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reprimanded two employees for distributing handbills in the atrium even though the automobile manufacturer subsequently rescinded the reprimand and informed the employees that it would permit distribution in the atrium.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.”