Providing further evidence that the Obama National Labor Relations Board will be highly activist and pro labor, the Board has proposed a new rule  which would require employers to post a notice informing employees of their National Labor Relations Act (“NLRA”) rights, including the right to: organize a union; form a union; bargain collectively through a union representative; and engage in concerted activity with other employees.

The Board justifies the rule as necessary based on presumption that  most employees are unaware of their rights under the NLRA to engage in protected concerted activities and form unions. The Board believes that requiring a notice posting by all employers will inform employees of their rights and will also dissuade employers from engaging in unfair labor practices under the NLRA.
 

The proposed rule would require every employer to post an 11 by 17 inch poster, and distribute the notice electronically if the employer customarily communicates with employees electronically. Concerning the content of the notice, the Board has proposed using language adopted by the Department of Labor (“DOL”) for its rule requiring Federal contractors and subcontractors to post a notice of employees’ rights under the NLRA. According to the Board, using DOL’s posting also would allow employers who have already posted DOL notices to be in compliance without posting a new notice.

Proposed sanctions for employers who fail to comply with the rule include treating the failure to comply as an unfair labor practice under the NLRA. The Board has also proposed tolling the NLRA’s six month statute of limitations on the filing of an unfair labor practice charge if the employer fails to post the required notice.

Republican Board Member Brian Hayes has dissented from the proposed rule and believes the Board lacks statutory authority to promulgate it. Hayes also believes the Board lacks the authority to impose the proposed remedies.

The proposed rule is subject to a sixty day comment period. Public comment on the proposed rule can be submitted electronically to www.regulations.gov, or by mail to Lester A. Heltzer, Executive Secretary, National Labor Relations Board, 1099 14th Street, N.W., Washington, DC
 

The National Labor Relations Board (“NLRB”) recently filed a complaint against American Medical Response of Connecticut, Inc. (“AMR”), alleging that AMR violated the National Labor Relations Act (“NLRA”) by discharging an employee for posting comments on her Facebook page that were critical of her supervisor. In addition, the NLRB’s complaint alleges that AMR’s social networking policy constituted an unlawful restriction on employees’ rights to communicate with one another about their terms and conditions of employment and otherwise engage in protected concerted activity under the NLRA. A hearing before an Administrative Law Judge is scheduled with respect to the NLRB’s allegations on January 25, 2011.

AMR’s Employee Handbook included a Blogging and Internet Posting Policy that prohibited employees from: (1) posting pictures of themselves which depict AMR in any way unless written approval from the Vice President of Corporate Communications is granted; and (2) making “disparaging, discriminatory, or defamatory comments when discussing the Company or the employee’s superiors, co-workers and/or competitors.” According to the NLRB complaint, an AMR employee named Dawnmarie Souza (“Ms. Souza”) “engaged in concerted activities with other employees” on November 8, 2009, by criticizing her supervisor on her Facebook page. According to a press release issued by the NLRB that accompanied its filing of the complaint, Ms. Souza’s criticism of her supervisor drew supportive responses from her co-workers, which resulted in Ms. Souza making additional negative comments about her supervisor on her Facebook page. Ms. Souza was discharged from her employment with AMR on or about December 1, 2009.

In the complaint, the NLRB alleges that AMR interfered with, restrained, and coerced its employees in the exercise of their right to engage in protected concerted activities, by promulgating its Blogging and Internet Posting Policy and by discharging Ms. Souza. The NLRB also alleges that AMR discriminated against Ms. Souza for her protected concerted activity by discharging her. According to the NLRB’s press release, the NLRB is taking the position that AMR’s Blogging and Internet Posting Policy contains unlawful provisions, including: (1) the provision that prohibits employees from making disparaging remarks about AMR or supervisors of AMR; and (2) the provision that prohibits employees from depicting AMR in any way without permission.

The NLRB’s position regarding the unlawfulness of AMR’s social networking policy appears to signify a departure from a recent opinion issued by the NLRB General Counsel’s Division of Advice on December 4, 2009. In that opinion, the Division of Advice considered an employer’s social networking policy that prohibited, among other things, “disparagement of company’s or competitors’ products, services, executive leadership, employees, strategy, and business prospects.” The Division of Advice concluded that the policy, as written, was lawful because employees could not reasonably construe the policy as prohibiting the types of concerted activities protected by the NLRA. The Division of Advice also found no evidence that the policy was promulgated in response to union organizing activity or was applied for the purpose of discouraging union organizing activity.

Although a hearing has not yet been held in the AMR case and a decision has not yet been rendered, the issuance of a complaint in that case indicates that the NLRB will closely scrutinize employer policies that potentially restrict an employee’s right to discuss terms and conditions of employment through social networking sites. Accordingly, all employers (regardless of whether their employees are unionized or not) should take this opportunity to review their social networking policies, and amend those policies to ensure that there is no language that could reasonably be construed by employees as prohibiting concerted activities relating to terms and conditions of employment. Employers who are contemplating the promulgation of a social networking policy should make sure to craft the language of the policy carefully to reduce the risk that the NLRB will find the policy to be an unlawful restriction on employee rights.
 

After much anticipation regarding what the reconstituted National Labor Relations Board’s agenda would be, the past month has revealed that one of the Board’s and the Acting General Counsel’s priorities is revamping a number of the Board’s policies on remedies. Those changes are discussed below.

Interest Awards

In late October, the Board issued a decision that changes a long-standing remedial policy on how interest on monetary awards is calculated. In Kentucky River Medical Center, 356 NLRB No. 8, the Board unanimously held that interest on backpay and all other monetary awards will be compounded on a daily basis. This is a break from its previous policy that interest was calculated on a simple basis.

The Board concluded that “compound interest better effectuates the remedial policies of the Act than does the Board’s traditional practice of ordering only simple interest and that, for the same reasons, interest should be compounded on a daily basis, rather than annually or quarterly.” The Board justified its change in policy by pointing to the “norms” in private lending practices, as well as the IRS’ policies regarding compound interest. This case applies retroactively to all pending cases, no matter what stage they are in, unless doing so would be manifestly unjust.
 

Remedial Notices

Another long-standing Board policy required the posting of paper notices of violation in an appropriate physical location within the employer’s plant or office. The Board’s decision in J. Picini Flooring, 356 NLRB No. 9, alters this policy by requiring that employers who customarily communicate with employees using electronic means (i.e. email, internet, intranet), must post remedial notices using those same electronic means. The Board reasoned that in order to achieve the remedial goal of posting a notice, “notices must be adequately communicated to the employees or members affected by the unfair labor practices found.” The Board found that while “traditional means of communication remain in use, email, postings on internal and external websites, and other electronic communication tools are overtaking, if they have not already overtaken, bulletin boards as the primary means of communicating a uniform message to employees and union members.”

10(j) Injunction Initiative

On September 30, 2010, the NLRB’s Acting General Counsel, Lafe E. Solomon, announced an initiative to strengthen the Agency's response to “nip in the bud” cases with a more streamlined and efficient 10(j) injunction procedure. Solomon characterized “nip-in-the-bud” cases as those where a pro-union employee is terminated during the course of a union organizing drive, and the discharge thereby “‘nips in the bud’ all of the employees’ efforts to engage in the core Section 7 right to self-organization.” The new procedure adopts the following timeline:

• Upon the filing of a charge, the Regions must identify potential 10(j) organizing campaign discharges.
• The lead affidavit should be taken within 7 calendar days from the filing of the charge and the charging party’s evidence should be obtained within 14 calendar days of the filing of the charge.
• Where the evidence obtained from the charging party “points to” a prima facie case on the merits, the Region must notify the employer that it is considering 10(j) and request a position statement. The position statement must be submitted within 7 calendar days of the written notification.
• The Region must make a determination of the case on the merits within 49 days from filing, and a decision regarding whether 10(j) relief is appropriate should be made at the same time.
• The Region must then submit all meritorious 8(a)(3) discharge cases to the Injunction Litigation Branch (“ILB”) within 7 days of the merit determination.
• Once the ILB receives the case, it is reviewed and the ILB makes a determination within 2 business days as to whether 10(j) relief is warranted.
• The Acting General Counsel then determines whether he agrees with the ILB’s determination, and his authorization must be submitted within 2 business days.
• The case is submitted to the Board for final review and approval. Once the Board approves, the Region must file the 10(j) papers with the appropriate District Court within 2 business days.

 

On March 27, President Obama announced 15 recess appointees to administrative posts, including controversial Democratic nominee Craig Becker, along with union labor attorney Mark Pearce, as members of the National Labor Relations Board. The recess appointees, particularly Becker, were criticized by Republicans and business groups and praised by Democrats and labor leaders. Becker has been a controversial nominee due to some of his past academic writings and his current employment as in-house counsel at the Service Employees International Union and the AFL-CIO. Many fear that Becker and Pearce, along with current NLRB Chair Wilma Liebman, could effect significant labor law changes, either through the adjudication process with changes to significant case law or via administrative rule making. We have previously reported on some of the potential case law changes that may be in the offing.

The EEOC nominees given recess appointments were Jacqueline Berrien (Associate Director-Counsel of NAACP) to serve as EEOC Chair, Victoria Lipnic (Of Counsel to Seyforth Shaw) and Chai Feldblum (Georgetown University Law Center Professor) as EEOC Commissioners, and P. David Lopez as General Counsel (EEOC Trial Attorney).

The recess appointments will last until the end of 2011 Congressional session. Notwithstanding the recess appointments, the nominations will remain pending in the Senate for confirmation, according to the White House. Not included in the list of NLRB recess appointments was the third nominee to the agency – Republican Brian Hayes, a former management attorney and current Labor Policy Director for the Republicans on the Senate Committee on Health, Education, Labor and Pensions.
 

We previously reported on President Obama’s nomination of three individuals, Democrats Craig Becker and Mark Pearce, and Republican Brian Hayes, to the National Labor Relation Board (“NLRB”). The most controversial nominee, AFL-CIO Associate General Counsel Becker, has come under criticism from lawmakers and employers for his well-documented pro-union views. Becker’s nomination has been blocked by Republican senators in light of these concerns, as well as concerns that he would have to recuse himself from a great number of cases for up to two years after his confirmation in light of his current employment with the AFL-CIO and the Service Employees International Union.

Department of Labor Secretary Hilda Solis, speaking at the AFL-CIO’s Executive Council meeting on March 3, indicated that unions would be very pleased with how Becker’s nomination gets resolved. This implies that Becker will be appointed to the NLRB as a recess appointment later this month, which does not require Senate approval, for a term of up to 20 months.

If Becker and fellow Democratic nominee Pearce, a former NLRB Regional Attorney from Buffalo, are appointed, they would join current NLRB Chair Wilma Liebman to form a three person Democratic majority on the NLRB. There is concern that Becker, and this new found majority, might attempt to implement some parts of the Employee Free Choice Act via administrative rule making or by means of NLRB decisions and case law. Possible changes could include more expeditious representation elections and/or the use of card check for recognition in some situations.

This development bears watching. The potential for change in a number of areas with a change in the composition of the Board is great. This includes a number of Bush-Board NLRB decisions about which we have previously reported.
 

A recent determination by the United States Supreme Court serves as a reminder that dealing with strikes is a particularly dangerous activity for employers and requires careful planning and counsel at every step. In the midst of an economic strike in 1999, a Connecticut nursing home/assisted living facility made the decision to hire permanent replacements. Ten years later, the unfair labor practice case generated by hiring the replacements has finally come to a close with the United States Supreme Court refusing to hear the case, and leaving the employer with a back pay liability that could reportedly exceed $3 million. The saga of the case provides lessons on both an employer’s use of permanent replacements, and on the potential economic consequences of fighting an unfair labor practice charge.

As noted, the case began in 1999, when the employer, Church Homes, Inc., began hiring permanent replacement employees a month into a strike. Under federal labor law, an employer is permitted to hire permanent replacements for strikers involved in an economic strike. The strike was an economic strike, so permanent replacements were permitted, but what made this case different was the fact that Church Homes actively concealed its hiring of the replacements, bringing them on board without notice to the union or the strikers. It was not until several weeks later, after approximately 100 replacements had been hired, that the company revealed this fact during a mediation session. The union subsequently made an unconditional offer to return to work, but only 79 of the approximately 185 strikers were returned by the company. The company relied on its hiring of permanent replacements, as it is typically permitted to do in an economic strike situation, to deny reinstatement to the other strikers.

The union filed unfair labor practice charges against the company claiming that the employer’s hiring of permanent replacement workers was not for legitimate business reasons but rather was to punish the strikers and break the union. An Administrative Law Judge initially found merit in the charges and ruled against the employer. Church Homes appealed to the National Labor Relations Board. In a 2-1 decision the Board found in favor of Church Homes. The Board recognized the long standing right of an employer to hire permanent replacements during an economic strike and further found that the employer had no obligation to advise the union that it was hiring replacements. As a result, it concluded that the NLRB’s General Counsel had failed to carry its burden of proving that the employer acted unlawfully.

The Board’s decision was appealed to the United States Court of Appeals for the Second Circuit which, in 2006, reversed the Board’s decision. While the Court agreed that permanent replacements were appropriate in an economic strike and that there was no absolute obligation for an employer to notify a union in advance of the hiring permanent replacements, it concluded that active concealment of the hiring of replacements can support an inference of improper motive, absent proof of an affirmative legitimate reason for the secrecy. The Court remanded the case to the Board for further consideration.

On remand, the Board changed course and ruled against the employer. Finding a lack of credible evidence to support a legitimate reason for the employer’s secrecy, the Board concluded that “it would appear that the [Second Circuit] placed on the [employer] the burden of establishing a lawful motive for maintaining secrecy in the hiring of replacements.” Because the employer did not meet this burden, its failure to return the strikers to work because of the hiring of the replacements was found to be unlawful.

This second Board decision was affirmed on appeal back to the Second Circuit, which reinforced its prior conclusion that “the logical inference to be drawn from [the employer’s] secrecy, absent evidence of a legitimate purpose or credible explanation for the secrecy, was that [it] intentionally concealed its hiring of permanent replacements to remove Union members from its workforce and thereby break up the Union.” The employer subsequently sought review by the Supreme Court. Just a few weeks ago, the Supreme Court announced that it would not hear the case, finally bringing this saga to a close after nearly 10 years.

There are two significant lessons to be learned from this tortuous history. While the good news is that neither the Second Circuit nor the Board found that hiring permanent replacements in secrecy automatically proves improper motive, these decisions make clear that an employer must be able to articulate and document a legitimate business reason for the secrecy as part of its decision making process. The Court and the Board noted that concern over violence could be a legitimate justification for secrecy, but there must be credible evidence that such a fear is warranted. Presumably there could be other reasons which would support secrecy. But without credible contemporaneous evidence that such concerns in fact motivated the employer to maintain secrecy, an employer who does not provide advance notice of the hiring of replacements does so at great risk.

The second lesson of the case relates to the inordinate amount of time it can take to fully litigate unfair labor practice cases under the current statutory scheme. This case, with an Administrative Law Judge decision, two NLRB proceedings and two trips to the Second Circuit before a final rejection by the Supreme Court, took nearly 10 years. Recent reports indicate that potential back pay could exceed $3 million. Significant time delays mean that employers must either be prepared to face potentially enormous back pay exposure in their efforts to vindicate their rights, or prematurely forfeit their position on the merits because that potential liability is simply too great.
 

This blog was prepared with the assistance of Bond, Schoeneck & King PLLC attorney Kerry Langan.

On July 9, 2009, the White House announced that it had sent three nominees for membership to the National Labor Relations Board (“NLRB” or “Board”) to the Senate for confirmation.  The latest nominee, Republican Brian Hayes, joins previously announced nominees, Democrats Craig Becker and Mark Gaston Pearce, as the three President Obama nominees to the five member Board. 

Currently, the Board has been operating with just two members, Chairperson Wilma Liebman (a Democrat) and Member Peter Schaumber (a Republican).  The United States Court of Appeals for the D.C. Circuit has recently held that the two-member Board lacks authority to issue decisions.  See Laurel Baye Healthcare of Lake Lanier, Inc. v. NLRB, No. 08-1162 (D.C. Cir. May 1, 2009).  Three other federal Circuits have held to the contrary.  See Northeastern Land Services Ltd. d/b/a The NLS Group v. NLRB, No. 08-1878 (1st Cir. Mar. 13, 2009);  Snell I sland SNF LLC, d/b/a Shore Acres Rehab. & Nursing Ctr. v. NLRB , No. 08-3822 (2d Cir. June 17, 2009); New Process Steel, L.P. v. NLRB, Nos. 08-3517, 08-3518, 08-3709, 08-3859 (7th Cir. May 1, 2009).

 

The new nominees, assuming they are confirmed by the Senate, which now has 60 Democratic members, will address the quorum issue and allow the Board to operate with a 3-2 Democratic majority.  And, the three Democratic members are all on record as being staunchly pro-union in their views.  Chair Liebman has been a vigorous dissenter in a number of Bush-era Board decisions.  Nominee Becker is currently Associate General Counsel to both the Service Employees International Union and the AFL-CIO.  See NLRB Press Release.  Nominee Pearce is a former NLRB attorney at the Regional level and has been a union-side labor lawyer in recent years.  See NLRB Press Release.

 

Although the proposed Employee Free Choice Act (“EFCA”) and other potential labor law reforms have received the lion’s share of attention from commentators and labor and management advocates, the composition of the NLRB may well have a greater impact on labor-management relations than any compromise EFCA or labor law reform ultimately enacted.

 

Board decisions in many areas have historically been heavily influenced by presidential appointments.  With a newly minted 3-2 majority, here are some cases that might be ripe for reversal by the new Board:

•  Weingarten Rights in a Non-Union Setting.  IBM Corp., 341 NLRB No. 148 (2004).  In IBM, the Board held 3-2 that employees in a non-union workplace are not entitled to a co-worker representative in investigatory interviews that may result in discipline.  The Board has flip-flopped on this issue over the years and will likely return to the prior rule of Epilepsy Foundation of Northeast Ohio, 331 NLRB No. 92 (2000), holding that non-union employees are entitled to employee representatives in those cases.

• Graduate Students Rights to Organize as Employees Under the Act.  Brown University, 342 NLRB No. 42 (2004).  Chair Liebman vigorously dissented in the Brown case, which held that graduate students, whose duties were primarily related to their status as students, were not statutory employees and therefore could not organize under the Act.  This decision overruled New York University, 332 NLRB 1205 (2000).  A change in this rule, reverting to the New York University rule, could have significant implications for institutions of higher education.

• Organization of Employees of Joint Employers in a Single Bargaining Unit.  H.S. Care LLC, 343 NLRB No. 76 (2004).  The Board returned to the long standing rule that employees of a temporary agency cannot be included in a bargaining unit of regular employees of the employer unless both the employer and temporary agency consent.  The new Board may return to the M.B. Sturgis, 331 NLRB 1298 (2000), rule to the contrary, with significant implications for employers who use temporary employees.

• Salting Cases.  Exterior Systems, Inc., 338 NLRB No. 82 (2002).  A Board majority found that union salts – employees who work for a union and apply for employment with an employer with an intent to organize the employer or an intent to not be hired so a charge may be filed – must have a genuine interest in gaining employment to be protected by the Act.  It is likely that this standard will be repudiated, returning to FES, 331 NLRB 9 (2000), making it easier for unions to maintain unfair labor charges against employers which they target for organization.

• Email Solicitation.  The Guard Publishing Co., 351 NLRB 1110 (2007).  In Guard Publishing, the Board decided, in a 3-2 decision, that employers may lawfully maintain a policy prohibiting use of its email system for “non-job related solicitations.”  The new Board may reverse this decision and require employers to allow union adherents to use email systems to solicit employees to support and join unions during union organizing drives.

The following examples are just a few of the changes that may be in store with a new Board.  The changes could be many and their impact will likely be great.  As is often the case in the analogous situation of Supreme Court composition, the changes effected by the new Obama NLRB may well have greater impact than any legislative changes we see in the next four years.