Labor Relations Today

Labor Relations Today

ALJ Strikes Down (Another) Workplace Civility Rule and Ban on Photographs at Las Vegas Casino

Posted in NLRA, Unfair Labor Practices, Workplace Rules

On September 26, 2016, an ALJ struck down several workplace rules at a casino in Las Vegas, including two rules that prohibited “inappropriate conduct” and taking photographs on the casino floor.  The ALJ found that, although the rules did not violate Section 7, a reasonable employee could interpret the rules as prohibiting them from engaging in concerted, protected activity and, therefore, were unlawful under the Act.

This decision marks yet another ruling striking down workplace civility rules. In this latest case, the ALJ found that the casino’s rule encouraging employees to “[d]isplay[] appropriate behavior at work” and prohibiting employees from “engaging in misconduct on or off-duty that (as determined by [the casino]) materially and adversely affects job performance or tends to bring discredit to [the caisno]” was ambiguous and overbroad.

The ALJ found the a reasonable employee could construe the rule as prohibiting discussions about supervisory or management decisions and could ultimately “chill” employees’ Section 7 rights.  The ALJ further found that the rule contained a “patent ambiguity.” The ALJ reasoned that the rule could be “easily interpreted” to prohibit an untold number of activities that might “affect job performance” or “bring discredit to the casino,” including protesting working conditions or talking about terms and conditions of employment.  Although the ALJ recognized that some forms of speech can be prohibited – such as abusive, injurious, or threatening language – the ALJ found that this rule failed to make clear that it was limited to such non-protected speech.

The ALJ also found that the casino’s rule prohibiting employees from taking photographs or making recordings on the casino floor was overbroad and not narrowly tailored.  The rule prohibited employees from actively taking photos and from using personal devices, such as cell phones with cameras, while on duty.  The ALJ found that employees have a right to photograph working conditions in furtherance of concerted activity, including, among other things, to record images of protected picketing, document unsafe workplace equipment or hazardous working conditions, document and publicize discussions about terms and conditions of employment, document inconsistent application of employer rules, or record evidence to preserve it for later use in administrative or judicial forums in employment related actions.

Although such bans on photographs are common at casinos to protect patron privacy, the ALJ found that the rule was not narrowly tailored to protecting patron privacy.  Instead, the ALJ found that the rule was overbroad and would lead a reasonable employee to interpret the rule as prohibiting photographs of working conditions.

NLRB’s Coffin Corner Punt Pins Private Universities’ Sports Programs in Perilous Spot

Posted in NLRA, Social Media, Unfair Labor Practices

In an advice memorandum issued on September 22, 2016, the National Labor Relations Board’s Office of the General Counsel declined to issue a complaint against Northwestern University for certain football team rules despite finding those rules violative of the National Labor Relations Act. Unlike the Board’s decision not to assert jurisdiction over the unionization effort of scholarship football players at Northwestern University last year, the General Counsel’s Division of Advice’s decision does not purport to be based on the potential complexities created by finding student athletes to be statutory employees under the Act. Instead, the Division of Advice asserts that “it would not effectuate the policies and purposes of the NLRA to issue complaint in this case because the Employer, although still maintaining that athletic scholarship football players are not employees under the NLRA, modified the rules to bring them into compliance with the NLRA and sent the scholarship football players a notice of the corrections, which sets forth the rights of employees under the NLRA.”

The rules at issue were a social media policy, a policy limiting disclosure of strategies and player injuries, a dispute resolution procedure, and a rule for communicating with the media set forth in the University’s Football Handbook applicable to members of the team. The Division of Advice, assuming for purposes of its memorandum that scholarship athletes are statutory employees, found that each policy as originally drafted violated the Act. While the Division of Advice found that the university corrected the violations by revising or striking the policies in response to the unfair labor practice charge, the Division of Advice concluded that the university did not adequately repudiate the unlawful rules under the Board’s Passavant standard. Nevertheless, the General Counsel’s Division of Advice advised the regional office to dismiss the unfair labor practice charge.

Given that the General Counsel believed that it had sufficient basis to issue a complaint, what might explain this uncharacteristic decision? First, given that such gracious gestures by the NLRB are few and far between (as evidenced by its aggressive tactics), the reason may be that the NLRB remains hesitant, for the time being, to find that student athletes are statutory employees given that it is an election year. Second, the NLRB may be battling for field position by using this advice memo to set up such a decision in the future, as the advice memo certainly puts private universities on notice that while the NLRB may not be willing to let student athletes unionize–at least not yet–the NLRB is poised to treat student athletes as statutory employees for all other purposes under the Act. Accordingly, while private universities currently do not have to worry about unionization of their scholarship athletes, they should prepare themselves for potential challenges under the NLRA to their rules governing the conduct of student athletes, as well as how the NLRB’s position might impact other aspects of their relationships with student athletes (e.g., wage and hour issues, workers’ compensation, etc.).

Eleventh Circuit Finds Error in National Labor Relations Board’s “Mixed-Use” Analysis

Posted in Federal Court Litigation, NLRA, NLRB

In a 2-1 decision, the Eleventh Circuit Court of Appeals (the “Eleventh Circuit”) largely upheld the National Labor Relations Board’s (the “Board”) decision that an automobile manufacturer violated the National Labor Relations Act (the “Act”) by 1) maintaining an overly broad rule prohibiting solicitation and distribution and 2) prohibiting employees not on working time from distributing union literature in its mixed-use atrium. Mercedes-Benz U.S. International, Inc. v. NLRB, Case No. 15-10291 (11th Cir. October 3, 2016).  The Eleventh Circuit, however, reversed the Board’s conclusion that the automobile manufacturer unlawfully barred distribution of union literature in its team centers, finding that the Board engaged in a faulty mixed-use analysis and ordered an overly broad remedy.

The automobile manufacturer maintained a rule that prohibited solicitation and/or distribution of non-work related materials during work time or in working areas. The Board found this rule presumptively unlawful because it could reasonably be read to prohibit solicitation in work areas by employees not on working time.  The Board also found that the automobile manufacturer failed to rebut the presumption of unlawfulness even though it “generally allowed employees to discuss the union in the workplace” and “truly sought to be neutral” toward the union.  The Eleventh Circuit agreed, concluding that the automobile manufacturer’s attitude of neutrality did not “clearly convey” its intent to permit protected solicitation in work areas by employees not on working time.  Although it affirmed the Board’s finding, the Eleventh Circuit explicitly rejected the General Counsel’s argument that the “mere maintenance” of an overly broad non-solicitation policy violates the Act without regard to an employer’s communications permitting protected solicitations.

The Eleventh Circuit also affirmed the Board’s finding that the automobile manufacturer violated the Act when it reprimanded two employees for distributing handbills in the atrium even though the automobile manufacturer subsequently rescinded the reprimand and informed the employees that it would permit distribution in the atrium. Before the administrative law judge, the automobile manufacturer argued that any interference with the employees’ rights under the Act was de minimis because it was corrected within hours.  On appeal to the Eleventh Circuit, however, the employer argued that the conclusion that the atrium was a mixed-use area was erroneous.  The Eleventh Circuit declined to consider this argument because the automobile manufacturer waived it by failing to raise it before the Board.

The appellate court, however, held that the Board erred in concluding that the automobile manufacturer unlawfully barred employees from distributing literature in one of its team centers and compounded its error by imposing its remedial order on all nineteen team centers at the plant. The manufacturer’s team centers, the majority of which are located adjacent to the production line, serve several functions, including offices for line-level managers, observation posts for engineers and quality control personnel, “second offices” for human resources staff and upper management, and rooms for pre-production meetings.  The team centers also are equipped with refrigerators, microwaves, and picnic tables, and employees occasionally use the team centers during shift and meal breaks.  Based on evidence pertaining to one team center, the administrative law judge concluded, and the Board agreed, that all of the team centers are mixed-use areas, such that the automobile manufacturer could not prohibit distribution of union literature.  The Eleventh Circuit disagreed with both the Board’s analysis and its remedy.

Reviewing Board and federal court precedent, the Eleventh Circuit faulted the Board for failing to recognize the difference between “converted” and “permanent” mixed-use areas. The appellate court explained that when a production area is converted to a non-work area (e.g., during lunch), an employer cannot prohibit distribution during the non-work period.  “This is the essence of the distinction between converted mixed-use areas and permanent mixed-use areas,” the Eleventh Circuit stated.  The court concluded that the Board erroneously treated the team center as a permanent mixed-use area without making the requisite findings as to the volume and nature of work and non-work activity.  Noting that Board precedent may support a finding that the team centers were converted mixed-use areas during certain non-work times, the Eleventh Circuit remanded the case for the Board to consider whether the evidence supports such a finding.  The Eleventh Circuit also found the Board’s remedy of requiring the automobile manufacturer to cease and desist prohibiting the distribution of literature in all nineteen team centers was overly broad “by a factor of 19,” as the Board considered evidence pertaining to one team center only.

Judge Martin dissented from the majority opinion on the grounds that “[t]he Board does not impose this distinction [between converted and permanent mixed-use areas] on its factfinders” and that it was beyond the court’s “institutional role to create these categories and require the Board to apply them.”

D.C. Circuit Scolds NLRB for ‘Bad Faith’, ‘Abusive Tactics’ and ‘Extremism’

Posted in Duty to Bargain, Federal Court Litigation, NLRA, NLRB

The United States Court of Appeals for the District of Columbia Circuit issued a scathing rebuke to the National Labor Relations Board for “abusive tactics and extremism” and ordered the Board to pay an employer nearly $18,000 in legal fees incurred due to the Board’s “bad faith litigation” in Heartland Plymouth Court MI, LLC v. NLRB, No. 15-1034, decided September 30, 2016.

The Board sued employer Heartland on the theory that the employer unlawfully refused to bargain on a matter allegedly within the scope of a collective bargaining agreement without a “clear and unmistakable” waiver.  D.C. Circuit precedent has consistently rejected that theory, regarding the contents of a CBA to be a question of “contract coverage.”  Heartland appealed the Board’s adverse order to the D.C. Circuit in 2013. That decision was held in abeyance pending the Supreme Court’s ruling in NLRB v Noel Canning. When the Supreme Court found the recess appointments of two Board members unconstitutional, the Board set aside its order against Heartland. A new Board panel readopted its prior order.  Heartland appealed the order again.

Rather than attempting to transfer the appeal to the Sixth Circuit — which embraces the Board’s “clear and unmistakable” waiver policy and covers Michigan where the conduct underlying the dispute occurred — the Board doubled down on its challenge to the D.C. Circuit’s precedent and cross-petitioned for enforcement in that Court.  “In lieu of its legitimate options,” the D.C. Circuit wrote, “the Board chose obstinacy.”

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Business Organizations and Ten States Move for a Nationwide Permanent Injunction Against DOL’s New Persuader Rule

Posted in Department of Labor, NLRB Rule-Making, Persuader Rules

In June 2016, the United States District Court for the Northern District of Texas entered a nationwide preliminary injunction against the Department of Labor’s new Persuader Rule, finding that the “DOL’s New Rule is not merely fuzzy around the edges. Rather, the New Rule is defective to its core because it entirely eliminates the LMRDA’s Advice Exemption.” National Federation of Independent Businesses et al. v. Perez, 5:16-cv-66 (N.D. Tex. June 27, 2016).  Defendants in that case have filed an interlocutory appeal to the Fifth Circuit challenging the preliminary injunction order.  For a more detailed discussion about the new Persuader Rule and the preliminary injunction, see our June 28th post.

On August 22, 2016, Plaintiffs, consisting of business federations, national trade associations, and other employer organizations, filed for summary judgment, seeking a judgment declaring the new Persuader Rule unlawful and a permanent injunction against Defendants on a nationwide basis preventing them from enforcing the rule.

On September 28, 2016, 10 states, who have intervened as Plaintiffs in the action, also filed a motion for summary judgment seeking a permanent injunction against the rule. The ten states include Alabama, Arkansas, Indiana, Michigan, Oklahoma, South Carolina, Texas, Utah, West Virginia, and Wisconsin.  In their motion for summary judgment briefing, the states argue that the new rule unconstitutionally invades a state’s right to regulate the practice of law:

[T]he New Rule goes well beyond what Congress ever envisioned and presents the classic case of an administrative diktat in search of a problem that the law never sought to solve. In a time of labor relations far removed from the 1950’s, the New Rule turns LMRDA on its head and now functionally enjoins the guarantees of confidentiality, loyalty, and candor that are central to the very existence of attorney-client relationships. Though LMRDA expressly exempts from its scope an intent to interfere with the attorney-client relationship, the New Rule breaches that accord by classifying as public the information shared only between attorney and client, creating impossible circumstances of conflict, and transforming lawyers into vending machines of law rather than the confidants, counsellors, and advisors required by the cannons.

In its quest for “transparency,” the New Rule runs roughshod over the foundations of the legal profession and the fundamental right of everyone to be able to confidentially consult with counsel about anything. Intervenors joined this lawsuit because they possess a sovereign interest in regulating the practice of law within their borders, as well as the right of their judiciaries to promulgate and maintain the longstanding ethical responsibilities owed by attorneys to their clients, and the public at large. Intervenors are committed to protecting the sanctity of the attorney-client relationship—something that “has existed since time immemorial” and “was designed to protect the client against harassment in case somebody tried to compel him by process or otherwise to disclose conversations, confessions, and statements which might have been interchanged between lawyer and client.”

As previously discussed, given the ongoing litigation and appeals, the fate of the DOL’s new Persuader Rule remains uncertain, and it would be prudent for employers to continue to prepare for the possibility of enforcement of the new Persuader Rule in the future.

Federal Judge Upholds Wisconsin Right to Work Law, But State Court Challenge is Still Pending

Posted in Federal Court Litigation, NLRA, Right to Work, State/Local Issues

In another “chapter in the ongoing, national debate about the role that labor unions play in the modern workplace and the extent to which they may be regulated by both state and federal governments, on Monday, September 26, U.S. District Judge J.P. Stadtmueller entered an order upholding Wisconsin’s right to work law that was enacted in 2015. The lawsuit was brought by two local unions of the International Union of Operating Engineers claiming that the law violated the National Labor Relations Act and unconstitutionally took something of value from the unions without compensation. The union’s latter claim was based:

on the interplay between: (1) the union’s obligation under federal law to fairly represent all persons in the bargaining unit, and (2) Wisconsin’s prohibtion on the collection of representation fees. … In other words, the plaintiffs claim that in being compelled to provide equal representational services to non-dues-paying and non-representation fee-paying persons within their bargaining unit, [the Wisconsin law] effectuates a “taking” of their property.

Relying on the Seventh Circuit’s recent decision upholding Indiana’s right to work law, Sweeney v. Pence, 767 F.3d 654 (7th Cir. 2014), Judge Stadtmueller granted judgment in favor of the state. In Sweeney, the Seventh Circuit, in a 2-1 decision, affirmed dismissal of the challenge to Indiana’s similar right to work law on the grounds that it was not preempted by the NLRA, and while not necessary to its decision, concluded that the statute did not constitute a taking. The Seventh Circuit concluded that the Indiana law did not constitute an unconstitutional taking because:

“the union is justly compensated by federal law’s grant to the Union the right to bargain exclusively with the employer.” … In other words, Indiana’s right to work law did not constitute a taking because, under the NLRA, the plaintiffs’ federal duty to fairly represent all unit employees during the collective bargaining process was “compensated” by their exclusive “seat at the negotiation table.”

As the parties did not dispute, and the Court agreed, that Sweeney all but controlled the disposition of the case, the court found that the Wisconsin law was not preempted by the NLRA and did not work an unconstitutional taking.

Interestingly, a state circuit court struck down the law as unconstitutional in April, but the state appeals court put that ruling on hold in May as it considers the case.

General Counsel Urges Board to Disallow Permanent Replacements During Economic Strikes, Absent Employer Proof of Necessity

Posted in NLRA, NLRB Decisions, Strikes, Unfair Labor Practices

In connection with pending exceptions to an ALJ decision in United Site Services of California, the General Counsel has argued that the Board should change existing law to hold that an employer violates the Act when it permanently replaces striking employees without “a legitimate and substantial business justification.”  The case is now fully briefed before the full Board.

Under existing law, an employer that refuses to reinstate economic strikers violates § 8(a)(3) of the National Labor Relations Act unless it can demonstrate that it acted to advance a “‘legitimate and substantial business justification.”  But the hiring of permanent replacement workers in and of itself has generally satisfied that requirement.  As the ALJ explained in his decision in United Site Services of California, Cases 20-CA-139280, -149509, JD(SF)-14-16 (March 17, 2016):

“[w]here employees have engaged in an economic strike, the employer may hire permanent replacements whom it need not discharge even if the strikers offer to return to work unconditionally.” Belknap, 463 U.S. at 493, 103 S.Ct. 3172. At the same time (as the Board recognized), the Act is violated if “an independent unlawful purpose” motivated the hiring of 5 permanent replacements. 1 Bd. Decision at 5; see also Hot Shoppes Inc., 146 NLRB 802, 805 (1964). As with other elements of an unfair labor practice, the General Counsel cannot prevail without a finding that the employer had an independent unlawful purpose. See NLRB v. Transportation Mgmt. Corp., 462 U.S. 393, 401, 103 S.Ct. 2469, 76 L.Ed.2d 667 (1983).

The General Counsel now urges the Board in a brief to depart from these well-established precedents and place the full burden on the employer to establish “necessity” to use permanent replacements during a strike.  The standard urged by the General Counsel would hold that

[an] employers’ permanent replacement of economic strikers is inherently destructive of employees’ statutory rights, and therefore requires a showing by the employer that it is necessary to continuing operations during a strike.

Adoption of this new standard would significantly enhance the power of labor’s main economic weapon — the strike — in economic bargaining.  It has generally been the Board’s tradition to avoid overruling clear precedent in a case without the approval of a three-member majority. Right now, of course, there remain only three Board Members — Chairman Mark Gaston Pearce and Member Lauren McFerran, Democrats; and, Member Philip Miscimarra, Republican. So while a three member consensus on this argument is highly unlikely under the current circumstances, this should be an issue to keep an eye on in 2017.

The full set of briefing papers in the case is available on the Board’s website here.

Board Member Hirozawa Endorses “Members Only” Union Recognition in Concurring Opinion as Term Expires

Posted in Beyond EFCA: Labor's Agenda, Duty to Bargain, Negotiations, NLRA, NLRB Decisions, NLRB Rule-Making

In one of the final decisions of his expired term, Board Member Kent Hirozawa sanctioned a long-rejected interpretation of the National Labor Relations Act which would impose an obligation on employers to bargain with “members only” unions. Endorsing a theory outlined most thoroughly by Professor Charles Morris in his 2005 book, “The Blue Eagle at Work,” Member Hirozawa would not require a union to obtain “exclusive” recognition or majority status before Section 8(a)(5) bargaining obligations attach.

At issue in Children’s Hospital of Oakland, 364 NLRB No. 114 (Aug. 26, 2016), was whether an employer has an obligation to arbitrate earlier arising grievances with a superseded union that no longer represents a majority of the employees. The majority decision, signed by Members Lauren McFerran and Philip Miscimarra, found that such an employer must do so because it has “a continuing duty to arbitrate grievances that arose during its bargaining relationship with the Union.”  Member Hirozawa, however, would go farther than this and require resolution of the grievances regardless of the majority or non-majority status of the union.

Member Hirozawa’s concurrence highlights two sections of statutory text in support of his position.  First, he notes that Section 8(a)(5) simply requires bargaining “subject to the provisions of section 9(a)” — and not specifically only if the union is “the representative of the employees as provided in section 9(a).”  (Emphasis added). Next, he suggests the breadth of Section 7’s text — “Employees shall have the right…to bargain collectively through representatives of their own choosing…” – is unfettered by express reference to Section 9(a) majority status.

The notions laid out in this concurring opinion, however, have found little or no support historically — underscored by the fact that no Board majority has read the largely unchanged statutory text this way in several decades.  In 2006, the Steelworkers filed an unfair labor practice charge against Dick’s Sporting Goods, asserting the employer’s refusal to recognize and bargain with a minority union violated the Act.  The Board’s Division of Advice directed the Regional Office to dismiss the charge, squarely rejecting the arguments advanced in the concurrence here:

We conclude that the Employer did not violate Section 8(a)(1) or (5) because the Employer in these circumstances had no obligation under the Act to recognize the Charging Party in the absence of a Board election establishing that it represented a majority of the Employer’s employees. This principle is well-settled and is not an open issue. Our conclusion is based on the statutory language, the legislative history, and Board and Supreme Court decisions interpreting the Act, which underscore that the statutory obligation to bargain is fundamentally grounded on the principle of majority rule.

Undeterred, the Steelworkers and a consortium of allied labor organizations filed rule-making petitions with the NLRB in 2007 and 2008. Despite the Board’s aggressive rule-making agenda during President Obama’s administration, it has to date declined to modify its “well-settled” principle requiring union majority status before imposing a bargaining obligation.

D.C. Circuit Judge to NLRB: Stop Tolerating Racist and Sexist Behavior by Strikers

Posted in Federal Court Litigation, NLRB, NLRB Decisions, Picket Line Activity

In a strongly penned concurring opinion, a D.C. Circuit Court of Appeals Judge took the National Labor Relations Board to task on Tuesday for

the too-often cavalier and enabling approach that the Board’s decisions have taken toward the sexually and racially demeaning misconduct of some employees during strikes.

The D.C. court’s decision in Consolidated Communications v. NLRB, — F.3d –, Case No. 14-1135 (D.C. Cir. Sept. 13, 2016), largely upheld the findings of the Board that the employer unlawfully terminated and/or suspended a number of employees for strike-related misconduct.  The decision sets forth the Board’s long-standing standards for protecting strike conduct and for disqualification from such protection. Applying these standards to the striker misconduct in the cases at hand, the court concluded that most of these incidents were not severe enough to lost the Act’s protection and warrant the discipline imposed.

In one of the relevant incidents, the Board concluded that a striker did grab his crotch and made obscene and intimidating gestures toward a female employee reporting to work. Nevertheless, the Board also held that this behavior was not sufficiently egregious to warrant the suspension imposed by the employer following the strike. On review, the D.C. Court of Appeals held:

Given the rough-and-tumble nature of picket lines and the fleeting nature of [the striker’s] offensive misconduct, we cannot conclude that the Board erred in its assessment of the objective impact of this particular conduct in this instance. See Allied Indus. Workers, 476 F.2d at 879 (“‘Impulsive behavior on the picket line is to be expected especially when directed against nonstriking employees or strike breakers.’”) (quoting Montgomery Ward & Co., 374 F.2d at 608 ); NMC Finishing v. NLRB, 101 F.3d 528, 532 (8th Cir. 1996) (noting the “rough and tumble economic activity permitted by the policies established by Congress through the NLRA”).

It is this holding that appears to have compelled Circuit Judge Millett to write separately. In a remarkable eight-page concurring opinion, Judge Millett catalogs the recent examples of the Board’s countenance of racial epithets, and older cases permitting misogynous vulgarities directed at women.  In her view: Continue Reading

NLRB Division of Advice Asserts Misclassification of Employees Itself Interferes with Section 7 Rights

Posted in Division of Advice, NLRA, NLRB, Unfair Labor Practices

In a General Counsel Advice Memorandum released in late August 2016, the NLRB Division of Advice found that employers who misclassify employees as independent contractors violate Section 8(a)(1) of the NLRA by restraining the employees’ section 7 rights to engage in concerted, protected activity.  The Memorandum, which is dated December 18, 2015, but was only recently made public, concerned drayage company Pacific 9 Transportation, which operates a fleet of approximately 160 trucks and 180 drivers to transport shipping containers in and around the ports of Los Angeles and Long Beach.

Like many employers who wish to utilize an independent contractor model, Pacific 9 required each driver to sign an agreement that the driver was an independent contractor and that the driver, among other things, could accept or decline any shipment offered, was not required to lease or purchase a truck from Pacific 9, and would acquire his or her own insurance.

In the course of a prolonged corporate campaign to organize the drivers, the Union filed a Charge with the NLRB Regional Office alleging, among other things, that Pacific 9 threatened to close its facility if drivers supported the Union.  Pacific 9 argued that the drivers were not statutory employees and, therefore, the Board lacked jurisdiction.  The Region found that the drivers were statutory employees, and the parties settled the charge. Pacific 9 then distributed a memo to drivers doubling down on its classification position. The memo stated, among other things, that Pacific 9 had no employee drivers, only owner operators and independent contractors, and that only employees have the right to form a union. This resulted in revocation of the settlement and subsequent enforcement proceedings.

But the Union also filed a new Charge alleging that Pacific 9’s misclassification of drivers as independent contractors in itself violated Section 8(a)(1), and the Region submitted the case for advice.  Continue Reading