NLRB General Counsel Jennifer Abruzzo is pressing for stricter enforcement against the use of workplace technologies to monitor employees.  As a result, employers should consider the National Labor Relations Act (the “Act”) when conducting forensic reviews of employee emails and texts during internal investigations. 

On October 31, 2022, Abruzzo issued Memorandum GC 23-02 titled “Electronic Monitoring and Algorithmic Management of Employees Interfering with the Exercise of Section 7 Rights.”  This memo urges the NLRB to find that employers presumptively violate the Act if their electronic monitoring and automated management practices interfere with or prevent covered employees from engaging in protected concerted activity. 

Abruzzo suggests a new legal framework for determining the lawfulness of electronically monitoring employees.  Her memo proposes that if the employer establishes that their surveillance practices are “narrowly tailored” to address a legitimate business need (i.e., that its need cannot be met through means less damaging to employee rights), the Board should balance the respective interests of the employer and the employees to determine whether the Act permits the employer’s practices.  Even if the employer’s business need outweighs the employee’s rights, Abruzzo suggests that an employer should be required to disclose to employees the technologies it uses to monitor and manage them, its reasons for doing so, and how it is using the information it obtains.

When conducting internal investigations, employers should be cognizant of the NLRB General Counsel’s new focus relating to electronic monitoring.  A forensic review of employee emails and texts should be carefully tailored to the situation to make it more likely to be acceptable under any new standard the NLRB may set based on Abruzzo’s initiative.  Employers should consider whether their existing policies are appropriately tailored and sufficiently address the review of e-mails/texts during an internal investigation.

Employers should be aware of other examples Abruzzo identifies relating to how the increased use of new technologies for monitoring employees might violate the Act, including: (1) using wearable devices, security cameras, and radio frequency identification badges to track conversations and movements; (2) inserting GPS tracking devices and cameras in vehicles used by employee drivers; and (3) utilizing computers to monitor employees in call centers, offices, or at home through keyloggers and software that takes screenshots, webcam photos, or audio recordings throughout the day.

Her memo also considers when surveillance extends to break times and nonwork areas – which could be viewed as preventing employees from engaging in solicitation or distribution of union literature during nonworking time.  Just recently, in Stern Produce Company, 372 NLRB No. 74 (Apr. 11, 2023), the Board considered a situation where a known union-supporting employee was told by his supervisor not to cover the inside-facing camera in his truck during a lunch break.  The Board found that the employer violated the Act because the supervisor’s actions created an impression of surveillance which departed from the Employer’s past practice as the employee was never told not to cover the camera during his lunch break and was not aware of a policy prohibiting employees from doing so.

In sum, employers should keep their eye on the possible NLRB impact on internal investigations. Considering Abruzzo’s memo, employers should evaluate their electronic monitoring policies, and review NLRB updates on enforcement against such practices as well as their internal investigation strategies for legal compliance on an ongoing basis.

The Jackson Lewis Corporate Governance and Internal Investigations practice group is well-versed in workplace surveillance issues and continues to analyze ongoing developments in the area.  Please contact a Jackson Lewis attorney with any questions regarding workplace surveillance and any other corporate governance and internal investigations developments.

On March 22, 2023, National Labor Relations Board (NLRB or Board) General Counsel Jennifer A. Abruzzo issued a memorandum to all NLRB Field Offices on the implications of the Board’s February 21, 2023, decision in McLaren Macomb, 372 NLRB No. 58 (2023). 

In McLaren Macomb, the Board found an employer violated the National Labor Relations Act (NLRA) by offering severance agreements to furloughed employees containing overbroad non-disparagement and confidentiality provisions, which interfered with employee rights under Section 7 of the NLRA. Among others, Section 7 grants employees the right to engage in “concerted activities for the purpose of … mutual aid or protection ….” the Board ruled the non-disparagement provision infringed on employee rights under Section 7 to criticize the employer’s workplace policies. The Board also ruled the confidentiality provision interfered with Section 7 rights because it prevented employees from discussing the severance agreement (including its unlawful non-disparagement provision) with others, including the NLRB, coworkers, and the employee’s current or future union. 

The Board’s decision created some confusion over the enforceability and lawfulness of severance agreements and other employment-related agreements.

General Counsel Abruzzo then issued the memorandum to assist the NLRB Field Offices in their responses to inquiries from the public on the implications of McLaren Macomb. Albeit not legally binding or reflecting the views of the Board, the memorandum provides insight into how General Counsel Abruzzo and the NLRB Field Offices may interpret common provisions in severance agreements and other agreements in the wake of McLaren Macomb. The memorandum addressed the following:

  1. Severance agreements are not per se unlawful under the NLRA. Citing prior Board decisions, General Counsel Abruzzo confirmed that employers may continue to lawfully offer severance agreements containing a release of employment claims to employees without violating the NLRA, provided they do not contain overly broad provisions interfering with Section 7 rights.
  2. Surrounding circumstances are not relevant when analyzing whether a provision is lawful. According to General Counsel Abruzzo, an employer cannot have a legitimate interest in maintaining a facially unlawful provision in a severance agreement. Thus, the circumstances surrounding a specific provision are not relevant. 
  3. The mere offering of a severance agreement with an unlawful provision violates the NLRA, even if an employee does not actually sign the severance agreement. General Counsel Abruzzo interprets the mere offering of a severance agreement with an overly broad provision to be inherently coercive and violative of the NLRA, because it conditions severance benefits on the waiver of statutory rights to engage in future protected concerted activities or to file or assist in the investigation and prosecution of charges with the Board. 
  4. Offering a severance agreement to a supervisor could be unlawful. General Counsel Abruzzo opined that even though supervisors are not generally protected by the NLRA, it would be unlawful for an employer to retaliate against a supervisor who refuses to proffer an unlawfully overbroad severance agreement, and it could be unlawful to offer a severance agreement to a supervisor if it would prohibit a supervisor from participating in a Board proceeding.
  5. McLaren Macomb applies retroactively to severance agreements executed before the decision. General Counsel Abruzzo explained that, because all Board decisions are presumed to apply retroactively, the holding of McLaren Macomb applies to severance agreements entered into before February 21, 2023 (i.e., the date of the decision). While acknowledging that the six-month statute of limitations under Section 10(b) of the NLRA may apply to an unlawful proffer of a severance agreement with overbroad provisions, General Counsel Abruzzo opined that “maintaining and/or enforcing” a previously entered into severance agreement with unlawful provisions would continue to be a violation and a charge alleging such a violation would not be time-barred. 
  6. In general, the entire severance agreement will not be invalidated by a single overbroad provision, just the offending provision. Recognizing that each case is fact specific, General Counsel Abruzzo indicated the NLRB generally will seek to have the specific unlawful provisions voided instead of voiding the entire agreement, “regardless of whether there is a severability clause or not.” General Counsel Abruzzo encouraged employers to proactively advise former employees subject to severance agreements with unlawful provisions that such provisions are null and void and the employer will not seek to enforce the provisions or pursue penalties for breach of the unlawful provisions. General Counsel Abruzzo acknowledged that such conduct would not cure a technical violation, but she said it “could form the basis for consideration of a merit dismissal if a meritorious charge solely alleging an unlawful proffer is filed.” Employers considering such an approach should consult with counsel.
  7. Former employees are entitled to the same protections as current employees. General Counsel Abruzzo asserts that former employees are entitled to the same protections as current employees under the NLRA, noting that the statutory definition of “employee” is not limited to employees of a particular employer, discussions protected under Section 7 are not limited to discussions with coworkers, and former employee involvement in NLRB proceedings constitutes mutual aid and protection under Section 7.
  8. Neither employees nor their unions can voluntarily waive the future exercise of Section 7 rights. Citing public policy considerations, General Counsel Abruzzo opined that, regardless of whether the employer, the employees, or a union on behalf of employees requests an overbroad confidentiality or non-disparagement provision, employees cannot waive the future exercise of their Section 7 rights.
  9. Prior guidance regarding the terms of “non-Board” settlement agreements are consistent with McLaren Macomb. The memorandum confirmed the guidance regarding non-Board settlements (i.e., settlements between the parties that result in a withdrawal of an unfair labor practice charge) in a 2006 memorandum issued by the NLRB’s Office of the General Counsel, OM 07-27, is consistent with the Board’s decision in McLaren Macomb. OM 07-27 outlined concerns about various provisions in non-Board settlements, including: waivers of the right to file NLRB charges on future unfair labor practices and on future employment; waivers of the right to assist other employees in the investigation and trial of NLRB cases; narrowly tailored confidentiality clauses and clauses that prohibit an employee from engaging in non-defamatory talk about the employer; and unduly harsh penalties for breach of the agreement.
    OM 07-27 acknowledged that, despite a general rule against provisions limiting an individual from engaging in discussions about the employer or the terms of the settlement agreement, non-Board settlements could contain provisions prohibiting defamatory statements and the disclosure of the amount of money received under the settlement agreement. OM 07-27 also acknowledged that, while employees may not release future rights, in certain circumstances, “an employee may knowingly waive the right to seek employment with a named employer in the future.” 
  10. Narrowly tailored confidentiality and non-disparagement provisions may be lawful. General Counsel Abruzzo opined that confidentiality provisions restricting the dissemination of proprietary or trade secret information for a period of time based on legitimate business justifications could be lawful, but she did not provide an example of lawful language. Similarly, she opined that a non-disparagement provision may be lawful if it is limited to statements that “meet the definition of defamation as being maliciously untrue, such that they are made with knowledge of their falsity or with reckless disregard for their truth or falsity.”
  11. A “savings clause” or disclaimer may resolve ambiguous terms, but it would not necessarily cure overbroad provisions. General Counsel Abruzzo also confirmed her opinion that even if a severance agreement contained a NLRA disclaimer or other statement outlining employee rights under Section 7, it would not necessarily cure an overbroad provision and an employer may still be liable for mixed or inconsistent messages provided to employees.
  12. Beyond non-disparagement and confidentiality provisions; other common provisions may be unlawful. Finally, General Counsel Abruzzo identified several other types of common provisions that she views as problematic and potentially interfering with Section 7 rights, including: non-competes, no solicitation, no poaching, cooperation requirements for current or future proceedings, and broad liability releases and covenants not to sue that go beyond the employer, employment claims, or matters as of the date of the agreement. 

General Counsel Abruzzo’s memorandum suggests the NLRB Field Offices will carefully review severance agreements and other employment agreements to assess whether each provision interferes with employee rights under Section 7. Employers should consult with experienced labor counsel to thoroughly assess severance agreements and other employment agreements in light of Section 7, the McLaren Macomb decision, and the General Counsel’s memorandum.

On March 7, 2023, the Consumer Financial Protection Bureau (CFPB), the federal government agency charged with protecting consumers in the financial sector, and the National Labor Relations Board (NLRB), the federal government agency tasked with protecting private sector employees’ rights to engage in union organizing and other concerted activity, announced an information sharing agreement in order to better protect both consumers and workers.

Read the full article on Jackson Lewis’ Workplace Privacy, Data Management & Security Report.

The union membership rate among private sector workers fell to 6.0% in 2022, according to a U.S. Bureau of Labor Statistics (BLS) news release. This is down from 6.1% in 2021 and continues the overall decline since private sector union membership peaked in the mid-1950s.

While organizing activity increased in 2022 (including workers at high-profile employers petitioning to unionize for the first time), the size of the national workforce also grew in 2022, compared to the prior year. Thus, unions would have had to grow membership even more significantly to maintain or improve the national membership rate. Indeed, the number of union members in the private sector increased by 193,000 in 2022.

Industries with some of the highest unionization rates include transportation and utilities (15.2%), motion pictures and sound recording (17.3%), and construction (11.7%). Despite the uptick in organizing activity in the retail and fast-food industries last year, unionization in retail trade decreased to 4.3% (down from 4.4% in 2021) and accommodation and food services remained at 2.0%.

Union membership increased in 2022 in many states, including Alabama, Arkansas, Connecticut, Indiana, Kansas, Kentucky, Maryland, Massachusetts, Ohio, and Texas.

The BLS data reinforces a 2022 Gallup survey that reported that, while 71% of the U.S. population views union favorably, 58% of nonunion workers are “not interested at all” in actually joining a union. Likewise, the data shows that much of the high-profile organizing activity seen throughout the country involved only a small percentage of the overall workforce.

Nevertheless, 2022 witnessed an increase in employee activism, an uptick in walk outs and work stoppages, and an effort by “home grown” labor organizations to seek representation. Moreover, momentum from recent high-profile unionizing successes should not be overlooked. It is all the more important that employers continue to engage in the everyday blocking and tackling, by promoting positive employee relations, addressing employee issues and concerns at the first-line supervisory level, and taking the necessary steps to be an employer of choice.

Please contact your Jackson Lewis attorney if you have any questions about your organization’s labor relations goals and strategies.

The fast-changing world of college athletics is about to collide with the ever-changing doctrine of joint employment.

In January 2022, on behalf of football and basketball athletes at the University of Southern California (USC), the National College Players Association (NCPA) filed an unfair labor practice charge with the National Labor Relations Board (NLRB) against USC, the Pac-12, and the NCAA. In the charge, the NCPA argued that college athletes should be considered employees and not student-athletes. On December 15, 2022, the NLRB’s Los Angeles Region agreed. NLRB General Counsel Jennifer Abruzzo said in a statement that USC, the Pac-12, and the NCAA have together “maintained unlawful rules and unlawfully misclassified scholarship basketball and football players as mere ‘student-athletes’ rather than employees entitled to protection under our law.” In September 2021, Abruzzo issued a memo (GC 21-08) making clear that some college athletes should be considered employees.

Read the full article on Jackson Lewis’ Collegiate & Professional Sports Law Blog.

In a 3-2 decision, the National Labor Relations Board has reinstated its prior standard providing a more expansive right of off-duty contractor employees to access publicly accessible areas of the primary employer’s workplace for the purpose of engaging in organizing activity.

Part of a wave of decisions overturning Trump-era precedent (e.g., Labor Board Returns to ‘Overwhelming Community of Interest’ Standard for Bargaining Units), the Board’s latest ruling prohibits property owners from excluding from publicly accessible areas contract workers who wish to engage in organizing activity on the worksite, unless the activity “significantly interferes with the use of the property or where exclusion is justified by another legitimate reason.” Bexar County Performing Arts Center Foundation d/b/a Tobin Center, 372 NLRB 28 (Bexar II) (Dec. 16, 2022).

The facts are as follows. In 2019, a group of third-party contractor musicians were prohibited from distributing leafletting materials on publicly accessible areas of Tobin Center property. The Trump-era Board ruled that a property owner generally may prohibit off-duty employees of an on-site contractor from accessing private property to engage in activity protected by Section 7 activity of the National Labor Relations Act. The Board announced a two-step standard. Under the first step, only contractor employees who work both “regularly” and “exclusively” on the property are deemed to have a sufficient connection to the property to be afforded greater Section 7 access rights than nonemployees. However, under the second step, even if contractor employees work both regularly and exclusively on the property, the property owner is free to exclude them — even from areas open to the public — if it can show that the contractor employees “have one or more reasonable nontrespassory alternative means to communicate their message.”

Bexar II returns to the standard announced in the 2011 case, New York New York Hotel & Casino, 356 NLRB 907, under which a property owner may lawfully exclude from its property off-duty employees who regularly work on the property for an onsite contractor only where the property owner is able to demonstrate that the contractor employees’ Section 7 activity significantly interferes with the use of the property or where exclusion is justified by another legitimate business reason, including, but not limited to, the need to maintain production and discipline. Only under those limited circumstances can a property owner restrict a contract employees’ Section 7 right to engage in publicly accessible areas, according to the Board. The New York New York standard has been upheld by courts.

The Board’s decision in Bexar II applies to all pending cases. Please contact your Jackson Lewis attorney to determine how this case may impact your organization or to answer any questions you may have.

Responding in part to the nature of the post-COVID-19 remote workplace, NLRB GC Jennifer Abruzzo has released a memo on employers’ use of electronic monitoring and automated management in the workplace. The memo also directs NLRB Regions to submit to the Division of Advice any cases involving intrusive or abusive electronic surveillance and algorithmic management that interferes with the exercise of NLRA Section 7 rights.

Citing concerns over the interference of labor organizing and bargaining communications, Abruzzo looks to broaden the scope of the NLRA. In some cases, she urges, the NLRB should find employers presumptively violate the NLRA if their technology has a tendency to interfere with or prevent employees from engaging in protected activity. Importantly, the scrutiny called for in the memo applies to all employers subject to the NLRA, not just those employers with a unionized workforce.

Some level of remote work is relatively common nowadays. Many employers, however, are struggling to engage with employees, maintain productivity, ensure security of IT systems, and otherwise manage their workplace. Of course, monitoring employees in the “workplace” is not new and not limited to remote workers. Workplace monitoring technologies, however, have advanced considerably in recent years, as noted in the memo:

It is well documented that employers are increasingly using new technologies to closely monitor and manage employees. In warehouses, for example, some employers record workers’ conversations and track their movements using wearable devices, security cameras, and radio-frequency identification badges. On the road, some employers keep tabs on drivers using GPS tracking devices and cameras. And some employers monitor employees who work on computers—whether in call centers, offices, or at home—using keyloggers and software that takes screenshots, webcam photos, or audio recordings throughout the day.

NLRB precedent prohibits employers from unlawfully preventing discussions related to organizing or bargaining. Employers also cannot retaliate against employees for exercising such activities. For example, NLRA Section 7 protects employees’ right to engage in concerted organizing activities. Similarly, Section 8 prohibits employers from interfering with, restraining, or coercing employees exercising such rights. Likewise, certain surveillance practices are unlawful under the NLRA, such as photographing employees engaging in protected activities.

Abruzzo requests that the Board adopt a broader framework on the use of electronic management and monitoring tools. While she acknowledges the “Board must reach an accommodation between competing employer interests and employee rights,” the memo urges the Board to find that employers presumptively violate Section 8 “where the employer’s surveillance and management practices, viewed as a whole, would tend to interfere with or prevent a reasonable employee from engaging in activated protected by the Act.”

Abruzzo suggests that employers establish “narrowly tailored” practices to address “legitimate business needs” as to whether the practices outweigh employees’ Section 7 interests. If the employer establishes that its narrowly tailored business need outweighs those rights, the GC nonetheless will “urge the Board to require the employer to disclose to employees the technologies it uses to monitor and manage them, its reasons for doing so, and how it is using the information it obtains,” unless the employer can establish special circumstances.

The impact on employers that use monitoring and automated management technology can be significant if the NLRB implements Abruzzo’s suggestions.

Abruzzo also reaffirmed the inter-agency approach between the NLRA and other federal agencies, including the Department of Justice, Equal Employment Opportunity Commission, and the Department of Labor to address new cases involving technology in the workplace. Indeed, the regulation of monitoring and automated management technology is growing. For example, the EEOC released a technical assistance document addressing the potential pitfalls of using decision-making software, including artificial intelligence, and compliance with the federal civil rights laws that agency enforces.

As employers work to manage a new and changing workplace, and adopt technologies to help in the process, they will need to evaluate these technologies beyond their primary purpose and consider how they may affect compliance with a range of other obligations.

Please contact your Jackson Lewis attorney to determine how this memo may impact your workplace rules and policies and to answer any other questions you may have.

  1. The National Labor Relations Board has proposed reversing the current joint-employer standard, which took effect on April 27, 2020. The new rule would revert to the Obama-era standard for determining joint-employer status under the National Labor Relations Act. Under the proposed rule, entities may be deemed joint employers if they “share or codetermine those matters governing employees’ essential terms and conditions of employment.” (Read full article here.)

Noting the employer did not have an employee code of conduct policy prohibiting the use of derogatory language, the National Labor Relations Board (NLRB) held an automotive dealership violated the National Labor Relations Act by wrongfully terminating a union employee for calling the owner a derogatory term during negotiations. Cadillac of Naperville, Inc., 371 NLRB No. 140 (Sept. 22, 2022).

The Board explained that the employer failed to demonstrate it would have terminated the employee absent the alleged protected activity and that such derogatory language was common in the employer’s workplace.

In Cadillac, unionized employees commenced a strike after negotiations for a successor collective bargaining agreement stalled. The employee in question, a member of the union’s negotiating team, got into a verbal altercation with the employer’s owner and yelled a derogatory term at the owner. The employer terminated the employee for insubordination.

To decide whether an employee was disciplined for engaging in protected activity, the NLRB applied its mixed motive Wright Line test. The Board first found the general counsel (the Board’s prosecutorial authority) established a prima facie case of retaliation under Wright Line. It held the employee engaged in protected activity, the employer knew of the activity, and the activity was a motivating factor in the disciplinary action.

The NLRB then determined the employer failed to satisfy its burden of demonstrating it would have terminated the employee regardless of the employee’s protected concerted activity. The NLRB concluded the employee’s behavior was “the utterance of a single derogatory term in response to a profane threat of physical force from the owner…” and use of such language by both parties was common. Additionally, the employer did not produce evidence of any policy prohibiting such conduct to rebut the inference of an improper motive. As a result, the Board found the employer violated the Act.

The Board’s recent decisions applying the mixed motive Wright Line standard remind employers that they should promulgate, maintain, and consistently enforce clear and narrowly tailored work rules and policies. Doing so will help an employer establish it would have taken the same action against an employee regardless of purported protected concerted or union activity should discipline later be challenged.

The current NLRB’s recent decisions underscore its willingness to expand the scope of protected employee conduct, while requiring employers to demonstrate more rigorous proof of available defenses. Employers may contact their Jackson Lewis attorney should they have questions.

Through its decisions, the five-member National Labor Relations Board interprets the National Labor Relations Act. These decisions set rules that regulate unionized and non-unionized workplaces, including the relationship between employers and organized labor and the rights of employees to engage in concerted activities. With President Joe Biden’s appointees taking their seats, the Board’s Democratic majority is expected to make changes that would likely benefit organized labor. (Read full article here)