause must be, in the NLRB’s view, “clear and unmistakable.”  Thus, after contract expiration, an employer could lawfully stop making dues deductions only if it was confident (and correct) that its dues-checkoff clause terminated with the labor agreement.  Absent that certainty, if a union engaged in a strike, employers were required to continue deducting dues from crossovers – bargaining unit employees who choose not to or abandon a strike – without necessarily knowing whether they resigned their union membership and dues-checkoff authorizations.

In its 2014 NLRB v. Noel Canning decision [as discussed here], however, the U.S. Supreme Court found that many NLRB decisions, including WKYC-TV, were decided by a Board that was not validly appointed.  So did the law revert then to Bethlehem Steel and the ability to cut off dues deductions after contract expiration? Not so fast, my friend, because, of course, the more things change the more they stay the same. Faced with yet another opportunity to consider the issue, today the NLRB today affirmed its ruling in WKYC-TV and found that, absent a clear and unmistakable waiver, employers need to continue giving unions their dues.   And as the dissent by Members Miscimarra and Johnson points out, the Board Majority’s rule will only impede labor negotiations by encouraging employers to reject dues checkoff clauses in bargaining first contracts, proposing to delete them in contract renewal negotiations, and – since the pressure from discontinuing dues deductions after contract expiration cannot occur – raising the stakes in negotiations by potentially locking out employees to exert economic leverage. Instead of Bon Jovi, the tune we’re hearing may be the labor anthem “Solidarity Forever.”

By:  Ronald J. Kramer, Esq.

Last year the NLRB demonstrated an increased willingness to award negotiation costs as a remedy for bad faith bargaining in cases that are far less egregious than those where the remedy historically was given. Hospital of Barstow, Inc., 361 NLRB No. 34 (2014); Fallbrook Hospital, 360 NLRB No. 73 (2014). On May 8, 2015, the D.C. Circuit Court of Appeals upheld the award of negotiating expenses in Fallbrook Hospital, finding under a clear abuse of discretion standard that the Board’s decision was “amply supported by substantial evidence in the record and has a rational basis in the law.” Fallbrook Hospital Corp. v. NLRB, Case No. 14-1056 (D.C. Cir. May 8, 2015).

The Board has held that “[i]n cases of unusually aggravated misconduct . . . where it may fairly be said that a respondent’s substantial unfair labor practices have infected the core of a bargaining process to such an extent” that traditional remedies will not eliminate their effects, an award of negotiation expenses is warranted to “make the charging party whole for the resources that were wasted because of the unlawful conduct, and to restore the economic strength that is necessary to ensure a return to the status quo ante at the bargaining table.” Frontier Hotel & Casino, 318 NLRB 857, 859 (1995) (emphasis added), enf’d in rel. part sub nom., Unbelievable, Inc. v. NLRB, 118 F.3d 795 (D.C. Cir. 1997). For example, in Pacific Beach Hotel, 356 NLRB No. 182 (2011), negotiation expenses were awarded in light of: bad faith bargaining (including but not limited to insisting on recognition, management rights and grievance proposals that gave the union no role in representing employees), discriminatory discharges, unilateral changes to working conditions, overbroad rules, illegal polling, an improper withdrawal of recognition, and failures to provide information.

Fallbrook Hospital was not Pacific Beach Hotel. In Fallbrook Hospital, the employer engaged in bad faith bargaining by: (i) refusing for the first 8 bargaining sessions to submit proposals or counterproposals until the union submitted an entire contract proposal; (ii) leaving 2 of 11 bargaining sessions early (one without explanation, the other because it considered a promoted union bargaining team member to be a member of management and thus ineligible to participate); (iii) declaring impasse, refusing to bargain, and leaving another session after 15 minutes given the union continued to have employees use union-provided and implemented assignment-despite-objection (ADO) forms to document unsafe situations; (iv) refusing to respond to union requests for bargaining dates after declaring impasse; (v) refusing to bargain over employees who were terminated; and (vi) refusing to respond to 1 of 12 information requests regarding one of the discharges (a request for 3 years of nurse disciplinary history, thus seeking what was arguably non-bargaining unit data).

Although the Administrative Law Judge hearing the case considered it a close call, she declined to award negotiation costs because the conduct was not as egregious as that warranting costs in prior cases. The Board, over Member Johnson’s disagreement, reversed, finding in 5 short paragraphs that the conduct had so infected the core of the bargaining process such that its effects could not be eliminated solely by the application of an affirmative bargaining order.

In enforcing the decision, the D.C. Circuit stated that it has no business second-guessing the Board’s judgment regarding remedies, and that its choice of remedies was entitled to a high degree of deference. The Court noted that there must be so gross an abuse of power as to be arbitrary before it would reverse a Board-ordered remedy. Here, the Court found no such abuse.

The Court nevertheless took 19 pages to explain how it was that the award was supported by the record and had a rational basis in law. The Court focused specifically on the characterizations made by the ALJ and the Board as to the employer’s actions, such that it was clear the employer had no intent to bargain, that it acted in an “obstinate and pugnacious manner,” that it put up “a series of roadblocks” to delay the bargaining, and that its attempts to challenge the Board’s certification (presumably by raising as an affirmative defense the propriety of the certification) made it clear it did not welcome the union. The Court made a point of noting that the “entire record” of the employer’s unfair labor practices was “quite extensive,” and that given this “litany of misconduct” showed the employer’s “deliberate attempts” to prevent any actual bargaining, the award of negotiation costs was supported by substantial evidence in the record.

Critically, the Court rejected claims that the decision was contrary to the law in that the employer’s conduct was not as egregious as that in prior decisions. The Court found that the Board did not set a particular bar for the award of negotiation expenses in prior decisions, but that its approach in each case is to weigh the facts to determine whether the remedy is appropriate to make the charging party whole for the resources wasted because of the unlawful conduct and to restore the economic strength necessary to return to the status quo ante at the bargaining table. In short, the Court noted that there are no per se rules regarding when reimbursement of negotiation expenses will be ordered.

The Court’s enforcement and, indeed, justification of the Board’s award gives the NLRB pretty much carte blanche to award costs in cases far less egregious than in the past. Employers need to take greater care to avoid missteps at the bargaining table or else face a potentially expensive remedial surprise.

How low will the Board lower the bar? Is there a point at which the courts will cry foul? Will unions be subject to the same loosened standards for their bad faith actions? Stay tuned.

By: Howard M. Wexler, Esq.

Hoping that the third time is the charm, the National Labor Relations Board (“Board” or “NLRB”) has once again adopted its expedited election rules (aka “Ambush Election Rules”). We previously discussed the current version of the Ambush Election Rules here. The Ambush Election Rules have been proposed twice before by the Board and approved in part once, only to be ruled invalid by the United States District Court for the District of Columbia on procedural grounds).

The new Ambush Election Rules, which are scheduled to go into effect on April 14, 2015, would significantly change existing representation case procedures, including: shorter times for pre-election hearings and elections to be held ; additional Excelsior List requirements (e.g. providing employees’ email addresses and available telephone numbers (home and cell)); and no right to NLRB review of post-election disputes.

Several business groups have already filed lawsuits – one in Texas and the other in Washington D.C. – to stop the implementation of the Ambush Election Rules.   In addition, 52 members of Congress sponsored a joint resolution on February 9, 2015  that would stop the implementation of the rule through the Congressional Review Act (“CRA”). Under the CRA, Congress can vote on a joint resolution of disapproval to halt a federal agency from implementing a rule or regulation without the express authorization of Congress

On March 4, 2015 the Senate passed the joint resolution by a vote of 53-45, which is the first step in the process of stopping the implementation of the Ambush Election Rules under the CRA.  (Copy here).  In support of the Senate’s passage of this joint resolution, Chairman of the Health Education Labor & Pensions Committee Lamar Alexander stating that, “The NLRB’s rule to shorten union elections to as little as 11 days allows a union to force an election before an employer has a chance to figure out what is going on… Senate passage of this joint resolution is an important first step in stopping the NLRB’s harmful rule and preserving every employer’s right to free speech and every employee’s right to privacy.”

It remains to be seen whether the pending lawsuits or legislation seeking to halt the Ambush Election Rules will succeed. However, given the implementation date is a little over one month away, we expect there to be a flurry of activity over the next few weeks. We will be sure to keep our readers informed as the battle over the Ambush Election Rules continues. Stay tuned!

By: Ronald J. Kramer, Esq.

On December 19, 2014, the NLRB General Counsel’s Office issued thirteen consolidated complaints against the purported unfair labor practices of numerous McDonald’s franchisees nationwide, with franchisor McDonald’s USA LLC being named as a co-defendant on a joint employer theory.  According to the NLRB’s press release, click here, the defendants allegedly violated the rights of employees by, among other things, making statements and taking actions against them for engaging in activities aimed at improving their wages and working conditions, including participating in nationwide fast food worker protests about their terms and conditions of employment during the past two years.

This action unfortunately comes as no surprise:  General Counsel Richard F. Griffin, Jr. announced back in July that he had authorized the issuance of complaints against McDonald’s USA LLC as a joint employer.  Moreover, in the highly anticipated Browning-Ferris joint employer litigation, the General Counsel argued for the adoption of a broad interpretation of employment status.  There the General Counsel argued for a test that would include looking at the way in which the parties have structured their commercial relationship, and whether the putative joint employer wields sufficient influence over the working conditions of the other entity’s employees such that meaningful bargaining could not occur in its absence.  As the General Counsel asserted, his interpretation “would make no distinction between direct, indirect, and potential control over working conditions and would find joint employer status where ‘industrial realities’ make an entity essential for meaningful bargaining.”

The General Counsel’s position — and given the timing of the complaint right before the issuance of Browning-Ferris, likely a majority of the Obama Board’s position — would reverse over thirty years of precedent applying a common law agency test to determine employment status.  Under that test, joint employer status turns on the “direct and immediate” control over the particular employees at issue:  The extent to which the purported employer determines matters governing essential terms and conditions of employment, including the right to hire and fire, set work hours, determine start and end times of shifts, directions, compensation, day to day supervision, record keeping, and to approve the contractor’s employees assigned and devise rules under which those employees were to operate.  There is no possible way these complaints would have issued under the existing joint employer test.

Franchisor-franchisee relationships are ubiquitous throughout all sorts of businesses, from fast food and other restaurants, to hotels, convenience stores, gas stations, car dealers, movie theatres, hardware stores, professional sports teams, and even private schools.  As our colleague, former NLRB Member Marshall Babson, stated to Bloomberg’s Daily Labor Report: “Upending traditional franchise arrangements and finding employment relationships where none exist is a threat to commerce and contrary to the purposes of the NLRA.”  Should the Board find a joint employment relationship exists between franchisors and franchisees, this issue will be litigated through the courts for years to come.

By:  Kenneth R. Dolin, Esq.

The U.S. Supreme Court last month decided the Noel Canning case, unanimously holding that President Obama’s proposed recess appointments of Terrence Flynn, Sharon Block and Richard Griffin to be members of the National Labor Relations Board (Board) were unconstitutional. The Court reasoned that the brief Senate break in January 2012, during which time the appointments were made, was of insufficient length to be a “recess.” Thus, the Court found the Board order against the soda pop bottling company, Noel Canning, was invalid because the Board lacked a quorum, as three of its five members were improperly appointed.

Noel Canning will have a significant impact on the board. Hundreds of board decisions between January 2012 (when the appointments were made) and August 2013 (when new appointees were confirmed by the Senate) will likely be invalidated and reconsidered by the current Board, which now has a full contingent of five Senate-confirmed members.

Chairman Mark Gaston Pearce issued a brief statement shortly after the Noel Canning decision issued, acknowledging the possibility that the Board cases in which the January 2012 recess appointees participated may have to be revisited. Further, NLRB general counsel Richard Griffin recently stated that the Board has already taken action in about 100 cases pending in federal appellate courts, settling decisions in almost 50 cases and asking federal courts to remand dozens of other cases to the Board.

Among the decisions directly impacted by Noel Canning that the Board will likely revisit are those involving such contested issues as: (1) an employer’s ability to promulgate rules regulating employee behavior at the workplace and on social media; (2) to limit access to its premises by off-duty employees; (3) to discontinue deductions of union dues after expiration of its collective bargaining agreement; (4) to obtain a mandatory arbitration agreement with a class action waiver; (5) to not continue granting wage increases after the expiration of a collective-bargaining agreement; (6) to impose discipline on employees during first contract negotiations; (7) to refuse to provide witness statements to a union during the employer’s internal investigation of employee misconduct; and (8) to instruct employees to maintain confidentiality during internal workplace investigations.

It is unlikely, however, that the results will differ materially even if the current Board revisits all the decisions issued by the former Board comprised of the invalidly appointed recess appointees because the current Board, like the prior Board, remains comprised of a majority of Democratic appointees.

That said, there is no guarantee that all decisions will be decided identically, and at the very least, revisiting these cases will certainly hamper the current board’s ability to decide pending cases.

In addition to the case decisions that will likely be invalidated, any administrative action in which the recess appointees participated may also be invalidated, including the appointments of regional directors and administrative law judges as well as perhaps even the delegation of Board authority to the general counsel regarding temporary injunction proceedings. It can be argued that all official actions by the Board during the prior period when it lacked a three-member quorum were invalid.

Thus, it is possible that decisions issued by improperly appointed Regional Directors and administrative law judges may be found invalid as well.

All told, the effect of Noel Canning is likely to be significant, invalidating numerous board decisions and hampering the Board’s ability to decide new cases, though this delay will likely not prevent the Board from issuing its new representation election rule, which would significantly shorten the union election period, before year end.

Likewise, it is unlikely that Noel Canning will impact the General Counsel’s emphasis on using temporary injunctive relief for first-contract bargaining cases, unlawful discharges in organizing campaigns and successor cases involving the successor’s refusal-to-hire union-represented employees.

It remains to be seen whether the effect of Noel Canning will prevent the current board from issuing decisions in ongoing cases before year end concerning such currently contested issues as (1) whether college football players are employees; (2) an employer’s right to prevent its employees from using its e-mail system for union and other protected, concerted purposes; (3) an employer’s right to refuse to provide financial information to a union when it does not claim an “inability to pay;” (4) whether the post-arbitral deferral standard should be more limited; (5) whether the joint employer standard should be broadened; (6) whether a “perfectly clear” successor should have a broader obligation to bargain with the union before setting initial terms of employment than it does presently; (7) the legality of any aspect of a “neutrality” or card check agreements or other pre-recognition agreements: and (8) the rights of contractor employees, who work on other employer’s property, to have access to the premises to communicate with workers or the public.

Portions of this article were excerpted from Mr. Dolin’s article, which was published in the July 21, 2014 edition of The National Law Journal, reprinted with permission. 

 ©2014 ALM Properties, Inc. All rights reserved.  Further duplication without permission is prohibited.

By: Howard M. Wexler, Esq.  &  Joshua D. Seidman, Esq.

As we previously blogged about – most recently here  and here, the NLRB has taken aim at employer workplace rules that it contends are unlawfully restricting employees’ Section 7 rights.

On June 13, 2014 the NLRB affirmed an ALJ decision issued in Laurus Technical Institute, 360 NLRB No. 133 (Laurus), a case we previously blogged about here, where an employer’s “No Gossip Policy” was found unlawful.

The Board’s Decision

In Laurus Technical Institute, a technical school implemented a “No Gossip Policy” (“Policy”) in February 2012. In relevant part, the Policy stated that “[e]mployees that participate in or instigate gossip about the company, an employee, or customer will receive disciplinary action…[that] may include termination.”

Additionally, the Policy listed six instances to help define “gossip,” including “[t]alking about a person’s personal life when they are not present,” “[t]alking about a person’s professional life without his/her supervisor present,” and “[c]reating, sharing, or repeating” rumors about another person, that are overheard, or that constitute hearsay. The Policy was published in multiple versions of the school’s employee handbook.

Nine months after the school introduced the Policy, it terminated an employee for “Unsatisfactory Performance.” In the employee’s termination letter the school noted that there were several reasons for her termination, including “multiple complaints about repeated violations of ‘the company’s written ‘no gossip policy,’ as outlined in the company’s handbook,’ which had ‘a direct and negative impact on [her] coworker’s ability to effectively perform their job responsibilities,’” and “attempts to actively solicit and recruit coworkers to work for another company, a direct competitor.”

The ALJ concluded that the school’s Policy violated Section 8(a)(1) of the Act. The decision explained that because “[t]he language in the no gossip policy is overly broad, ambiguous, and severely restricts employees from discussing or complaining about any terms and conditions of employment,” the Policy prohibits employees from exercising their rights under the Act. Similarly, the ALJ noted that the school’s Policy further chills employees’ protected rights because it “narrowly prohibits virtually all communications about anyone, including the company or its managers.”

The ALJ then dissected the employer’s actions with respect to the terminated employee. First, the decision stated that the termination was unlawful because “Board precedent holds that discharging an employee for violating an unlawful overbroad rule is likewise unlawful.” While the school argued that the employee “did not engage in any such protected activity, but if she did, she is not afforded the protection of the [NLRA] because of her disruptive behavior and its effects on her coworkers,” the ALJ rejected this argument and found that the employee was merely discussing recent layoffs of their former co-workers and supervisor and that such discussions constitute protected concerted activity.

In its June 13, 2014 decision the Board adopted the ALJ’s finding that the employer’s “No Gossip Policy” was “overly broad.”  As a result of its finding that the employer violated Section 8(a)(1) of the NLRA when it terminated the at-issue employee for violating the “No Gossip Policy” the Board ordered full reinstatement, with back pay.

Implications For Employers

This decision highlights the continued need for employers tread lightly given the NLRB’s ever increasing fixation with workplace rules that it contends are unlawfully restricting employees’ Section 7 rights.  As the case law continues to develop, employers concerned about potential legal challenges might want to revisit their handbooks and explore the possibility of revising those policies that may be problematic in light of these recent decisions.  As a result, employer should be prepared find themselves (and their handbooks and work rules) in litigation before the NLRB.

By:  Ashley K. Laken, Esq.

On April 14, the NLRB found that a California hospital had repeatedly failed to bargain in good faith with a union representing its registered nurses and that an order requiring the hospital to reimburse the union for six months of negotiating expenses was warranted.  Fallbrook Hospital Corp., 360 NLRB No. 73.   The decision highlights the broad remedies available to the Board when an employer fails to bargain in good faith, and outlines what not to do when negotiating with the union.

The Underlying Facts

The union was certified as the bargaining agent of the hospital’s registered nurses in late May 2012, and negotiations for a first contract began in early July 2012.  The union and the hospital met eleven times between July 2012 and January 2013.

During the first eight bargaining sessions, the hospital refused to provide any proposals or counter-proposals, stating that it would not do so until it received all of the union’s proposals.  The hospital also left one of the bargaining sessions abruptly without explanation and another of the sessions three minutes after arriving.  After the eleventh bargaining session in January 2013, the hospital failed to respond to the union’s requests for future bargaining dates.

The Decision and Order

 In May 2013, an NLRB administrative law judge found that the hospital had violated Sections 8(a)(5) and (1) of the Act by failing to bargain in good faith with the union.  The ALJ recommended, among other things, a 6-month extension of the certification year, but declined to grant the union’s request that the hospital be ordered to reimburse the union’s negotiating expenses.

The Board agreed with the ALJ that the hospital had failed to bargain in good faith with the union.  Additionally, two of the three Board members participating in the decision (Chairman Pearce and Member Hirozawa) found that a 1-year extension of the union’s certification as the nurses’ bargaining agent and an award of the union’s negotiating expenses were necessary to fully remedy the detrimental impact that the hospital’s unlawful conduct had had on the bargaining process.

With respect to the extension of the certification year, Pearce and Hirozawa reasoned that the hospital had “effectively precluded any meaningful bargaining for virtually the entire certification year.”  With respect to the award of negotiating expenses, they reasoned that the record showed that the hospital “deliberately acted to prevent any meaningful progress during bargaining sessions” and that the hospital’s misconduct “infected the core of the bargaining process” to such an extent that its effects could not be eliminated by the mere application of the Board’s traditional remedy of an affirmative bargaining order.  They also reasoned that requiring the hospital to reimburse the union’s negotiation expenses was warranted to make the union whole for the resources that were wasted because of the hospital’s unlawful conduct.

The Board therefore ordered the hospital to reimburse the union for the negotiating expenses it incurred between July 2012 and January 2013 and explained that such expenses could include reasonable salaries, travel expenses, and per diems.  The Board did, however, decline the union’s request that the hospital be ordered to reimburse its litigation expenses and the union’s request that the hospital be ordered to read the Board’s remedial notice to assembled employees during paid working hours.

Concluding Thoughts

 The decision highlights the significant clubs that the Board has at its disposal when employers are found to have bargained in bad faith.  While employers are not often ordered to pay a union’s negotiating expenses, this possibility should not be ignored, especially when engaging in difficult union negotiations.