Last week, the National Labor Relations Board upheld an Administrative Law Judge’s decision that a Jimmy John’s franchisor violated the National Labor Relations Act for disciplining and discharging several employees who were engaged in protected and concerted activity. In MikLin Enterprises, Inc., 361 NLRB No. 27 (Aug. 21, 2014), the Board determined that Respondent MikLin Enterprises, Inc. unlawfully terminated six employees who posted posters implying that sick workers were making customers’ sandwiches, reasoning that the posters were sufficiently connected to a labor dispute and not so malicious or disparaging as to lose the protections of the Act.

The case arose from MikLin’s policy not to provide paid sick leave to its employees. Instead, the employees were required to find replacements for their shift if they were too sick to come in. Failure to do so could result in discipline. In protest against MikLin’s sick leave policy, the Industrial Workers of the World union (IWW) placed the below poster mocking the policy on bulletin boards inside MikLin’s stores in customer areas.

  

MikLin’s managers removed the posters whenever they found them. Not long after the posters began appearing in MikLin’s stores and in public places nearby, MikLin terminated six employees and issued written warnings to three others for hanging the posters.

The Board agreed with the ALJ that the discipline and discharges were unlawful despite the Respondent’s contention that the posters were disloyal and thus not protected activity. The decision explained that whether a particular communication is so disloyal as to lose the protections of the Act is governed by the Jefferson Standard test, which focuses on 1) whether the communication is related to a current labor dispute, and 2) whether the communication is so “disloyal, reckless, or maliciously untrue” that it would become unprotected. With regards to whether a particular communication is “disloyal,” the Board will consider whether the communication was made “at a critical time in the initiation of the company’s business,” or whether the communication could be considered to be “reasonably calculated to harm the company’s reputation and reduce its income.”

Ultimately, the Board determined that the posters were both clearly related to a labor dispute and not reckless or so maliciously untrue as to lose the protections of the Act. Communications will only be found to be “maliciously untrue” where they “are made with knowledge of their falsity or with reckless disregard for their truth or falsity.” The fact that a statement is false or misleading is not enough to cause it to become unprotected. Accordingly, despite the poster’s admonition that “WE CAN’T EVEN CALL IN SICK” was demonstrably untrue, the Board held that it was an accurate portrayal of the policy because employees would have to take the further step of finding their own replacement.

The posters were also determined not to be disloyal to the employer because they were linked to the labor dispute and “not maliciously motivated to harm the employer.” Even though a poster implying that employees were making sandwiches while sick could prejudice the employer, that prejudice alone was not enough because “were harm or potential harm to the employer to be the determining factor in the . . . protection analysis, it is doubtful that the legislative purposes of the Act would ever be realized.”

The Board also affirmed the ALJ’s determination that MikLin violated section 8(a)(1) of the Act when an assistant manager encouraged employees and supervisors to harass a union supporter via Facebook. The harassment, which included posting the supporter’s phone number online, was unlawful because it would reasonably intimidate both the supporter and other employees from supporting the union.

Member Johnson authored a strong dissent, arguing that the posters were disloyal communications and thus were unprotected.

Section 7 of the Act does not confer on employees an unlimited right to disparage the quality of their employer’s products with an intent to cause harm to their employer’s reputation, or reduce its income, or with reckless disregard for such consequences of their actions, even if their efforts can be linked to a legitimate labor dispute.

In effect, Member Johnson argued that the disparaging posters were totally out of proportion with the dispute regarding sick leave because the posters attacked both the reputation of MikLin and the Jimmy Johns franchise. The dissent also explained that the posters should have been unprotected communications because they were both false and maliciously motivated.

This decision should cause employers to sit back and take notice. The Board has signaled here that employers will face a very high hurdle when arguing that employee communications touching on labor disputes are unprotected activities. Accordingly, employers should tread carefully and consult counsel before issuing discipline in response to employee communications.