Citing “unprotected, indefensible conduct” that “created a reasonably foreseeable danger” to patients, the Second Circuit, in NLRB v. Special Touch Home Care Services, Inc., stung the National Labor Relations Board (“NLRB”) by upholding a home care employer’s refusal to reinstate strikers who “misled the employer” by falsely advising that they intended to report to work.

In 2003, when 1199 SEIU announced a three-day strike -- after giving 10 days advance notice required for health care institutions -- the employer lawfully polled its home health aides as to whether they intended to report to work as usual at the homes of patients they were assigned to assist.  While the employees were under no obligation to answer, most of them did respond, and the employer made arrangements to cover those who said they would not report to work, in order to meet the employer’s duty to its patients.

However, 48 home health aides who advised the employer that they intended to report to work nevertheless did not do so.  The employer argued that this conduct was “unprotected,” because, by misleading the employer, the aides failed to take “reasonable precautions” to avoid a risk of injury to the homebound (typically frail and elderly) patients whom the aides were assigned to assist.  Because the employer had no notice that these 48 employees would not report to work -- and none of them called in to say so -- the employer had to struggle to find coverage belatedly, and could not cover all of the patients, many of whom suffer from conditions like Alzheimer’s, strokes, Parkinson’s disease, and diminished mobility.

Seventy-five strikers who told the employer they would be out, or who called in prior to their shift, were reinstated to their positions when the three-day strike ended.  However, the 48 who misrepresented that they would report to work were not immediately reinstated (the employer instead placed them on a list for future openings).

The NLRB held that both groups of strikers were protected, reasoning that the 10-day advance-notice for strikes at health care entities was the only pre-strike notice required.  However, the Second Circuit rejected the NLRB’s view, holding that an otherwise lawful striker becomes unprotected if he “cease[s] work without taking reasonable precautions” to shield employers (or here, patients) from “foreseeable imminent danger due to sudden cessation of work.”  This conduct was regarded as unprotected under a line of industrial cases where strikers left their workstations in conditions that were potentially perilous to the public or the employer.  Here, by misleading the employer as to their intention to report to work, the 48 home health aides left the employer unable to protect seriously ill patients, thereby placing them in “imminent danger,” and rendering their strike activity “unprotected.”

On January 25, 2013, the same day that the U.S. Court of Appeals for the D.C. Circuit ruled that the recess appointments of Richard Griffin and Sharon Block were unconstitutional, National Labor Relations Board ("NLRB") Members Griffin, Block, and Chairman Mark Gaston Pearce held, in DirectTV U.S. DirecTV Holdings, LLC, that several seemingly neutral and reasonable employer policies promulgated in a non-union setting unlawfully restricted protected activity in violation of the National Labor Relations Act ("NLRA").

The first policy, contained in the employee handbook, instructed employees in part:  "Do not contact the media."  The NLRB found this portion of the policy to be overly broad and unlawful because employee communication with newspaper reporters about labor disputes is protected activity under the NLRA, and the NLRB believed that employees would reasonably construe the rule to prohibit such protected communication.

The second policy, posted on the employer's intranet, provided in part:  "Employees should not contact or comment to any media about the company unless pre-authorized by Public Relations."  The NLRB determined that this rule was overly broad and unlawful for the same reason as the first policy.  The NLRB further held that "any rule that requires employees to secure permission from their employer as a precondition to engaging in protected concerted activity on an employee's free time and in non-work areas is unlawful."

The third policy, contained in the employee handbook, provided in part:  "If law enforcement wants to interview or obtain information regarding a DIRECTV employee . . . the employee should contact the security department in El Segundo, Calif., who will handle contact with law enforcement agencies and any needed coordination with DIRECTV departments."  The NLRB interpreted the term "law enforcement" to include not only the police and representatives of other criminal law enforcement agencies, but also NLRB agents.  Accordingly, the NLRB concluded that this rule was unlawful because employees would reasonably believe that they were required to contact the employer's security department before cooperating with an NLRB investigation.

The fourth policy, contained in the employee handbook, instructed employees in part:  "Never discuss details about your job, company business or work projects with anyone outside the company" and "Never give out information about customers or DIRECTV employees."  The rule included "employee records" as a category of confidential information that could not be discussed or disclosed.  The NLRB found this rule to be unlawful because employees would reasonably understand the rule to restrict discussion of their wages and other terms and conditions of employment.  The NLRB also held that the rule did not exempt protected communications with third parties such as union representatives, NLRB agents, or other government agencies investigating workplace matters.

The fifth policy, posted on the employer's intranet, provided in part:  "Employees may not blog, enter chat rooms, post messages on public websites or otherwise disclose company information that is not already disclosed as a public record."  The NLRB found this rule to be unlawful, because it determined that employees would reasonably interpret "company information" to include information regarding their wages, discipline, performance ratings, and other terms and conditions of employment.

This decision demonstrates that the NLRB is determined to continue its focus on protected activity in non-union settings, and to strike down workplace policies and rules that it believes restrict such protected activity.  In light of the D.C. Circuit Court of Appeals' recent decision invalidating the recess appointments of Members Griffin and Block, it is not clear whether this decision will have any precedential effect.  Nevertheless, employers should carefully examine their own policies to determine whether any revisions or clarifications are necessary before those policies are challenged.

The U.S. Court of Appeals for the District of Columbia Circuit held today, in Noel Canning v. NLRB, that President Obama's recess appointments to the National Labor Relations Board ("NLRB") on January 4, 2012 were unconstitutional because the Senate was not actually in "recess" at the time of the appointments.  At least for now (pending a likely appeal to the U.S. Supreme Court), this holding essentially means that every decision issued by the NLRB from January 4, 2012 to the present is invalid because the NLRB lacked a valid quorum of three members during this entire time.  This holding also means that the NLRB currently has only one properly appointed member (Chairman Mark Gaston Pearce), and therefore lacks authority to issue any decisions or take any action going forward.

On January 4, 2012, President Obama appointed three members of the NLRB:  (1) Sharon Block, who was appointed to fill a vacancy that had arisen on January 3, 2012; (2) Terence Flynn, who was appointed to fill a vacancy that had arisen on August 27, 2010; and (3) Richard Griffin, who was appointed to fill a vacancy that had arisen on August 27, 2011.  At the time of the purported recess appointments, the Senate was operating pursuant to a unanimous consent agreement, which provided that the Senate would meet in pro forma sessions every three business days from December 20, 2011 through January 23, 2012.  During its January 3, 2012 pro forma session, the Senate acted to convene the second session of the 112th Congress and to fulfill its duty under the Twentieth Amendment to the U.S. Constitution, which provides that "the Congress shall assemble at least once in every year, and such meeting shall begin at noon on the 3d day of January, unless they shall by law appoint a different day."

In general, the U.S. Constitution requires that members of the NLRB (as officers of the United States) must be nominated by the President and appointed "by and with the Advice and Consent of the Senate."  However, the Recess Appointments Clause of the U.S. Constitution permits the President to "fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session."

At the time President Obama appointed Members Block, Flynn, and Griffin, Republican Senators complained that the appointments bypassed the Constitutionally mandated Senate confirmation process for Presidential nominees.  In Noel Canning, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit unanimously agreed that the appointments were unconstitutional.

The Court initially determined that the term "the Recess" in the Recess Appointments Clause applies only to recesses that occur in between sessions of Congress -- not to breaks in activity that occur during a session of Congress.  The NLRB conceded during oral argument that the appointments were not made during the intersession recess; instead, they were made on January 4, 2012, one day after Congress began a new session on January 3, 2012.

The Court also found it significant that the Recess Appointments Clause only permits the President to fill vacancies "that may happen during the Recess of the Senate."  The Court interpreted this provision to mean that the vacancy actually must arise during the Senate's intersession recess in order for the President to have the authority to fill a vacancy without going through the Senate confirmation process.  The Court determined that none of the three vacancies that President Obama sought to fill on January 4, 2012 arose "during the Recess of the Senate," and found that the appointments were unconstitutional for this reason as well.

There is no doubt that this decision will be appealed to the U.S. Supreme Court.  We will provide updates on this blog as they become available.

For nearly 35 years, employers in pre-arbitration discovery with a union have not been required to disclose witness statements obtained during internal workplace investigations.  However, consistent with its unabashedly pro-union year-end theme of overturning longstanding precedent, the National Labor Relations Board (“NLRB” or "Board") in American Baptist Homes of the West, d/b/a Piedmont Gardens abandoned this bright-line rule in favor of a fact-specific balancing test.  The balancing test will be applied to all information requests made after December 15, 2012.

Under Section 8(a)(5) of the National Labor Relations Act (“NLRA”), an employer must furnish a union with relevant information necessary to the union’s performance of its duties, including for grievance or arbitration purposes.  Under a rule established in its 1978 Anheuser-Busch decision, the Board had consistently applied a blanket exemption from disclosure for witness statements obtained during internal investigations of employee misconduct, reasoning that such an exemption was necessary to avoid coercion and intimidation and to encourage cooperation in internal investigations.

Finding its logic “flawed,” the Board in Piedmont Gardens explicitly rejected the Anheuser-Busch rule.  In its place, the Board held that the production of witness statements should be subject to the same standard as other union information requests and that any attempts to withhold disclosure should be analyzed using the test developed by the U.S. Supreme Court in Detroit Edison Co. v. NLRB.  Under this test, where requested witness statements may contain relevant information, an employer may refuse to produce them only if it can show that a legitimate and substantial confidentiality interest outweighs the union’s need for the information.  Additionally, in order to assert a valid confidentiality defense, an employer must raise its concerns to the union in a “timely manner” and offer an accommodation regarding the information requested before refusing to disclose the statement.

Essentially, a longstanding bright-line rule has been replaced with a test that will force employers to make a case-by-case prediction of how the Board will apply a subjective balancing of interests.  This unclear standard is almost certain to extend the grievance process as parties engage in lengthy proceedings to resolve confidentiality claims.  Lone dissenting member Brian Hayes expressed these very concerns, and he also noted that the production of witness statements is inconsistent with existing guidance from the Equal Employment Opportunity Commission regarding confidentiality in connection with an investigation of an employee’s harassment complaint.

When this decision is combined with the NLRB’s Banner Health decision (previously reported here), which found that an employer’s rule requiring confidentiality during an internal investigation was an unfair labor practice, the effect is a major shift in the law that impedes an employer’s ability to conduct effective and meaningful internal investigations.  In light of these decisions, employers should reassess their current investigatory practices, including whether to continue to produce witness statements, and if so, how best to protect employees from legitimate confidentiality concerns regarding the disclosure of those statements.

The National Labor Relations Board (“NLRB”) continues to issue rule-changing decisions that create troubling results for employers.  We recently reported, for example, on the NLRB’s reversal of decades-old precedent when it ruled that a dues checkoff provision survives the expiration of a collective bargaining agreement.  Two days after issuing that decision, the NLRB issued a decision in Alan Ritchey, Inc., holding that an employer must bargain with a union under certain circumstances prior to imposing discretionary discipline on an employee who is represented by a union.

This new rule will apply only in the absence of a binding agreement between the employer and the union to address discipline, such as a grievance-arbitration procedure.  Therefore, as the NLRB explained, this obligation to bargain over employee discipline will typically arise only after a union is newly certified, but before the parties have agreed to a first contract.

In Alan Ritchey, Inc., after the union was certified and while negotiations were being conducted for a first contract, the employer continued to rely on its pre-existing five-step progressive disciplinary system set forth in its employee handbook to discipline several employees for absenteeism, insubordination, threatening behavior, and failure to meet efficiency standards.  Pursuant to the handbook, the employer reserved the right to exercise discretion in the enforcement of policies, and the employer admittedly exercised this discretion in setting the levels of discipline with regard to the employees in this case.  For example, when imposing discipline for failing to meet performance standards, three employees were treated leniently because of extenuating circumstances -- one employee’s husband died, another worked in a low volume area, and another was unable to work consecutive days in the same position.

The Union filed unfair labor practice charges to challenge these disciplinary actions, taking the position that it should have first been notified and given an opportunity to bargain.  The NLRB agreed.  It held that even though the employer’s existing discipline system represents the status quo that can and must be continued during bargaining for a first contract, the employer was not privileged to exercise any discretion with regard to that discipline system without negotiating with the union.  Rather, the employer was required to provide the union with notice and an opportunity to bargain each time it seeks to exercise any discretion with regard to employee discipline.  Recognizing that it had never articulated this requirement before, the NLRB opted to apply the rule only prospectively.

The NLRB set forth a few limiting principles in laying out this rule:

• First, the employer will only be required to provide the union with notice and an opportunity to bargain prior to implementing the discipline where it seeks to impose a suspension, demotion, or discharge.  For lesser forms of discipline, such as warnings and counselings, there is still a bargaining obligation, but the employer can delay providing the notice and opportunity to bargain until after the implementation of the discipline.
• Second, where there is an obligation to provide pre-implementation notice and opportunity to bargain, the employer need not bargain to agreement or impasse at this stage.  The employer need only provide sufficient notice, and provide responses to union information requests, if any.  If the parties cannot reach an agreement, the discipline can be imposed, and the bargaining obligation continues after imposition (albeit with the possibility that the discipline may have to be rescinded or altered).
• Third, no prior notice is required where “exigent circumstances” exist.  The NLRB defines this as a reasonable, good faith belief that “the employee’s continued presence on the job presents a serious, imminent danger to the employer’s business or personnel.”  This includes situations where the employer believes the employee is engaging in unlawful conduct, is posing a significant risk of imposing legal liability on the employer, or threatens safety, health, or security inside or outside the workplace.

In its decision, the NLRB expressed its view that this new bargaining obligation will not “unduly burden” employers.  It is difficult to agree with this assessment.  This new obligation presents a significant impediment to an employer's ability to manage its workforce while bargaining for an initial contract.  Although the employer need not complete bargaining regarding the discipline before imposing the proposed discipline, the obligation to provide meaningful notice and to respond to union information requests prior to imposing the proposed discipline will certainly create significant delays in the disciplinary process.

The National Labor Relations Board ("NLRB") recently re-examined the issue of whether an employer's obligation to check off union dues from employees' wages terminates upon the expiration of a collective bargaining agreement that contains a dues checkoff provision.  This issue was seemingly resolved more than 50 years ago, in the NLRB's Bethlehem Steel decision.  However, on December 12, 2012, in its WKYC-TV, Inc. decision, the NLRB reversed its 50 year-old precedent and held that an employer's obligation to check off union dues continues after the expiration of a collective bargaining agreement that establishes such an arrangement.

In its 1962 Bethlehem Steel decision, the NLRB considered the issue of whether the employer had violated its obligation to negotiate in good faith by unilaterally refusing to honor the union security clause and the union dues checkoff provisions contained in an expired collective bargaining agreement.  Although the NLRB found that both union security and dues checkoff provisions are mandatory subjects of bargaining, the NLRB held in Bethlehem Steel that the employer did not violate the National Labor Relations Act ("NLRA") by unilaterally refusing to honor the union security clause and discontinuing union dues deductions from employees' pay checks.  The NLRB determined that the language of Section 8(a)(3) of the NLRA, which permits employers and unions to make an "agreement" to require union membership as a condition of employment, means that parties cannot enforce a union security provision after the collective bargaining agreement containing such a provision has expired.  The NLRB further reasoned that dues checkoff provisions are intended to implement union security clauses, and that an employer's obligation to continue deducting union dues from employees' pay checks ceases upon the expiration of the collective bargaining agreement.

According to the three NLRB members who comprised the majority in the WKYC-TV decision, the reasoning contained in the Bethlehem Steel decision is flawed.  The three-member majority disagreed with the premise that dues checkoff provisions are intended to implement union security clauses, and stated that "union-security and dues-checkoff arrangements can, and often do, exist independently of one another."  The three-member majority also found that employees cannot be required to authorize union dues deductions as a condition of employment even if the collective bargaining agreement contains a union security clause that requires them to be a member of the union.  Although employees generally choose to sign authorizations allowing the dues deductions as a matter of convenience, employees retain the option of transmitting their union dues directly to the union instead of consenting to automatic deductions.  The three-member majority observed that employees who sign dues checkoff authorizations are free to revoke those authorizations upon the expiration of the collective bargaining agreement if they no longer wish to continue those automatic deductions.

For these reasons, the three-member majority reversed the Bethlehem Steel decision and held that employers are required to honor dues checkoff provisions in an expired collective bargaining agreement until the parties have reached a new agreement or until a valid impasse has been reached that permits unilateral action by the employer.  This new rule will only be applied prospectively, and will not be applied to any pending cases.

Not surprisingly, Member Hayes wrote a strong dissenting opinion.  Member Hayes found no adequate justification for the NLRB to abandon more than 50 years of precedent.  Member Hayes stated that a union security clause operates as a powerful inducement for employees to authorize union dues deductions, and "it is unreasonable to think that employees generally would wish to continue having dues deducted from their pay once their employment no longer depends on it."  Member Hayes also responded to the majority's view that employees can simply revoke their authorizations, stating that "it is unlikely that employees will recall the revocation language in their authorizations, and less likely still that they will understand that their obligation to pay dues as a condition of employment terminated as a matter of law once the contract expired."  Member Hayes also recognized that an employer's ability to cease collecting union dues from employees upon the expiration of a collective bargaining agreement is "a legitimate economic weapon in bargaining for a successor agreement" and accused the three-member majority of deliberately stripping employers of this weapon to provide more leverage to unions in negotiating for successor agreements.

It is not clear at this point whether the NLRB's WKYC-TV decision will be appealed.

Earlier this year, many employers were left scratching their heads after a National Labor Relations Board Administrative Law Judge ruled, in American Red Cross Arizona Blood Services Region, that an employer’s handbook acknowledgment, requiring employees to affirm the at-will nature of their employment, violated the National Labor Relations Act.  The language that was found to be unlawful in Red Cross stated:

I further agree that the at-will employment relationship cannot be amended, modified or altered in any way.

The ALJ reasoned that this language required employees to waive their Section 7 rights to engage in protected concerted activity, because by agreeing that their at-will status could never change, they were essentially foregoing their right to make efforts or engage in conduct that could result in union representation and in a collective bargaining agreement.  This waiver, according to the ALJ, would have a chilling effect on employees’ rights, and was therefore unlawful.

The confusion and concern among employers continued, as the Board continued to file and process complaints against employers for employment-at-will policies that appeared to contain the most routine at-will language.  For example, in late February, another Board complaint challenged the following language:

I acknowledge that no oral or written statements or representations regarding my employment can alter my at-will employment status, except for a written statement signed by me and either [the Company’s] Executive Vice-President/Chief Operating Officer or [the Company’s] President.

The complaint challenging this language was settled before the Board issued a decision, providing employers no guidance as to whether it was time to revise their handbooks.  Thankfully, the Board has now provided some further guidance, and it appears they have tempered their position.  This “treat,” issued on Halloween, came in the form of two Advice Memoranda (Case 32-CA-086799 and Case 28-CA-084365) issued by the Board’s Division of Advice taking the position that language similar to that above is lawful.  For example, the following language was found acceptable:

No manager, supervisor, or employee of [the Company] has any authority to enter into an agreement for employment for any specified period of time or to make an agreement for employment other than at-will.  Only the president of the Company has the authority to make any such agreement and then only in writing.

The memorandum explains that this language is lawful because it is not as absolute as the language in the Red Cross case.  It explicitly permits the president to enter into written employment agreements, thus providing for the possibility of potential modification of the at-will relationship through a collective bargaining agreement.  Additionally, the language is not written in a way that requires employees to waive their rights.

For now, employers should consider reviewing the at-will language in their employee handbooks.  Language that simply describes the at-will status of employees, and states that it can only be altered in writing by an executive should not cause concern for now.  However, if the at-will language is written in more absolute terms, providing that the at-will relationship can never be changed under any circumstances, it may be time to revise that policy.  However, as warned by the Board’s General Counsel at the close of both Advice Memoranda, “the law in this area remains unsettled.”  We will continue to provide updates on this blog as this issue develops.

On October 23, 2012, the National Labor Relations Board held, in a 2-1 decision, that an employer has an obligation under the National Labor Relations Act to respond in a timely manner to a union information request, even if the requested information is ultimately found to be irrelevant to the union's performance of its duties as the employees' collective bargaining representative.

In IronTiger Logistics, Inc., the employer was a unionized trucking company that shared common ownership with another non-union trucking company called TruckMovers.com, Inc.  The union representing IronTiger's employees made a written request to IronTiger that principally sought information regarding the non-union truck drivers employed by TruckMovers.  The information request also sought some information relating to bargaining unit employees, such as the names of the truck drivers for each unit, their destination and mileage, and communications from customers about those units.

IronTiger did not respond to the union's information request until approximately four and a half months later -- after the union had filed an unfair labor practice charge over IronTiger's failure to provide a response to the information request.  In its response, IronTiger did not provide any of the requested information, but instead stated its belief that all of the requested information was irrelevant.

The Administrative Law Judge who presided over the unfair labor practice hearing agreed with IronTiger that the information requested by the union was irrelevant to the union's performance of its duties as the employees' collective bargaining representative.  In addition, there was no dispute regarding the adequacy of IronTiger's response explaining why the requested information was irrelevant.  However, the ALJ nevertheless held that IronTiger's failure to respond in some manner to the irrelevant information request for approximately four and a half months constituted a refusal to bargain in good faith in violation of Section 8(a)(5) of the Act.

The two-member majority of the Board agreed with the ALJ's analysis, and held that employers have an obligation under the Act to respond within a reasonable time to union information requests, regardless of whether those requests are deemed to be irrelevant.  Member Hayes wrote a dissenting opinion, in which he reasoned:  "Ultimately, requested information is either legally relevant to a union's representative duties, or it is not.  If it is not relevant, then the statutory duty to bargain in good faith is not implicated by the request or the employer's failure to respond timely to the request."

Based on the Board's IronTiger decision, employers should make sure to respond within a reasonable time in some manner to all information requests made by a union representing their employees, even if the response is just a brief explanation of the employer's position that the requested information is irrelevant.  If an employer believes that a union information request is overly broad or unduly burdensome, the employer should make a good faith effort to work with the union to narrow the scope of the request.

On September 28, 2012, the National Labor Relations Board handed down its first decision regarding whether an employee’s termination in connection with his postings on Facebook was unlawful.  In its decision, however, the Board dodged the more thorny aspect of the case, which was whether other Facebook postings of the employee that were openly critical of the employer were protected under the Act.

The Board concluded that the employee, a salesman at a BMW dealership, was terminated for posting pictures on Facebook of an unfortunate incident at an adjoining Land Rover dealership, which was also owned by the same employer.  The incident depicted in the employee’s photos was of a Land Rover that had been driven into a pond by a customer’s teenage son and included the caption:  “This is your car.  This is your car on drugs.”  He also wrote on his Facebook page:

This is what happens when a sales Person sitting in the front passenger seat (Former Sales Person, actually) allows a 13 year old boy to get behind the wheel of a 6000 lb. truck built and designed to pretty much drive over anything.  The kid drives over his father’s foot and into the pond in all about 4 seconds and destroys a $50,000 truck.  OOOPS!

The Board, affirming the ALJ, concluded that there was nothing protected or concerted about these posts by the employee because they did not concern any terms or conditions of employment and they were posted solely by the employee, apparently as a “lark.”

The Board did not consider whether more controversial postings by the employee on his Facebook page were protected, concerted activity under the Act.  Those postings were critical of the employer’s “Ultimate Driving Event” at the BMW dealership.  Specifically, the employee criticized the low budget food and drink offerings provided to customers -- the 8 oz. bag of chips, the $2.00 cookie plate from Sam’s Club and the hot dog cart where a customer “could attain a over cooked wiener and a stale bunn [sic],” among other criticisms.  Because the Board agreed with the ALJ that the employee had been fired exclusively for the Land Rover postings, which were clearly unprotected, the Board found it unnecessary to determine whether the employee’s other postings were protected.

However, two members of the Board (with Member Hayes dissenting) concluded that the following policy of the employer was unlawful:

Courtesy:  Courtesy is the responsibility of every employee.  Everyone is expected to be courteous, polite and friendly to our customers, vendors and suppliers, as well as to their fellow employees.  No one should be disrespectful or use profanity or any other language which injures the image or reputation of the Dealership.

Specifically, the Board found the broad prohibitions of the rule on “disrespectful” conduct and use of “language which injures the image or reputation of the Dealership” implicated protected Section 7 activities, including complaining about working conditions and seeking the support of others in improving them.  The Board noted that there was nothing else in the rule -- or the employee handbook generally -- to suggest that conduct protected by Section 7 of the Act is excluded from the Courtesy rule.  The two-member majority rejected the argument advanced by dissenting member Hayes that the words contained in the rule must not be read “in isolation,” and that the first two sentences inform employees that the rule is intended simply to promote civility in the workplace.

Just two weeks after the National Labor Relations Board’s first decision regarding the lawfulness of an employer’s social media policy, another employer received an adverse decision on its social media policy, this time by a Board administrative law judge.  On September 20, 2012, ALJ Clifford Anderson ruled that EchoStar Technologies’ social media policy chilled employees’ Section 7 rights and thus violated Section 8(a)(1) of the National Labor Relations Act.

The challenged portions of the policy (i) prohibited employees from “mak[ing] disparaging or defamatory comments about EchoStar, its employees, officers, directors, vendors, customers, partners, affiliates, or our or their products/services”; and (ii) further prohibited employees’ participation in personal social media activities “with EchoStar resources and/or on Company time” without company authorization.

Applying the test set forth in Lutheran Heritage Village-Livonia, the judge preliminarily found that the EchoStar policy did not explicitly restrict Section 7 activity and noted the absence of a claim that the policy was promulgated in response to union activity or that it had been applied to restrict the exercise of Section 7 rights.  He found, however, that the term “disparaging” was impermissibly overbroad and would be read by a reasonable employee to intrude on and chill the employee’s right to engage in activities protected by Section 7 of the Act.

ALJ Anderson further rejected EchoStar’s argument that a “savings clause” salvaged the rule.  The clause advised employees to contact Human Resources if they had questions regarding the handbook and further stated that if a conflict arose between an EchoStar policy and the law, the appropriate law would govern and the policy would be conformed in accordance with that law.  Noting that the clause appeared in the introductory sections of the handbook, several pages before the social media policy, the ALJ found that a general admonition to contact Human Resources does not create a “legal loop” that an employee must jump through before the rule may be challenged.  He further found that a boilerplate clause that a document’s provisions be applied and interpreted in a legally permissible manner does not save an otherwise invalid rule under the Act.  Without any analysis, the ALJ also found that the rule prohibiting employees from using personal social media with company resources and/or on company time also violated the Act.

Additionally, ALJ Anderson invalidated several other handbook policies (or portions thereof), including policies regarding “contact with the media” and “contact with government agencies," the “investigations” policy insofar as it required that employees “maintain confidentiality” during internal company investigations, and the portion of the “disciplinary actions” policy defining “insubordination” to include “undermining the Company, management or employees.”  In each instance, the ALJ found the challenged language to be overbroad and likely to induce a reasonable employee to conclude that it encompassed, and thereby prohibited, protected Section 7 activity.

Similar to the Board in Costco, ALJ Anderson appears to have closely tracked the reasoning of Acting General Counsel Lafe Solomon, as set forth in Mr. Solomon's three Operations Memos issued during the past 14 months.  That said, the Board’s analysis of social media policies remains in its infancy and little specific guidance on permissible policy language is currently available.  Until further decisions and guidance are issued, employers should continue to consult with counsel in crafting their social media policies, with an eye toward (i) avoiding broad, vague prohibitions; (ii) including specific examples of prohibited conduct; and (iii) inserting appropriate disclaimers within the policy itself.

On September 7, the National Labor Relations Board (“Board”) issued its first decision on the lawfulness of an employer’s social media policy under the National Labor Relations Act (“NLRA”).  We have previously reported on three non-binding reports issued by the Board’s Acting General Counsel (“GC”) since August 2011, outlining his views of impermissibly restrictive social media rules.  In Costco Wholesale Corp., the Board has indicated that it may take an approach similar to the GC in scrutinizing employer efforts to control employees’ online speech.

The Costco policy prohibited employees from electronically posting communications that “damage the Company, defame any individual or damage any person’s reputation, or violate the policies outlined in the Costco Employee Agreement.”  Reversing the administrative law judge’s ruling, a three-member Board panel held that this rule was overly broad in violation of Section 8(a)(1) of the NLRA.  In reaching this conclusion, the Board found that the wording of the policy “clearly encompasse[d] concerted communications” protesting Costco’s treatment of its employees.  The Board further found that in the absence of any accompanying language that “even arguably suggests that protected communications are excluded from the broad parameters of the rule,” employees would reasonably assume the policy prohibited them from engaging in communications critical of Costco or its agents.  Costco was ordered to rescind the policy insofar as it prohibited employees from making on-line statements damaging to the company’s or any person’s reputation.

Costco’s policy also provided that “sensitive information such as . . . payroll . . . information may not be shared, transmitted or stored for personal or public use without prior management approval.”  The provision was deemed unlawful, because the Board determined that employees would reasonably conclude that it prohibited them from discussing their wages and other terms and conditions of employment.  Costco’s argument that the rule should be read to prohibit only the sharing of the “confidential business component of payroll, such as budgeted payroll and expenses and the like” was rejected.  Although the rule also prohibited disclosure of items unrelated to terms and conditions of employment, such as social security and credit card numbers, when read in the context of the entire document, the Board believed that term “payroll information” would reasonably be construed by employees to prohibit protected activity under Section 7 of the NLRA, such as discussing their compensation.

However, that portion of the Costco policy that required employees to use “appropriate business decorum” in communications with others was found to be lawful.  The administrative law judge (affirmed by the Board) agreed that an employer may lawfully establish rules providing for a civil workplace.  The GC’s contention, that the rule could be interpreted by employees as restricting Section 7 activities, was rejected.  Rather, the Board held that the applicable legal standard is whether the rule in question would be construed by employees to restrict Section 7 activity.

Additional cases involving social media issues are likely to be decided by the Board over the next several months.  Until further decisions and guidance are issued, employers should consult with legal counsel in crafting their policies.  Employers would also be well-advised to avoid broad, vague restrictions (e.g., “non-disparagement”) and restrictions that plainly impinge on protected speech (e.g, “no discussion of wages”).  Employers should also include specific examples of prohibited conduct and a “savings clause” or other disclaimer language making clear that the policy is not intended to restrict Section 7 rights.

As previously reported in this blog, on July 30, 2012, in the Banner Health System case, the National Labor Relations Board (“Board”), issued a 2-to-1 decision holding that a hospital violated Section 8(a)(1) of the National Labor Relations Act (“NLRA”) by asking employees who make a complaint not to discuss the matter with co-workers while the investigation is pending.

Shortly after the Board issued that decision, the Buffalo, NY regional office of the United States Equal Employment Opportunity Commission (“EEOC”) took a similar position that a confidentiality instruction to an employee making a complaint of discrimination would, in that office’s view, constitute unlawful interference with the complaining employee’s efforts to oppose discrimination.

According to the EEOC's Buffalo office:

EEOC guidance states that complaining to anyone, including high management, union officials, other employees, newspapers, etc. about discrimination is protected opposition.  It also states that the most flagrant infringement of the rights that are conferred on an individual by Title VII’s retaliation provisions is the denial of the right to oppose discrimination.  So, discussing one’s complaints of sexual harassment with others is protected opposition.  An employer who tries to stop an employee from talking with others about alleged discrimination is violating Title VII rights, and the violation is “flagrant” not trivial.

Although this position taken by the Buffalo office has not officially been adopted by the EEOC as a whole, the fact that two federal authorities are attacking the validity of confidentiality instructions is cause for concern.  At a minimum, employers should take a step back and review their investigatory process to ensure that no undue restraint is being placed on employees.  We offer the following practical pointers employers should keep in mind in conducting this review:

• Preserving the integrity of an investigation by keeping harassment/discrimination complaints confidential is a laudable objective.  However, official EEOC guidance requires that employers maintain the confidentiality harassment/discrimination complaints to the extent possible.  Employers are not required or expected to, nor can they, guarantee that harassment/discrimination complaints will be kept strictly confidential.  The Board’s Banner Health System decision also states that a generalized desire to protect the integrity of an investigation will not justify a general policy that matters be kept confidential.
• It does not matter whether employees are unrepresented or unionized in determining whether their rights under the NLRA have been violated.  Regardless of whether covered employees are represented by a union, they are protected by the NLRA.  However, supervisors are not considered covered employees under the NLRA and therefore supervisors are not entitled to its protections.  Consequently, notwithstanding the Board’s Banner Health System decision, an employer could request a supervisor, as opposed to a non-supervisory employee, not to discuss matters with co-workers without fear of violating Section 8(a)(1).
• Consider only “asking” an employee to keep things confidential or “suggesting” the employee be “discreet” about the “sensitive issue,” rather than “instructing,” “ordering,” or “directing” an employee to maintain confidentiality.  Explain to the employee the benefits of confidentiality and how the employer does not want any information leaked that could potentially hinder its ability to complete a thorough investigation or to gather accurate, untainted evidence.  Confidentiality could also be suggested to the employee without an express directive by mentioning the “sensitive” nature of the matter and how he/she would not want allegations made against him/her to be publicly discussed.  By ultimately leaving some choice with the employee, the employer should still be able to argue it did not violate the employee’s rights under the NLRA or interfere with the employee’s Title VII rights to oppose discrimination.
• Employers should analyze each case on an individual basis before asking an employee not to discuss the matter with co-workers, specifically taking into account the factors enumerated by the Board in Banner Health System:  (1) Are there witnesses in need of protection? (2) Is evidence in danger of being destroyed? (3) Is testimony in danger of being fabricated? and (4) Is there a risk of a cover-up?  Although Banner Health System involved a “request,” not a directive, that the employee maintain confidentiality, the Board did not take issue with the request itself but rather with the employer’s blanket practice of requesting confidentiality of all employees without making an individualized assessment as to whether a request was appropriate in any given case.  The Board ultimately viewed this blanket practice as effectively prohibiting any discussion of investigations amongst employees and therefore violative of Section 8(a)(1).  Blanket requests or instructions to maintain confidentiality in all, or virtually all, investigations will likely not be upheld.
• Employers should also consider other intangible factors, such as whether the individual is likely not to discuss the matter on his/her own accord even without any request from the employer to keep it confidential.  If the employee would likely maintain confidentiality without any direction from the employer, why risk potential liability by issuing a request?
• If a decision is ultimately made to issue a confidentiality instruction or directive, notwithstanding the potential risk of liability in doing so, all of the reasons underlying this decision should be clearly and promptly documented, in writing, in case the decision is ever challenged in the future.
• Once the investigation is complete, consider affirmatively lifting any confidentiality instruction that was issued. Doing so could potentially limit the time period for which an employer could be held liable for the confidentiality instruction if it is ultimately held unlawful.