The Holidays Came Early for Employers 2019-12-19T10:05:03-07:00

Posted on December 19, 2019

Employers rejoice! The National Labor Relations Board (NLRB) released a string of rulings on Monday reversing three controversial Obama-era decisions. With these rulings, the NLRB returned to long-standing rules in areas of significance prior to the sweeping changes made by the Obama-era Board. The NLRB’s return to the “old” tests should again provide employers with the clarity necessary to determine their legal obligations.

The NLRB in Caesars Entertainment d/b/a Rio All-Suites Hotel and Casino, 368 NLRB No. 143 (Dec. 16, 2019), found that the casino’s policy barring use of its email system for nonbusiness purposes did not violate federal labor law. This decision overruled Purple Communications, where the Obama-era Board had found employees could generally use their employers’ email systems to organize or engage in union or other concerted activities protected by Section 7 of the National Labor Relations Act. Caesars reinstates the standard announced in Register Guard, 351 NLRB 1110 (2007), where employees have no statutory right to use employer equipment, including IT resources, for Section 7 purposes. Caesars, however, established an exception to the Register Guard standard “in those rare cases where the employer’s email system furnishes the only reasonable means for employees to communicate with one another.”

The NLRB also issued Apogee Retail LLC, 368 NLRB No. 144 (Dec. 16, 2019), overruling Banner Health System and finding that employers do not violate workers’ rights to act collectively when employers bar employees from discussing workplace investigations. The Board found that invoking confidentiality for workplace investigations is generally legal as long as it is limited to the period of active investigation. The Board applied its 2017 decision, Boeing Co., 365 NLRB No. 154 (2017), to find that investigative confidentiality rules fall with the “Boeing Category 1” rules.

Finally, the NLRB issued Valley Hospital Medical Center, Inc. dba Valley Hospital Medical Center, 368 NLRB No. 139 (Dec. 16, 2019), which reinstated the principle that dues checkoff ends with the expiration of a collective bargaining agreement. This decision overruled the NLRB’s 2015 decision in Lincoln Lutheran of Racine, that a union can continue to insist on dues checkoff post-expiration. The Board returned to the rule of Bethlehem Steel, which had stood for half a century, that employers do not have to facilitate a union’s finances if there is no collective bargaining agreement in place.

Board Affirms Reasonable Employer Policies on Confidentiality and Media Contact 2019-10-18T09:58:18-06:00

Posted on October 18, 2019

By Carissa Davis

Last week, the National Labor Relations Board (“Board”) held that employer policies that prohibit disclosure of confidential and proprietary information, and certain media contact rules are lawful under the National Labor Relations Act (“NLRA”). LA Specialty Produce Co., 368 NLRB No. 93 (2019).

In Boeing Co., 365 NLRB No 154 (2017), the Board held that facially neutral rules may be invalidated only if an objectively reasonable employee would interpret the rule to interfere with his exercise of §7 protected rights. This decision established a new more forgiving standard for reviewing facially neutral rules and policies.

Confidentiality: In LA Specialty Produce, a produce distributor had a decades old confidentiality policy mandating employees to protect confidential and proprietary information, including client vendor lists. The Union argued, and the Administrative Law Judge agreed, that the rule prevented employees from disclosing customer and vendor names to their labor organization, and so, chilled protected activity. But the Board reversed, stating that it was unable to perceive how the language, when reasonably read could interfere with protected rights. The Board noted that employees have the right to appeal to third parties, including employer’s vendors and customers, in support of labor disputes, but that this right does not permit employees to divulge information that the employer may lawfully conceal.

Although the rule in question prohibited the disclosure of confidential client and vendor lists, accounting records, production processes, and business operations, it did not go so far as to prohibit employees from speaking to clients and vendors and it did not apply to information such as employee salary and wages. Accordingly, the Board held, as a general rule, confidentiality policies prohibiting employees from disclosing customer and vendor lists are lawful under the Boeing test.

Media Contact: In addition to the confidentiality challenge, the Board considered the company’s media contact rule providing that, when employees are approached for comment by the media, they cannot provide information on behalf of the company- only the President is authorized to comment. Although §7 generally protects employees when speaking to the media, there is no NLRA right permitting employees to speak on behalf of their employer. (See, e.g., Valley Hospital Medical Center, 351 NLRB 1250 (2007)). When reasonably interpreted as required by Boeing, the rule only prohibits employees from responding to media interviews on behalf of their employer, it does not prohibit any and all media contact. Thus, confidentiality rules of the sort pass muster under the Boeing standard.

The slip opinion for LA Specialty Produce Co., is 368 NLRB No. 93.

The NLRB Has You Covered…By The Contract 2019-09-11T13:55:26-06:00

Posted on September 11, 2019

By Patrick Scully

In another stunning and sweeping decision, The National Labor Relations Board (“NLRB” or “Board”) has overturned the “clear and unmistakable” waiver test and concluded that employers may make unilateral changes to terms and conditions of employment “covered” by an existing collective bargaining agreement.

For decades, employers had negotiated lengthy “management rights clauses” into collective bargaining agreements only to have the NLRB strike down a change made by the employer by finding that the union did not “clearly and unmistakably” waive its right to bargain about the change. For example, if an agreement indicated that an employer could issue and amend policies and rules, the NLRB would usually find a violation of National Labor Relations Act (“NLRA” or “Act”), unless the Board found that waiver “sufficiently specific” to encompass the change. In other words, employers would negotiate what they believed was an effective waiver, only to have their bargain disrupted by the union filing an unfair labor practice charge.

Under the new test, employers will be able to rely on a defense that the objected-to change was covered by the language of the collective bargaining agreement. In such cases, the Board will now “give effect to the plain meaning of the relevant contractual language” and find a change covered if it “falls within the compass or scope of contract language that grants the employer the right to act unilaterally.”

The significance of the NLRB’s decision is best encapsulated by dissenting Member McFerran’s characterization of it: “The implication of the majority’s new standard is clear: If a management-rights provision in a collective bargaining agreement is sufficiently general, it will permit an employer to act unilaterally with respect to any specific term or condition of employment that plausibly fits within the general subject matters of the provision.”

MV Transportation, Inc., 368 NLRB No. 66 (September 10, 2019).

NLRB Enhances Its View of Property Rights 2019-09-06T17:13:53-06:00

Posted on September 6, 2019

By Patrick Scully

The National Labor Relations Board (“NLRB” or “Board”) has settled a long-brewing controversy over what constitutes “discrimination” with respect to non-employee access to employer property. Twenty years ago, the Board held in Sandusky Mall, 329 NLRB 618 (1999), that an employer discriminates against non-employee union representatives if it bars them from its property while permitting access to charitable and civic organizations.

The Sandusky decision was widely criticized in the United States Courts of Appeals. The decision also put employers in the unenviable position of weighing the legal risk of permitting the Girls Scouts and Salvation Army on their property. Today, the NLRB finally overruled Sandusky and adopted a definition of discrimination that accords with the prevailing view in the federal courts.

Now the NLRB will only find that an employer has discriminated in its denial of access to union representatives if it permits access to other organizations for similar types of activities. The Board no longer considers charitable, civic, and commercial activities to be similar to nonemployee union organizational activities. In applying its new rule to the case at hand, the NLRB found that Kroger did NOT discriminate when it barred non-employees urging a boycott of Kroger while permitting various charitable and civic entities on its property. In dissent, Member McFerran complained that the majority is issuing a series of cases making “it increasingly easy” for employers to exclude union organizers from property “open to the public”.

Kroger Mid-Atlantic, 368 NLRB No. 64 (September 6, 2019).

NLRB Drums Out Musicians and “New York New York” 2019-08-26T15:11:45-06:00

Posted on August 26, 2019

By Patrick Scully

The National Labor Relations Board (“NLRB” or “Board”) has reversed one of the Obama Board’s most fiercely debated decisions and held that a property owner may lawfully prohibit the employees of a contractor or licensee from leafletting on its private property.

In February, 2017 San Antonio Symphony employees who were members of the American Federation of Musicians Local 23 attempted to leaflet on the private sidewalk of the Tobin Center in San Antonio. The Union was protesting Ballet San Antonio’s use of recorded rather than live music for a performance of Sleeping Beauty. The Symphony, Ballet, and Opera San Antonio all enjoyed use agreements at the Tobin Center and the Symphony employees frequently rehearsed and performed at the Auditorium. The owner of the property prevented the Symphony employees from leafletting in front of the Tobin Center and directed them to the adjacent public property.

Although the majority recognized that the employees of a contractor or licensee have greater rights of access than nonemployees, it found that the Obama Board had incorrectly placed those rights above the owner’s property rights in New York New York Hotel & Casino, 356 NLRB 907 (2011). Under the New York New York standard, contractor employees enjoyed access to private property equal to the property owner’s employees, unless the property owner could show that access would significantly interfere with the use of the property or could be restricted for another legitimate business reason (e.g. maintaining production or discipline). The current NLRB found that access standard too permissive, “subject to an exception that has never been found to apply and predictably never would be found to apply.” Accordingly, the Board re-set the standard, holding that a property owner can exclude the off-duty employees of a contractor from access for “Section 7” activity (e.g. leafletting) unless “those employees work both regularly and exclusively on the property and…the property owner fails to show that they have one or more reasonable alternative means to communicate their message.” The NLRB majority asserted that this standard was more consistent with the U.S. Supreme Court’s decision in Lechmere Inc. v. NLRB, 502 U.S. 527 (1992). Under this standard, the San Antonio Symphony employees were properly excluded. In dissent, Member McFerran criticized the majority’s reliance on Lechmere, claiming it did not control this type of case and asserted that the majority had created a standard under which an employer’s property rights will invariably prevail.

Bexar County Performing Arts Center Foundation d/b/a Tobin Center for the Performing Arts, 368 NLRB No. 46 (August 23, 2019).

NLRB Serves Up An Epic Ruling For Employers 2019-08-15T10:20:02-06:00

Posted on August 15, 2019

By Patrick Scully

In its first significant decision applying the Supreme Court’s holding in Epic Systems v. NLRB, 584 U.S. ____, 138 S.Ct. 1612 (2018), the National Labor Relations Board (“NLRB” or “Board”) ruled that a restaurant owner lawfully compelled its employees to sign a revised mandatory arbitration agreement.

The employer, an operator of Latin-themed restaurants in the Houston area, required its employees to sign a revised arbitration agreement prohibiting them from opting into a class or collective wage and hour action. The employer issued the revised agreement because several employees had opted into such a wage action and the employer’s prior arbitration agreement only prohibited employees from filing class or collective actions.

The Board noted, in light of Epic Systems, that it was simply not unlawful under the National Labor Relations Act (“Act”) for an employer to require its employees to waive their right to file or opt into class or collective wage and hour actions. Accordingly, it was not unlawful for the restaurant owner to insist on its revised agreement as a condition of employment. Although it was clear that the employer imposed the new agreement in response to employees participating in the wage and hour action, the NLRB reasoned that the employer did not retaliate, because the new agreement did not actually restrict any activity protected by Section 7 of the Act.

Dissenting Board Member McFerran took issue primarily with this last point, noting that the NLRB has historically found that a facially valid work rule must be struck down if it is promulgated in response to “protected” (Section 7) activity. Member McFerran disagreed with the majority that this precedent only applied to rules that imposed restrictions on union or other protected activity. By suggesting that the Board’s decision “departs from Board precedent without explanation”, the dissent provided a recipe for the restaurant owner’s employees to appeal the decision.

Cordua Restaurants, Inc. 368 NLRB No. 43 (August 14, 2019)

NLRB Says Organizer Access to Public Spaces is Not on the Menu 2019-06-18T14:30:59-06:00

Posted on June 18, 2019

By John Alan Doran

Over thirty-five years ago, the NLRB held that an employer may not prohibit a union organizer’s access to an employer’s privately owned, but publicly accessible areas, such as an employer’s public restaurant or cafeteria, unless the organizer engages in “disruptive” conduct. A long line of subsequent Board decisions confirmed this rule. However, last Friday, the Board unequivocally reversed a slew of its prior decisions on this issue in UPMC, 368 NLRB No. 2 (06-CA-102465, June 14, 2019).

UPMC is a hospital facility that provides a publicly accessible cafeteria. Union organizers held a peaceful lunch meeting with some UPMC employees in the cafeteria. When UPMC Security learned of this, they called the police and had the organizers removed. The union filed unfair labor practice charges, and an Administrative Law Judge found in favor of the union.

On appeal, the Board reversed the ALJ’s decision. The Board reviewed a long line of federal circuit court decisions resoundingly criticizing the Board’s historical approach to organizer access to public spaces, and noted that the Board’s long-standing position directly contravened existing Supreme Court jurisprudence. The Board concluded that organizer access to privately owned, public spaces is governed by the Supreme Court’s decision in NLRB v. Babcock & Wilcox Co., 351 U.S. 105 (1965), which held that an employer may lawfully exclude union organizers from its property, except in the very rare instances where either the union has no other reasonable means to communicate with employees or where the employer discriminates against the union by allowing solicitation or distribution by others but not the union. Applying Babcock & Wilcox to these facts, the NLRB held that the employer did not violate the Act by removing the organizers because they were engaged in distribution and solicitation and the employer had consistently excluded other patrons who engaged in such activities for non-union purposes.

While the UPMC decision noted that the ruling should not impact existing employer no-distribution/no-solicitation rules, it likely does impact the application of existing employer rules for employers that have publicly accessible areas on their private property. Regardless, this landmark ruling should prompt all employers to revisit both the language and the enforcement of their no-distribution/no-solicitation rules to ensure that they are legal, robust, up to date, and consistently enforced. Employers are also wise to note that they may not exclude union organizers from public areas merely because they are organizers—it is the conduct of soliciting or distributing that supports their exclusion, not their mere affiliation with a union.

NLRB Reins In Prior Expansive View Protected Concerted Activity 2019-04-19T17:00:24-06:00

Posted on April 19, 2019

By John Alan Doran

“So, two guys walk into a bathroom…” No, seriously, this case is about two co-workers who walked into a bathroom. While in the bathroom, Employee A complained to Employee B that a former client had been dropped back in his lap, and that the former client should have been sent to someone else and “quit wasting his ***ing time.” Employee B stated that he understood the frustration. As bad luck would have it, a supervisor overheard the bathroom conversation, reported it to management, and Employee A was ultimately discharged.

An Administrative Law Judge (“ALJ”) found the conversation constituted protected concerted activity under Section 7 of the NLRA. The ALJ first found that Employee A’s complaint involved common concerns regarding their employment. The ALJ then found that Employee B’s statement of commiseration was “vocalized support” of Employee A’s supposed call to collective action. The ALJ then found that Employee A’s whining had the unstated goal of collective action because the employer failed to call Employee B to disprove this conclusion. This bizarre conclusion was based on the NLRB’s adverse inference rule, which allows an ALJ to make adverse inferences against the employer when it fails to call a witness that would be expected to support the employer’s defense.

The NLRB made short shrift of the entire ALJ analysis. First, the NLRB reminded us that protected concerted activity is only protected when it is work-related and made with an eye toward collective action among workers. Here, there was zero evidence that the bathroom whining was intended to instigate any sort of collective behavior. Second, the NLRB chastised the ALJ’s adverse inference; because Employee B was, by definition, adverse to the employer, the ALJ was not permitted to make any adverse determination against the employer simply because the employer did not call the witness. Over the years, the NLRB has artificially expanded the notion of what is protected concerted activity under the Act. It seemed that any comment about work made from one employee to another fell within the Act’s protections. But the NLRB has now made clear that protected concerted activity does not encompass every single workplace gripe or statement of exasperation; Section 7 protects only those statements that relate to the terms and conditions of employment, and only when the proven purpose of those statements is to incite others to action. The case is Quicken Loans, Inc., Case 28-CA-146517 (April 10, 2019).

NLRB Brings Back Independent Contractor Test 2019-01-25T18:00:53-07:00

Posted on January 25, 2019

By Patrick Scully

In a case handled by Sherman & Howard’s Labor and Employment Department, the National Labor Relations Board (“NLRB”) returned to its traditional independent contractor test, reversing the Obama Board’s 2014 decision in FedEx Home Delivery, 361 NLRB 610, and finding the Dallas/Ft. Worth SuperShuttle franchisees to be independent contractors. The Board explained that the FedEx decision improperly minimized the consideration of whether alleged independent contractors had significant “entrepreneurial opportunity” for gain and loss. In addition, the Board clarified that regulatory requirements imposed on the SuperShuttle franchisees could not be considered “control” asserted by the alleged employer. The Board concluded that in light of the franchisees’ ownership and control over their vans, their near complete freedom to independently control their schedules and accept or reject work, the absence of supervision, and the franchisees’ significant entrepreneurial opportunity, they could not be considered employees covered by the National Labor Relations Act. In a strongly-worded dissent, Member McFerran quipped “calling the SuperShuttle drivers ‘entrepreneurs’ or ‘small business owners’ doesn’t make them any less employees.” We respectfully disagree with the dissent.

SuperShuttle DFW, Inc. and ATU Local 1338, 367 NLRB No. 75 (January 25, 2019).

Happy New Year! Joint Employer Test Gets Muddier 2019-01-02T11:06:23-07:00

Posted on January 2, 2019

By Patrick Scully

On December 28, 2018, the U.S. Court of Appeals for the District of Columbia Circuit issued a decision partially granting enforcement to the National Labor Relations Board’s controversial decision in Browning-Ferris Industries (316 NLRB No. 186 (2015), “BFI”) which radically altered the test for when separate companies can be declared “joint employers” under the National Labor Relations Act. In a 2-1 decision, the court affirmed the NLRB’s use of elements of “indirect control” over a contractor to find joint employment, but remanded the case to have the NLRB distinguish those elements from aspects of the business relationship intrinsic to company-to-company contracting. In other words, the court failed to resolve the main problem with the BFI decision—that such routine contracting provisions put all contractors at risk of being declared a joint employer with their business partners. In a searing dissent, Senior Judge Randolph pointed out that the court should not even render a decision while the NLRB is in the process of issuing a formal rule on the definition of “joint employer”. Judge Randolph argued that the majority’s opinion effectively short-circuits the NLRB’s rulemaking process, as the majority held the Agency is entitled to no particular deference on the issue of which companies may be declared joint employers. Judge Randolph pointed out that by failing to distinguish between normal business contract provisions and evidence of so-called “indirect control”, the court was creating more confusion and assuring that any eventual NLRB decision would return to the court on appeal. The more immediate question for employers, however, is whether the NLRB will now be able to return to a more rational definition of joint employment that requires evidence that two employers directly codetermine employees’ essential terms and conditions of employment. Perhaps we will have that answer by 2020.

Browning-Ferris Industries of California, Inc. v. National Labor Relations Board, United States Court of Appeals for the District of Columbia Circuit, Case No. 16-1028 (December 28, 2018).

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