A settlement of two Fair Labor Standards Act claims (an individual lawsuit and a class action) by employees of a Bronx restaurant and the employer’s Racketeer Influenced and Corruption Organizations Act lawsuit against a union seeking to represent the employer’s employees has fallen through as a result of National Labor Relations Board objections to two provisions in the settlement agreement – the non-disparagement and non-disclosure provisions.

The restaurant has been the target of a corporate campaign involving street theater and other disruptive conduct by the Laundry Workers Center United (activists funded by the Workers United union and the Service Employees International Union). In response, the employer filed a RICO action against the activist group.

The parties agreed to settle the FLSA and RICO claims, with the restaurant reportedly agreeing to pay $1,000,000 to the employee-plaintiffs. Because the restaurant’s owner suffered years of ad hominem character attacks by the activists, the agreement included, at the restaurant’s insistence, provisions requiring mutual non-disparagement and non-disclosure of the settlement’s terms. It appeared that peace was at hand, but, because several employees also had filed unfair labor practice charges at the NLRB alleging the employer had discharged them for engaging in protected concerted activities (such as filing the FLSA class action and engaging in a protest), the court insisted the settlement be acceptable to the NLRB.

The settlement did not satisfy the NLRB. The heart of the NLRA is Section 7 – guaranteeing employees’ right to engage in union activity and other protected concerted activity. Taking Section 7 to its extreme conclusion, the NLRB would not approve the requirement that employees maintain confidentiality and not make disparaging remarks, viewing them as a limitation on employees’ protected concerted activity. That the employees agreed to the terms – and would receive a handsome settlement payment – was irrelevant to agency administrators.

The Board’s view of Section 7 as the paramount authority is most evident in how it has taken aim at routine workplace policies, characterizing many ordinary – and common sense – rules regarding confidentiality, disparagement (of coworkers and management), offensive behavior, misuse of company communications, harassment and more, as unlawful, usually based on its strained view that employees might construe these well-understood (and often inherently obvious) rules to possibly restrict them from engaging in some manner of concerted action protected under the Act.

Many say the incumbent Board majority has embraced its responsibility to enforce the Act with bureaucratic blinders, interpreting Section 7 to the nth degree while ignoring their decisions’ practical implications.

The takeaway for employers is that no settlement, work rule or employment decision is safe without analyzing it carefully for unintended implications for inhibiting the exercise of Section 7 rights.

Print:
EmailTweetLikeLinkedIn
Photo of Thomas V. Walsh Thomas V. Walsh

Tom Walsh is a Principal in the White Plains, New York, office of Jackson Lewis P.C. He received a B.A., summa cum laude, from Long Island University and his Juris Doctor from St. John’s University. He is the author of “Recent Developments…

Tom Walsh is a Principal in the White Plains, New York, office of Jackson Lewis P.C. He received a B.A., summa cum laude, from Long Island University and his Juris Doctor from St. John’s University. He is the author of “Recent Developments in the Weingarten Doctrine, The Board Shifts to the Right,” for the St. John’s University Journal of Legal Commentary. He is also co-author of the Atlantic Legal Foundation’s series “Leveling the Playing Field – What Charter School Leaders Need to Know About Union Organizing.” Mr. Walsh is a member of the New York State Bar Association and of the American Bar Association, and participates in the labor and employment law sections of both organizations.

Photo of Howard M. Bloom Howard M. Bloom

Howard M. Bloom is a Principal in the Boston, Massachusetts, office of Jackson Lewis P.C. He has practiced labor and employment law representing exclusively employers for more than 36 years.

Mr. Bloom counsels clients in a variety of industries on labor law issues.

Howard M. Bloom is a Principal in the Boston, Massachusetts, office of Jackson Lewis P.C. He has practiced labor and employment law representing exclusively employers for more than 36 years.

Mr. Bloom counsels clients in a variety of industries on labor law issues. He trains and advises executives, managers and supervisors on union awareness and positive employee relations, and assists employers in connection with union card-signing efforts, traditional union representation and corporate campaigns, and union decertification campaigns. He also represents clients at the National Labor Relations Board in connection with bargaining unit issues, objections and challenges, as well as unfair labor practice investigations and trials. Mr. Bloom also has been the spokesperson at countless first and successor contract collective bargaining negotiations, and regularly advises on collective bargaining agreement administration issues, including grievance/arbitration issues.

Mr. Bloom has appeared before the Massachusetts Supreme Judicial Court, the U.S. Court of Appeals for the District of Columbia, several U.S. District Courts, the National Labor Relations Board, the Massachusetts Labor Relations Commission, the Equal Employment Opportunity Commission and the Massachusetts Commission Against Discrimination.

Mr. Bloom speaks frequently to employer groups on a wide range of labor and employment law topics. He also has written extensively on labor and employment law for a variety of publications, including New England Business magazine, The Boston Globe and the Boston Business Journal. He also is editor of and a frequent contributor to the Jackson Lewis Labor & Collective Bargaining Blog.

While attending law school, he was the Executive Editor of The Advocate: the Suffolk University Law School Journal and President of the Student Bar Association.

Mr. Bloom is a diehard baseball fan. His first book, The Baseball Uncyclopedia: A Highly Opinionated Myth-Busting Guide to the Great American Game, was published in February 2006.

Photo of Philip B. Rosen Philip B. Rosen

Philip B. Rosen is a Principal in the New York City office of Jackson Lewis P.C. and a member of the Firm’s Management Committee. Mr. Rosen also leads the firm’s Labor Practice Group. He joined the Firm in 1979 and served as Managing…

Philip B. Rosen is a Principal in the New York City office of Jackson Lewis P.C. and a member of the Firm’s Management Committee. Mr. Rosen also leads the firm’s Labor Practice Group. He joined the Firm in 1979 and served as Managing Partner of the New York City office from 1989 to 2009.

Mr. Rosen lectures extensively, conducts management training, and advises clients with respect to legislative and regulatory initiatives, corporate strategies, business ethics, social media, reorganizations and reductions-in-force, purchase/sale transactions, sexual harassment and other workplace conduct rules, compliance with the Americans With Disabilities Act, wrongful discharge and other workplace litigation, corporate campaigns and union organizing matters, collective bargaining, arbitration and National Labor Relations Board proceedings. He has been quoted by the press on many labor matters, including the National Labor Relations Board’s recent initiatives on protected concerted activity and the proposed Notice Posting requirements.