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Labor & Collective Bargaining

NLRB Cannot Show Unlawful Discharges Where Decision-Maker Was Unaware Of Employees’ Pro-Union Activity

Rejecting a National Labor Relations Board decision that two employees were unlawfully discharged for engaging in union activities because there was no evidence that the person who made the decision to discharge the workers knew that they had engaged in any union activity, a federal appeals court in Richmond has refused to enforce a Board order directing that the employees be reinstated to their jobs with back pay.

In Gestamp S.C., LLC v NLRB, Case No. 11-2362 (4th Cir., October 8, 2014), two union supporters were discharged after it was determined that they had falsified an application and time card.  The decision to discharge the employees was made by the Director of Human Resources.  There was no evidence she had any knowledge that the employees had been active union supporters.  It was undisputed, however, that two front-line supervisors did know that the discharged employees were actively supporting the union, and because of this, the Board’s administrative law judge found the discharges were unlawfully motivated.  The Board upheld that finding.

On appeal, the Board argued that it was not required to prove knowledge on the part of the decision-maker to show the terminations violated the National Labor Relations Act.  Instead, it said, the knowledge of the two supervisors that the employees had engaged in union activity should be imputed to the employer and another of its agents, the Human Resources Director.  The Court rejected this argument. It held that without evidence that the person who made the discharge decision had knowledge of the employees’ union activity, the finding that their discharge was unlawfully motivated could not be upheld.

Vicarious liability has vexed more than one employer.  The court’s decision, however, offers some assurance to employers, at least those in the states embraced by the Fourth Circuit (Md., Va., W.Va., N.C., and S.C.), that adverse personnel actions taken by a human resources or other management official for legitimate, non-discriminatory reasons will not be questioned later because of a first-line supervisor’s knowledge of an employee’s protected activity, of which the decision-maker was entirely unaware.

Employer’s Warning Violates NLRA, Board Rules

An employer’s verbal warning for “continued frivolous requests for information…and interfering with the operation of the business,” directed to a shop steward who made two  requests to the employer for information including payroll information, violated the National Labor Relations Act, according to the National Labor Relations Board. Dover Energy, Inc.,Blackmer Division, 361 NLRB No. 48 (Sept. 17, 2014).  The Board did not find it significant that the steward was not a union negotiator, his requests were not authorized by the union, and there was no indication he acted on anyone else’s behalf.

The shop steward’s role was to investigate grievances, but he had no role in ongoing collective bargaining negotiations and was not authorized by the union to take action regarding the negotiations. Despite this, the steward twice made voluminous information requests of the employer allegedly related only to the negotiations (financial and payroll information).  The company did not provide the information.  After the second request, the company gave the steward a verbal warning.  The company explained it was not bargaining with him individually, and warned, “Similar requests such as this will result in further discipline up to and including discharge.”

A Board panel majority, reversing its Administrative Law Judge, found a violation in the warning.  Although it did not find the steward’s information requests were “protected, concerted activity” — they were not authorized by the union in connection with the negotiations and the steward was not acting together with or on behalf of any other employee — the warning, the Board said, “would reasonably be understood [by the employee] to proscribe future protected activity.”  In other words, according to the NLRB, because of the warning, the steward might be unlawfully inhibited from making similar information requests in the future in properly investigating grievances.

One Board Member dissented.  He wrote that a reasonable employee would recognize that only “frivolous” future information requests (“such as this”) would be subject to discipline, not those made legitimately in the performance of his duties as shop steward.

This is another example of the NLRB extending the reach of the concept of protected activity.  Most of the examples of this occur in the context of the Board’s decisions about the lawfulness of handbook rules, but this case demonstrates that warnings (and, presumably, other employer documents, e.g., performance evaluations) are fair game for the Board’s protected activity scrutiny.

416 Reasons Why There is No Rest for the NLRB

When the U.S. Supreme Court decided in June that President Barack Obama’s three recess appointments to the National Labor Relations Board in January 2012 were invalid, NLRB Chairman Mark Gaston Pearce stated, “[The Board is] committed to resolving any cases affected by today’s decision as expeditiously as possible.”

Now, the Board has issued a 21-page list of 416 “contested cases in which one or more of [the] challenged appointees [under the Supreme Court’s NLRB v. Noel Canning decision] participated in the issuance of a decision.”  See Supreme Court Issues Historic Decision on President’s Recess Appointment Power.

While the NLRB does not now indicate any plans for review of the cases, given Chairman Pearce’s statement, the Board may reconsider all of the decisions on the list and  reconfirm them. The composition of the current Board is not unlike that of the Board that decided the cases earlier.

The cases deal with important issues:

  • unlawful confidentiality policy
  • “inability to pay” argument made at bargaining table
  • Facebook/protected concerted activity
  • duty to bargain over discretionary discipline post-certification of representative but pre-contract
  • confidentiality of witness statements/work product doctrine
  • unlawful grievance-arbitration policy restricting employees’ rights to access NLRB processes
  • dues deduction after expiration of collective bargaining agreement
  • unlawful “courtesy” rule in handbook
  • miscellaneous work rules, including unlawful rule prohibiting employees from electronically posting statements that “damage the Company . . . or damage any person’s reputation.”
  • confidentiality of investigations policy

If you have any questions about the list or other workplace issues, please contact a Jackson Lewis attorney.

Republican Senators Propose to Make Significant Changes to NLRA

If two Republican United States Senators have their way, membership on the National Labor Relations Board will be increased from five to six, and other  significant changes will be made to the National Labor Relations Act.

The “National Labor Relations Board Reform Act,” introduced on September 16 by Senators Lamar Alexander (R-TN) and Mitch McConnell (R-KY), would alter the way the nation’s principal labor relations law works.

According to Senator Alexander’s press announcement, the bill will “end partisan advocacy,” “rein in the General Counsel,” and “encourage timely decision-making.”

The bill would make the following changes to the Act, among others:

  • Increase Board membership from five to six.
  • Three members would have to be from each major political party.
  • Instead of Board members being appointed by the President and confirmed by the Senate, they would be “appointed by the President, after consultation with the leader of the Senate representing the party opposing the party of the President,” and then confirmed by the Senate.
  • Four Board members would be needed for a quorum.
  • Unfair labor practice complaints issued by the NLRB General Counsel would be subject to review in Federal District Court upon a written petition for review.
  • Further proceedings by the NLRB on the complaint would be prohibited if it is shown that the General Counsel “does not have substantial evidence that [there has been a violation of the] Act.”
  • Unions and employers against whom unfair labor practice complaints are issued will be able to obtain advice, internal, inter- and intra-agency memorandum and other documents relevant to the complaint within 10 days after requesting them.
  • The NLRB would be required to act finally on appeals of decisions by agency Administrative Law Judges and Regional Directors within one year.
  • Funding for the NLRB would be reduced by 20 percent if the Board is not able to decide 90 percent of its cases within one year during the first two-year period after the law is enacted.

The bill is unlikely to pass given the current composition of the Senate.  However, changes in that body could result in the bill receiving a full review in the future.

Ray Rice Saga: Not Just About The Punishment Fitting the Crime

Ray Rice is covered by a collective bargaining agreement between the National Football League and the NFL Players Association.  Despite the seriousness of the incident involving the former Baltimore Ravens running back and his wife, it may have been against the “rules” for NFL Commissioner Roger Goodell to have increased Rice’s suspension from two games to indefinite because of the concept of “double jeopardy.” That, among other theories, almost certainly will be raised by the NFL Players Association (NFLPA) at the hearing that will take place in connection with its appeal of the indefinite suspension, filed yesterday.  For more on this visit our Collegiate & Professional Sports Law Blog.

Firings for Facebook Comments Unlawful, NLRB Rules

An employer violated the National Labor Relations Act by discharging two employees because of their participation in a Facebook discussion about their employer’s State income tax withholding mistakes, by threatening employees with discharge for their Facebook activity, by questioning employees about that activity, and by informing employees they were being discharged because of their Facebook activity, the NLRB has ruled. The Board also ruled the employer’s Internet/Blogging policy violated the NLRA. Triple Play Sports Bar and Grille, 361 NLRB No. 31 (2014).  For more on this decision, click here.

Labor Board Rejects Micro-Unit at Retailer

In a long-awaited decision, the National Labor Relations Board has held that a petitioned-for “micro” bargaining unit consisting of women’s shoe sales associates working in two areas within a store, which followed no administrative or operational lines set by the store, was inappropriate under Specialty Healthcare, 357 NLRB No. 83 (2011), where the Board seemingly had green-lighted such “micro-units” as appropriate for collective bargaining.  The Neiman Marcus Group, Inc. d/b/a Bergdorf Goodman, 361 NLRB No. 11 (2014).

Manhattan luxury retailer Bergdorf Goodman operates a Women’s store on Fifth Avenue.  The petitioned-for unit consisted of women’s shoes sales associates who were located in separate departments within the store — a department called “Salon shoes,” located on the second floor and is its own department, and “Contemporary shoes,” located on the fifth floor and is part of a larger department.  Although employees in the two departments shared the same terms and conditions of employment, they were supervised by different floor and department managers, transfers between the departments were few, and sales associates did not substitute for one another or otherwise interchange.

In Specialty Healthcare, the NLRB instructed that in cases in which a party contends that the smallest appropriate bargaining unit must include additional employees (or job classifications) beyond those in the petitioned-for unit, the Board first reviews whether the unit is an appropriate bargaining unit: the “employees in the petitioned-for unit must be readily identifiable as a group and the Board must find that they share a community of interest using the traditional criteria[.]”  If the petitioned-for unit satisfies this standard, the burden is on the proponent (here, BG) of a larger unit to demonstrate that the additional employees it seeks to include share an “overwhelming community of interest” with the petitioned-for employees.

The employer argued that the petitioned-for unit was not appropriate and that the petitioned-for employees shared an overwhelming community of interest with other selling employees so that an appropriate unit had to include, at a minimum, all selling employees, including not only all sales associates, but also personal shoppers and sales assistants.  Alternatively, the employer asserted that a storewide unit was appropriate.

Based on Specialty Healthcare the Board dismissed the petition.  It explained that, in making its determination, it must weigh “various community-of-interest factors, including whether the employees are organized into a separate department; have distinct skills and training; have distinct job functions and perform distinct work; are functionally integrated with the Employer’s other employees; have frequent contacts with other employees; interchange with other employees; have distinct terms and conditions of employment; and are separately supervised.”  Although the Board found the petitioned-for employees were “readily identifiable as a group by virtue of their function[,]” the sales associates in Salon shoes and Contemporary shoes did not meet Specialty Healthcare’s first prong: they lacked a community of interest.  The petitioned-for employees had a common purpose, i.e. selling women’s shoes, and shared the same pay structure, hiring criteria, appraisal process and were subject to the same employee handbook.  However, the Board found that “the balance of the community-of-interest factors weigh[ed] against finding that the petitioned-for unit was appropriate” because “the petitioned-for unit d[id] not resemble any administrative or operational lines drawn by the Employer.”  Instead, the petitioned-for unit consisted of the entire Salon shoe department and only a select portion of employees out of a second department.  Thus, unlike the petitioned-for unit in Macy’s, Inc., 361 NLRB No. 4 (2014), which “conformed to the departmental lines established by the employer[,]” this unit was inconsistent with how the employer chose to structure its workplace.

Bergdorf shows that the Board will give some deference to how an employer structures its operations in evaluating whether employees share a community of interest.  However, this is not always the case.  The Board cautioned that a petitioned-for unit that departs from an employer’s departmental lines may be appropriate where the other community-of-interest factors weigh in favor of appropriateness of the petitioned-for unit, such as when there exists common supervision despite the employees working in different departments, or when there is a significant interchange of employees between departments.

Employee’s Facebook ‘Like’ is Part of Concerted Activity: NLRB

An employee’s selection of the “Like” option under a former employee’s initial Facebook status update was “an expression of approval” of the initial status update it followed (and therefore part of concerted activity), but not of the entire topic of which the update was part as it existed at the time.  Therefore, the NLRB determined, the employee could not be held responsible or fired for any of the other comments posted in the exchange, including allegedly disparaging or defamatory comments. Triple Play Sports Bar & Grille, 361 NLRB No. 31 (2014).

The decision addresses several  important issues related to social media activity and protected concerted activity (or its absence) under the NLRA.

The employer employed Jillian Sanzone and Vincent Spinella. Sanzone and at least one other employee discovered they owed more in state income taxes on their earnings than they had expected. Sanzone discussed this at work with other employees, and some employees complained to the employer.

Under Section 7 of the National Labor Relations Act, employees have a statutory right to act together “to im­prove terms and conditions of employment or otherwise improve their lot as employees,” including by using social media to communicate with each other and with the public for that purpose.

Sanzone, Spinella, and a former employee, Jamie LaFrance, had Facebook accounts. LaFrance posted the following “status update” to her Facebook page:

Maybe someone should do the owners of Triple Play a favor and buy it from them. They can’t even do the tax paperwork correctly!!! Now I OWE money… [Expletive deleted]!!!!

LaFrance later posted:

It’s all Ralph’s [the Employer’s co-owner who was responsible for the Employer’s accounting] fault. He didn’t do the paperwork right. I’m calling the labor board to look into it bc he still owes me about 2000 in paychecks.

At this point, Spinella selected the “Like” option under LaFrance’s initial status update. The discussion continued with several comments, including this one by LaFrance about “Ralph”:

Hahahaha he’s such a shady little man. He prolly [sic] pocketed it all from all our paychecks. I’ve never owed a penny in my life till I worked for him. Thank goodness I got outta there.

Sanzone then wrote: I owe too. Such an [expletive deleted].

In analyzing whether Spinella could be held responsible for the comments of others in the Facebook string based on his use of the “Like” option, the NLRB interpreted Spinella’s use of that option “as an expression of approval” and, it appears, “participation in the discussion that was sufficiently meaningful as to rise to the level of concerted activity.”  However, the Board rejected the employer’s argument that, as a result of his use of the “Like” option, Spinella could be held responsible for LaFrance’s “shady little man” and “pocketed it all” comments in the string about “Ralph,” as well as Sanzone’s use of profanity to describe him. The Board held that Spinella’s “Like” pertained only to the specific comment it followed (“It’s all Ralph’s fault”) and not to the entire discussion.  The Board wrote:

We interpret Spinella’s “Like” solely as “an expression of approval” of the initial status update. Had Spinella wished to express approval of any of the additional comments emanating from the initial status update, he could have “liked” them individually.

The Board, therefore, found that, even if the “shady little man” and “pocketed it all” comments about “Ralph,” as well as Sanzone’s use of profanity to describe him were unprotected, Spinella’s use of the “Like” option during the discussion did not attribute those particular comments to him and he could not be terminated because of them.

This is the first NLRB decision deciding what the meaning and implications are under Section 7 of an employee’s use of the “Like” option.

We will write separately about the other important issues the decision addresses.

NLRB Precedent Not Binding after Noel Canning, Labor Board Judge Declares, Rejecting Claimed Dues Deduction Violation

In an unusual move, an NLRB administrative law judge has disregarded Board law and held that an employer that stopped dues deductions after the expiration of its collective bargaining agreement did not commit an unfair labor practice, dismissing an unfair labor practice complaint.  Lincoln Lutheran of Racine, 30-CA-11099 (JD-49-14 August 11, 2014) Relying on the United States Supreme Court’s decision in NLRB v. Noel Canning, which held the Board lacked the quorum necessary for the issuance of decisions from January 4, 2012 through August 4, 2013, the judge concluded he could not follow the Board’s precedent-setting dues check-off decision in WKYC-TV, 359 NLRB No. 30 (issued in December 2012), and instead should rely on Board  law as it existed previously.

While NLRB administrative law judges normally must adhere to existing Board law, the Judge in Lincoln Lutheran of Racine  refused to apply WKYC-TV.  In that case, the Board found that “an employer’s obligation to check-off union dues continues after expiration of a collective bargaining agreement that establishes such an arrangement.”    However, since WKYC-TV was issued during the quorum-less period, when the NLRB was without authority to render decisions under Noel Canning, the Judge decided the decision was not “valid precedent.”   Instead, the Judge applied Bethlehem Steel, the decision that WKYC-TV overruled.  Bethlehem Steel held that an employer does not violate the NLRA by ceasing to follow the dues check-off provision after expiration of the collective bargaining agreement.  Bethlehem Steel, 136 NLRB 1500 (1962).  Accordingly, the Judge dismissed the complaint.

It remains to be seen whether other ALJs will follow suit when faced with the question of whether or not to follow Board decisions invalidated by Noel Canning.

It’s Basic: Party Desiring Termination or Modification of CBA Must Notify FMCS and All Applicable State Agencies

The National Labor Relations Act requires an employer that wants to terminate or modify an existing union contract to provide at least 30 days’ notice to the Federal Mediation and Conciliation Service (FMCS) and all the relevant state mediation agencies before terminating or modifying the contract.  The possible consequences of failing to fully comply with the notice requirement has been underscored by a recent Labor Board decision. American Water Works Service Company, Inc., 361 NLRB No. 3 (2014).

In this case, the employer participated in  a National Benefits Agreement with several unions covering employees in four states.  More than one year before the contract termination date of July 31, 2010, the employer called a union representative to meet “to get the ball rolling” on early negotiations.  The first meeting occurred on June 17, 2009, followed by a meeting in December and a series of subsequent meetings in the spring and summer of 2010.  The parties failed to reach an agreement and the employer implemented its final offer effective January 1, 2011.

It is the responsibility of the “initiating party” to give the required notices to the FMCS and state agencies.  If the employer is the initiating party, it cannot lawfully implement the terms of its offer unless it has given these notices.

Here, contrary to the employer’s argument, the Labor Board found the employer was the initiating party because it “took the lead” in contacting the union.  As the initiating party, the employer satisfied its obligation to notify the FMCS — the Board found the employer’s oral notice was sufficient.  However, the NLRB decided the employer failed to notify the mediation and conciliation agencies in the states in which the employees covered by the negotiations worked.  Therefore, it ruled the employer violated the NLRA when it implemented its final offer without also having given the required notice to all four state agencies.

The Board also noted Section 8(d)(1) of the NLRA requires the initiating party to serve upon the other parties a written notice of proposed contract modification 60 days prior to the expiration of the agreement.  The NLRB decided that while the employer had not complied with that provision, that finding did not affect the outcome of the case.

For failing to comply with the notice requirement, the employer was ordered to restore the status quo and to make all of the employees whole for a period of three-and-one-half years, to the date the employer implemented its final offer.

The lessons:

  1.  Employers that go on record first as seeking a change in the collective bargaining agreement, even informally, should assume they have the responsibility of providing 8(d) mediation notices.
  2.  Employers that have that responsibility should notify all state agencies in states which the collective bargaining agreement, as well as FMCS.
  3. Notify all of the mediation agencies in writing.  Although an oral notification will suffice, it is better practice to notify in writing so you can easily prove that you gave the required notification.  Inability to prove you gave notification could result in liability for substantial back pay.