national labor relations board update

NLRB: RECENT DECISIONS

Dipak Patel

http://www.robinsonhungate.com

Laura Wolf

http://www.rmlawyers.com

Why should civil litigators or non-unionized employers care?

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National Labor Relations Act

• Congress enacted 29 U.S.C. §§ 151-169 in 1935

• Intended to• Promote industrial peace

• Protect the rights of both employees and employers• Encourage collective bargaining• Curtail certain private sector labor and management practices that

can harm workers, businesses, and the U.S. economy

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National Labor Relations Board

• Independent federal agency with independent litigating authority

• Intended to• Safeguard employees’ rights to organize and to determine whether

to have unions as their bargaining representative• Prevent and remedy unfair labor practices committed by private

sector employers and unions

What does the NLRA state?

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Broad Coverage

“Employer”• Any person acting as an agent of an employer, directly or

indirectly• Does not include

• the United States or any wholly owned Government corporation• any Federal Reserve Bank• any State or political subdivision thereof• any person subject to the Railway Labor Act • any labor organization (other than when acting as an employer) or

anyone acting as officer or agent of a labor organization

29 U.S.C. § 152

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Broad Coverage

“Employee”• Any current or former employee• Anyone not currently working because of a labor dispute

or an unfair labor practice• Does not include

• Supervisors (Management)• Independent Contractors • Agricultural laborers; domestic servants; persons employed by

their parent or spouse; subjects of the Railway Labor Act

29 U.S.C. § 152

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Broad Coverage

Determining Employee Status• Is a supervisor truly a “statutory” supervisor?

• Oakwood Healthcare, Inc., 348 NLRB No. 37 (ability to “assign”; “responsibility to direct”; use of “independent judgment”)

• Is worker appropriately classified as independent contractor? • “Economic dependence” upon employer (DOL WHD

Administrator’s Interpretation No. 2016-1, July 15, 2015)• Not “right to control”

BUT anyone can file a charge under the NLRA, including supervisors and independent contractors

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Broad Coverage

Employees have rights to:• Self-organization• Form, join, or assist labor organizations• Bargain collectively through representatives of their own

choosing• Engage in other concerted activities for the purpose of

collective bargaining or other mutual aid or protection (Protected Concerted Activities “PCA”)

• Refrain from any or all of such activities, except when membership in a labor organization is a condition of employment

Section 7

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Broad Coverage

Unfair labor practice

“…for an employer to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7…”

Section 8

How does the NLRB currently interpret the Act in its requirements for employers?

Handbooks and Personnel Policies

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Could anyone have concerns with these handbook provisions or personnel policies?

• “Never publish or disclose the Employer’s or another’s confidential or other proprietary information. Never publish or report on conversations that are meant to be private or internal to the Employer.”

• “No defamatory, libelous, slanderous or discriminatory comments about the Company, its customers and/or competitors, its employees or management.”

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Why would anyone have concerns with these handbook provisions or personnel policies?

• “Refrain from any action that would harm persons or property or cause damage to the Company’s business or reputation.”

• “Do not make insulting, embarrassing, hurtful or abusive comments about other company employees online, and avoid the use of offensive, derogatory, or prejudicial comments.”

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Policies that restrict Section 7 activity – or reasonably could be understood by employees to do so – are facially unlawful.

Report of the General Counsel Concerning Employer Rules (Memo GC 15-04)

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Handbooks and Personnel PoliciesWendy’s original language: facially unlawful

“During the course of your employment, you may become aware of confidential information about Wendy’s business. You must not disclose any confidential information relating to Wendy’s business to anyone outside of the Company. Your employee PIN and other personal information should be kept confidential. Please don’t share this information with any other employee.”

Wendy’s revised language: permissible

“This Crew Orientation Handbook . . . is the property of Wendy’s International LLC. No part of this handbook may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or information storage and retrieval system or otherwise, for any business/commercial venture without the express permission of Wendy’s International, LLC. The information contained in this handbook is strictly limited to use by Wendy’s and its employees. The disclosure of this handbook to competitors is prohibited. Making an unauthorized disclosure of this handbook is a serious breach of Wendy’s standards of conduct and ethics and shall expose the disclosing party to disciplinary action and other liabilities as permitted under law.” (emphasis added)

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Other examples of permissible language

• “Do not make negative comments about our customers in any social media.”

• “You may not do any of the following: . . . Use the Company’s (or any of its affiliated entities) logos, marks or other protected information or property for any business/commercial venture without the Legal Department’s express written authorization.”

emphasis added

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How does the NLRB currently interpret the Act in its requirements for employers?

Arbitration Agreements or Policies

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Waivers of Collective or Class Actions in Any Tribunal

NLRB ruling on D.R. Horton, 2012: • Violation of NLRA to require employees to sign an arbitration

agreement prohibiting them from filing joint, class, or collective employment-related claims in any forum, arbitral or judicial.

• The mandatory arbitration agreement was unlawful because• it contained an explicit restriction on protected concerted activity (“PCA”)• employees could reasonably construe it to prohibit filing charges with the

NLRB• Contracts of adhesion not okay (“yellow dog contracts”) – Norris-

LaGuardia Act• No conflict with Federal Arbitration Act

357 NLRB No. 184

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5th Circuit ruling in D.R. Horton v. NLRB, 2013: • Reverses NLRB re: class waiver provision

• Relies heavily on ATT v. Concepcion, 563 U.S. 333 (2011) to support its position that use of class procedures is not a substantive right

• Finds NLRA does not contain a congressional command overriding FAA• Affirms NLRB re: administrative charges

• Requires D.R. Horton to make clear in the arbitration agreement that employees are not precluded from filing administrative charges with the NLRB

D.R. Horton v. NLRB, 737 F.3d 344 (5th Cir. 2013)

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NLRB ruling on Murphy Oil USA, 2014: • Reaffirmed 2012 ruling from D.R. Horton: Murphy Oil violated NLRA

by requiring employees to agree to resolve all employment-related claims through individual arbitration • Substantive right to act collectively: “The core objective of the NLRA is

the protection of workers’ ability to act in concert, in support of one another.”

• No conflict with FAA or, if conflict, NLRA and Norris-LaGuardia trump• Murphy Oil further violated NLRA when it moved to compel

arbitration of an FLSA claim filed by employees in Federal district court and to dismiss their collective action; ordered to reimburse employees for expenses and legal fees.

361 NLRB No. 72 (2014)

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5th Circuit ruling in Murphy Oil v. NLRB, 2015: • Maintains its holding and reasoning from D.R. Horton, which it

does not repeat• Reverses NLRB re: class waiver provision• Affirms NLRB re: chilling effect on filing administrative charges

Murphy Oil v. NLRB, No. 14-60800, --- F.3d ---- (5th Cir. 2015)

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NLRB’s Non-Acquiescence Policy

“It is well established that the Board generally applies a ‘non-acquiescence policy’ with respect to contrary views of the federal Courts of Appeal. Thus, the [ALJ] is required to ‘apply established Board precedent which the Supreme Court has not reversed.’”

Brinker Int’l Payroll L.P. and The Sawaya & Miller Law Firm, 27-CA-110765 (December 1, 2015)

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Arbitration Agreements or PoliciesConfidentiality in Arbitration

NLRB ruling on Professional Janitorial Services of Houston, Inc., 2015: • Reaffirmed employees’ rights to class or collective actions.• Affirmed that a confidentiality provision violates the NLRA by

prohibiting or chilling employees from discussing terms and conditions of employment.• Per se violation – not fact-specific

16-CA-112850; 363 NLRB No. 35

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Confidentiality in Arbitration

NLRB ruling on Nijjar Realty, Inc., 2015:

• Reaffirmed violation in precluding class litigation or arbitration and in seeking to compel individual arbitration after a wage and hour suit was filed in state court.• Remember, not only is maintaining an agreement prohibiting class actions a violation of the

NLRA, but so is trying to enforce the agreement through motions practice

• Found that the opt-out provision of the agreement did not make the agreement lawful.• “fact that employees must take any steps to preserve their Section 7 rights burdens the

exercise of those rights”;• “reasonably tends to interfere with the free exercise of employee rights under the Act”; (citing

On Assignment Staffing Services, Inc. and Arnella M. Freeman, 32-CA-95025 (Aug. 27, 2015)

21-CA-92054; 363 NLRB No. 38

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Confidentiality in Arbitration

Ruling in Nesbitt v. FCNH, Inc., D. Colo. 2014:• Arbitration agreement invalid where it deprives plaintiff of

substantive rights under federal law• Where there is an invalid arbitration agreement, it must either

• Be deemed unenforceable where there is no savings clause, or• In keeping with the presumption in favor of arbitrability, in the case of a

contract with a savings clause, the void language may be stricken and the arbitration agreement otherwise enforced.

• In published opinion, 10th Circuit affirmed that arbitration agreement was invalid, but did not address the savings clause question

74 F.Supp.3d 1366, 1375 (2014) (aff’d Jan. 6, 2016, 10th Cir)

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Recommendations

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Recommendations for Employers

• Read recent decisions for guidance on how to draft enforceable arbitration agreements with appropriate carve-outs for class and collective actions as well as filing NLRB complaints.

• If seeking confidentiality of arbitration, do so only on an individual basis instead of insisting on pre-dispute blanket confidentiality provisions. (Banner Health Sys. and Navarro, 28-CA-023438: “witness endangerment”; “evidence destruction”; “testimony fabrication”; “prevent cover-up”)

• Arbitration agreement should: “stand-alone”; recite that it is implemented pursuant to FAA (regardless of which procedural rules chosen); include a savings clause.

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Recommendations for Employees

• Challenge employer arbitration agreements that • Do not permit class or collective actions in any forum• Tend to chill engagement in PCA or ability to bring admin. charges• Contain blanket confidentiality requirements

• Challenge employer handbooks/policies that prohibit or can be reasonably understood to prohibit concerted activity for the purpose of mutual aid or protection (PCA)• Overbroad social media policies• Policies tending to limit free exchange of information about

employment terms/conditions (salary; benefits; disciplinary actions)• You can preemptively challenge these provisions – no

need to wait until they negatively impact you

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Recommendations for Employees• Watch for telltale signs of employer interference with §7(a)

rights, such as, “If you don’t like our rules here, you can quit.”

• Chinese Daily News, 2006: violated of 8(a)(1) by telling employee to resign if not happy with job. 346 NLRB 906, 919

• McDaniel Ford, Inc., 1997: employer’s invitation to employee to quit in response to exercise of protected concerted activity is coercive.

322 NLRB 956, 956 fn. 1 and 962

• Intertherm, Inc., 1978: unlawful to tell employee that if “he was not happy with the Company, he should look elsewhere for a job.”

235 NLRB 693, 693 fn. 6

NLRB: RECENT DECISIONS

Dipak Patel

http://www.robinsonhungate.com

Laura Wolf

http://www.rmlawyers.com