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NLRB to Non-Union Employers: We Just May Be the Boss of You

Alerts / May 4, 2012

Section 7 of the National Labor Relations Act (the "Act") protects the rights of employees "to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection . . . ." Non-union employers often fail to see beyond the organizing and collective bargaining purposes of the Act; their eyes may glaze over at any mention of the Act or the National Labor Relations Board ("NLRB"), charged with enforcing the Act.

Recent developments suggest that such an approach would be a grave error. Non-union employers increasingly find themselves in the NLRB's cross-hairs, and in surprising circumstances. Indeed, the NLRB and other federal agencies charged with enforcing employee rights are encouraging employees and their advocates to consider the Act as another arrow in their collective arsenal against employers.

NLRB RULES TAKE AIM AT NON-UNION EMPLOYERS

Much has been written already about the NLRB's requirement that employers post notices of certain employee rights under the Act. That requirement was set to take effect on April 30, 2012, but has been suspended pending court review. NLRB Announces New Posting RequirementCourt Issues Mixed-Bag for Employers on NLRB Notice-Posting Rule and D.C. Circuit Enjoins NLRB Notice-Posting Rule.

Some commentators believe that the posting requirement seeks to encourage union representation. Another view, and perhaps the better one, is that the NLRB is promoting the use of the Act as an enforcement mechanism for unrepresented employees, even in the absence of union organizing.

NLRB DECISIONS SHIFT TERRAIN TO MORE EMPLOYEE-FRIENDLY FORUM

Indeed, whether the posting requirement ever goes into effect, decisions of the NLRB, administrative law judges, and of the NLRB's general counsel over the past year reflect the potency of the Act, either to supplement existing employment laws, or in some cases, to create an entirely new paradigm for challenging employers. There appears to be a trend toward use of the Act where other laws do not offer the relief sought or where the NLRB is viewed as a more hospitable forum for vindication of employee rights.

The Social Media Cases: The Act Expands Whistle-Blower Laws?

Legal analysts have been atwitter for quite some time regarding developments in the area of employee Internet and social media use. Lessons Learned from Acting General Counsel Reports on Social Media.

What many non-union employers fail to appreciate is that the NLRB's social media decisions often involve charges brought by unrepresented employees. And some of these decisions involve employee complaints over matters that most employers believe fall within their unfettered management prerogatives. One social media case found a violation of Section 7 when employees complained about perceived shortcomings in their employer's marketing campaign.

The social media cases make clear that, in this digital age, non-union employers may no longer insist on the type of employee loyalty that requires employee silence about company management and operations. This is true even where the employee does not allege the type of misconduct or malfeasance that must otherwise be shown to obtain whistle blower protection.

Wage and Hour Disputes: The Act as an Alternate Enforcement Mechanism?

47 Old Country, Inc., NLRB Case No. 29-CA-30247 (April 3, 2012) -- Administrative Law Judge Steven Davis concluded that 47 Old Country, Inc., which operated a nail salon, violated Section 8(a)(1) of the Act when it terminated the employment of employees who had brought a lawsuit alleging violations of federal and state wage and hour laws and laws against discrimination.

The Chinese Staff and Workers' Association, a non-profit workers' rights advocacy group (CSWA), initiated the action before the NLRB on behalf of the terminated employees. Presumably, CSWA considered court action and concluded that an unfair practice charge was a better vehicle for their clients. This makes sense. The Act may not provide all of the remedies available under other state or federal laws, but it allows the NLRB to seek injunctive relief (under Section 10(j)) while a matter is pending. The Act also raises the stakes for recidivist or intractable employers. Contempt proceedings are available for violations of enforcement orders and prior unfair labor practices may be evidence of subsequent violations of the Act.

Confidentiality Provisions: The Act as a Guarantor of Transparency?

NLRB v. Northeastern Land Services, Ltd., 645 F.3d 475 (1st Cir. 2011). On June 22, 2011, the Court of Appeals for the First Circuit affirmed the NLRB's decision that a confidentiality provision in an agreement with an unrepresented employee interfered with the employee's rights under Section 7 of the Act and thus violated Section 8(a)(1) of the Act. The NLRB, and the court of appeals, rejected the employer's argument that disclosure of wage information could jeopardize its ability to bid successfully for work. Court of Appeals Affirms NLRB's Aggressive Approach to Confidentiality Provisions that May Tend to Inhibit the Exercise of Section 7 Rights.

Design Technology Group, LLC d/b/a Bettie Page Clothing and DTG California Management, LLC d/b/a/ Bettie Page Clothing and Vanessa Morris, Case 20-CA-35511 (April 24, 2012). In a decision issued April 27, 2012, Administrative Law Judge William G. Kocol held that handbook provisions prohibiting employees from disclosing wages or compensation to each other or to a third party and protecting the confidentiality of confidential and proprietary information -- including personnel information -- violated Section 7 of the Act.

Hyundai America Shipping Agency, Inc., Case 28-CA-22892. In an October 28, 2010 decision, Administrative Law Judge Gregory Meyerson found unlawful various aspects of the employer's confidentiality policies and practices. Of particular note is the finding that the employer's oral rule prohibiting employees from discussing "with other persons any matters under investigation by its human resources department" violated Section 8(a)(1) of the Act. The judge observed that the giving of routine admonitions, in every case, adversely affects employees' Section 7 rights. The employer failed to show a countervailing and legitimate interest in preserving confidentiality, because it did not conduct individual reviews to determine whether confidentiality was necessary in each case where the admonition was given. The NLRB adopted the judge's finding. See Hyundai America Shipping Agency, Inc., 357 NLRB No. 80 (2011).

Looking at these cases and the social media cases, it is clear that employers do not have the home court advantage when defending confidentiality provisions against attack under the Act. Only the most narrowly tailored of policies, directed at preventing unlawful conduct, tend to pass muster.

Waivers of Class or Collective Actions: The Act as a Blunt Instrument Against the Federal Arbitration Act?

D.R. Horton, Inc., 357 NLRB 1 (2012). This case involved a challenge to a mandatory waiver of employees' rights to bring class or collective actions in any forum. Notwithstanding the Federal Arbitration Act, the NLRB found that such a waiver violates employees' rights under Section 7 of the Act. The NLRB observed that class or collective actions involving wages, hours or working conditions "are at the core of what Congress intended to protect by adopting the broad language of Section 7." NLRB Holds Class Action Waivers Violate National Labor Relations Act: What's Next?

24 Hour Fitness USA, Inc., Case 20-CA-35419. On April 30, 2012, the Acting General Counsel issued a complaint against 24 Hour Fitness. The complaint alleges that 24 Hour Fitness's policy waiving class or collective actions violates Section 8(a)(1) of the Act by unlawfully interfering with employees' rights to engage in protected concerted activity under Section 7.

The U.S. Supreme Court likely will be asked to consider whether the NLRB's views on waivers of class or collective actions conflict with existing Supreme Court precedent. See e.g., AT&T Mobility v. Concepcion, 131 S.Ct 1740, 1746 (2011). Supreme Court Breathes New Life Into Class Action Waivers in Arbitration Agreements. In the meantime, employers should be aware of the prospect of challenges to pre-employment arbitration agreements in which employees waive their rights to collective or class actions.

FAD OR TREND?

The NLRB has announced the launch of a website directed at non-union workers, and around the country, the NLRB is collaborating with other agencies and departments that enforce worker rights to educate employee advocates about protections offered by the Act. This suggests that the number of cases invoking the Section 7 rights of unrepresented workers may only increase.

On April 12, 2012, Labor Secretary Hilda Solis touted the importance of alliances across worker and civil rights organizations at the National Action Network's annual convention. Leaders of the Service Employees International Union, Communications Workers of America and the International Association of Machinists were in attendance.

Secretary Solis's remarks mirror efforts underway in various Regional Offices of the NLRB.

  • Region 28 recently announced its participation in an "Advocacy Meeting" hosted by the Equal Employment Opportunity Commission (EEOC) in Phoenix, Arizona. Other agencies represented included the Office of Federal Contract Compliance Programs (OFCCP) and the Department of Labor's Wage and Hour Division. Region 28 provided an overview of the Act as part of a panel discussion of federal employment statutes and agencies.
  • Last fall, Region 15 participated in a "Town Hall Meeting" with the EEOC and the Louisiana Commission on Human Rights at Southern University Law School. The agencies provided information about the services they offer and held one-on-one meetings after the general discussion to allow attendees to raise questions and issues about wages, working conditions and other employment concerns.
  • On April 19, 2012, Region 21 participated in the Fourth Annual Labor, Social and Environmental Justice Fair at California State University, Dominguez Hills. NLRB Agents from Region 21 distributed information concerning the NLRB's services and participated in workshops about the labor movement and social justice issues.
  • The OFCCP has adopted its own posting requirement, which has already gone into effect. On June 21, 2010, contractors and subcontractors with the federal government were required to post notices informing employees of their rights under the Act. The notice informs employees of their right to form, join and assist unions and to bargain collectively with their employer. It also provides examples of unlawful conduct and contains information regarding how employees can contact the NLRB with questions or to file complaints.

GLEANINGS

With its increased focus upon the rights of unrepresented employees, the NLRB is shifting the battlefield for employment disputes onto its own territory. Non-union employers who have not done so in the past should pay heed to the ever-expanding realm of activity deemed to be protected and concerted. Employers need also be aware that the manner in which they enforce their policies may now result in a war on numerous fronts -- administrative agencies, the courts and the NLRB. Even where no statutory or common law cause of action may exist to vindicate employee rights, the cry of concerted activity may secure a hearing before an employee-friendly forum.

If you have any questions about the material or information contained in this alert, please contact any member of Baker Hostetler's Labor Relations Team.

Authorship Credit: Ellen J. Shadur and Dawn Kennedy


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