A recent issue of this magazine featured a review of National Labor Relations Board (NLRB) regulatory actions and rulings, highlighting government efforts to expand awareness of labor rights and facilitate union organizing efforts. That article emphasized managerial education on legal compliance and best practices to ensure that each member of a club’s management staff complies with the law, whether a club is unionized or not.
However, the NLRB is beginning to expand into areas once considered beyond the scope of labor law and now faces new scrutiny in its increased efforts to support union organizing activities. The NLRB’s actions are creating new roadblocks for management by expanding labor law into areas thought historically to be the purview of HR and employment law. Many labor unions and workers are aware of these developments, and private clubs, whether unionized or not, should also be prepared to face the changing labor law landscape.
“PROTECTED CONCERTED ACTIVITY” AND WHY IT MATTERS
The National Labor Relations Act (Act) took effect nationally in the 1930s and covers private sector employers, including clubs. Section 7 of the Act provides employees the right to engage in other “concerted activities” for collective bargaining or their mutual aid and protection. To be “protected concerted activity,” the employees’ activity must deal with terms and conditions of employment and it must be engaged in by multiple employees or it must seek to spur future action by multiple employees.
Protected concerted activities can occur in both union and nonunion workplaces, and in both instances, employees have the right to communicate with each other about wages, benefits, and other terms and conditions of employment. Employees can also communicate with third parties, such as customers and the general public, about labor disputes.
The Act is enforced by the NLRB, which launched a public webpage to help employees understand their concerted activity rights, www.nlrb.gov/concerted-activity. In recent cases, the NLRB has begun to focus on concerted activity rights, including cases involving a customer service representative who lost her job after discussing her wages with a coworker; an engineer at a vegetable packing plant fired after reporting safety concerns affecting other employees; a paramedic fired after posting work-related grievances on Facebook; and poultry workers fired after discussing their work grievances with a newspaper reporter, all caused the NLRB to act to pursue lost jobs and pay for the affected employees.
USE OF SOCIAL MEDIA CAN BE PROTECTED ACTIVITY
Whether from a computer or a mobile device, employees frequently use social media to discuss life in their workplaces—which occasionally may reflect poorly on their employers. Accordingly, some clubs may want to restrict employees’ use of social media in or in relation to the workplace.
Under the NLRB’s established principles, employee social media use is considered a protected concerted activity. Employees’ public or private wall posts or Tweets can also be protected under the Act. Thus, employees are protected in their use of their own or company equipment to criticize their supervisors,1 make mocking or sarcastic remarks, 2 or to criticize the actions of other employees, even if those employees feel they have been “cyber bullied.”3
Though some electronic employee communications are protected, as in the above instances, the NLRB has identified personal gripes, unprovoked “opprobrious” comments, comments disruptive or undermining of discipline, third-party communications that are disparaging of employers’ products, comments designed to publicly harm the employers in a manner that does not further the employees’ position in a labor dispute, or other “maliciously untrue” communications as unprotected under the Act. Of course, the details surrounding each posting plays a role in whether or not it is considered protected.
SOCIAL MEDIA POLICIES ARE SUBJECT TO NLRB SCRUTINY
Many employers, including private clubs, have workplace policies to define expected and prohibited behaviors. The contents of these policies and standard enforcement practices play an important part of the NLRB’s oversight activities.The NLRB regularly scrutinizes workplace policies, even in non-union settings.
The NLRB prohibits rules that “reasonably tend to chill” protected concerted activity, even if a rule was not necessarily drafted with that intent or no one suffers harm. Simply having a rule on the books may be considered an unfair labor practice, even without evidence of enforcement.4
If a rule is not unlawful on its face, it may still violate the Act if (1) employees could reasonably interpret its language to prohibit protected concerted activity; (2) the rule was created in response to such activity; or (3) the rule is used to restrict such activity.
The NLRB applies these concepts to social media rules that prohibit online use of rude or discourteous behavior, inappropriate language, disparaging remarks about the workplace, supervisors or other employees, or depicting the company on the Internet without prior permission.5
An NLRB judge recently ruled that an employer unlawfully enacted information security policies which prohibited release of “confidential company information,” including video footage, on the Internet and prevented employees from sharing any confidential information with other employees or with anyone outside the company, at the company or at home. The policy told employees to report any policy breaches to management. In the judge’s view, this chilled protected activity by forcing disclosure.6
Another recent case involved an employer that maintained an electronic communications and technology policy that prohibited employees from discussing certain “sensitive information,” such as payroll, with one another. The policy also prohibited employees from electronically posting statements that “damage the company or any person’s reputation.” In finding these provisions unlawful, the NLRB concluded that employees could reasonably construe that criticizing an employer is considered a protected activity, and policies that prohibit employer criticism are considered unlawful.7
Before decisions in these cases were announced, the NLRB issued guidance memos on the potential risks of social media policies. While the guidance did not necessarily provide clear policy recommendations, it did identify one example of a social media policy deemed entirely lawful under the Act. That said, the NLRB is a highly political agency, and it is recommended that employers stay tuned as political maneuvering suggests future NLRB policy guidance could change.
CONFIDENTIALITY RULES UNDER ATTACK
The NLRB recently ruled that, to prohibit employee discussion of ongoing employer investigations, an employer must show that it has a legitimate business justification that outweighs employees’ rights to engage in protected activities.8 In a case involving Hyundai American Shipping Agency, the employer had regularly instructed employees to keep information discussed during workplace harassment investigations confidential. The employer argued that harassment law required that investigations be kept confidential, but NLRB disagreed, and the case is now on appeal in the federal courts.
In a similar case, the NLRB ruled that a human resources consultant’s oral instruction forbidding employees presently involved in complaint investigations from discussing the matter with their coworkers violated the Act. The NLRB determined that the employer’s “generalized concern with protecting the integrity of its investigations through a blanket confidentiality rule does not outweigh employees’ rights” to engage in protected activity. It was the employer’s burden to first determine, in a particular investigation, whether witnesses needed protection, evidence was in danger of being fabricated, or there existed a need to prevent a cover up.9
Employers argue that these two rulings clash with other legal guidance requiring confidentiality during the investigation of issues such as workplace harassment. In fact, years ago, the NLRB acknowledged this need for confidentially in a previous ruling.10 Unfortunately, while court review is expected before these rules are clarified, employers risk breaching required confidentiality on one hand or unlawfully demanding it on the other, depending on whether harassment law or the Act is applied.
“AT-WILL EMPLOYMENT” PROVISIONS MAY BE UNLAWFUL ACCORDING TO NLRB
For decades, employers have included at-will employment provisions in policies, acknowledgements and other employment documents. In many states, at-will employment is presumed by law, as in California’s Labor Code Section 2922.
An NLRB judge’s decision in Arizona found that the acknowledgment of receipt of an employee handbook stating that the employee’s at-will employment relationship “cannot be amended, modified or altered in any way” was unlawful. The judge determined employees could interpret the language to prohibit protected activity, which could prevent the
employee from seeking to bargain and to change his/her at-will status concertedly or through a union.11
In another Arizona NLRB case, the employer enacted a similar at-will provision. The acknowledgement said “no oral or written statements or representations regarding my employment can alter my at-will employment statement, except for a written statement signed by me and either the [executive vice-president, COO, or president].” In this instance, the employer settled with NLRB, agreeing to rescind the policy.
More recently, on October 31, 2012, the NLRB announced Advice Memoranda in two cases where at-will employment policies were ruled valid based upon the phrasing details. In the first case, the NLRB said that at-will policy language that negated certain management personnel’s authority to modify the at-will relationship was lawful because it did not limit employees’ rights to bargain for something other than at-will employment.12 In the second case, the employer also limited management’s authority, rather than employees’ rights, to change the at-will employment relationship. NLRB’s Division of Advice found the policy lawful.13
NLRB will continue to review the legality of these at-will requirements on a case-by-case basis.
ARBITRATION PROVISIONS BARRING COLLECTIVE CLAIMS MAY BE UNLAWFUL
Arbitration has long been hailed as a way for employers and employees to resolve workplace disputes without the time and expense of court litigation.
In 2011, the United States Supreme Court upheld certain consumer arbitration class-action waivers in AT&T Mobility v. Concepcion.14 Many labor lawyers immediately believed the ruling would expand the use of employee arbitration agreements to bar class action lawsuits by employees.
The NLRB later ruled in D.R. Horton, Inc., that an arbitration agreement signed by employees that bars them from bringing “joint, class, or collective claims” related to their employment, violated the Act.15 The NLRB determined the commitment to arbitrate unlawfully waived employees’ rights to engage in protected concerted or union activity, which could include the right to file charges with the NLRB.
Some federal courts have declined to follow the D.R. Horton ruling. For example, federal district courts in Pennsylvania, Arkansas and Kansas and state courts in California have disregarded the D.R. Horton ruling.16 However, some other federal district courts (New York, Missouri, and Wisconsin) have agreed with the NLRB, signaling that eventually the U.S. Supreme Court may need to step in to resolve the issue.
Meanwhile, this is a developing high-risk, high-exposure legal issue. Employers should carefully prepare arbitration agreements, but even then they may face litigation to defend and enforce them and potential NLRB prosecution for simply having them in the first place.17
IMMIGRATION ISSUES IN THE WORKPLACE
In Hoffman Plastic Compounds, Inc. v. NLRB, the Supreme Court held that the Immigration Reform and Control Act (IRCA) bars the NLRB from awarding back pay to an employee who lacks work authorization during a period for which he was due back wages because an employer violated the Act.18,19
In Hoffman, a worker tendered fraudulent documents to an employer to obtain employment. In a similar case, Mezonos Maven Bakery, the NLRB extended this reasoning to refuse back pay to an undocumented worker where the employer had apparently violated IRCA.20
More recently, in Flaum Appetizing Corp., the NLRB ruled that neither Hoffman nor the IRCA require the NLRB to permit “baseless inquiry into the immigration status [of employees] in every case in which reinstatement or back pay is granted.”21 In Flaum, an NLRB judge ordered reinstatement and back pay for 17 employees terminated because of a group protest. In the compliance stage of the case, where the back pay due was to be determined, the employer first argued that the employees were not documented, violated the IRCA, and were due nothing. The employer subpoenaed employees for immigration documentation. The NLRB directed the employer to provide factual justification for its belief that the employees were not entitled to back pay or reinstatement remedies before requiring disclosure from employees regarding their work eligibility status.
In summary, while Supreme Court law and the IRCA bar employment and remedies for those not legally authorized to be employed in the United States, a club facing NLRB charges involving undocumented workers must raise those issues carefully in order to preserve and advance the issues.
TIPS FOR CLUB MANAGEMENT
NLRB action may be slowed at headquarters as current board members’ terms end and political trends affect the appointment process, but most clubs cannot and should not simply expect that to happen.
It is important for clubs to stay abreast of new and developing NLRB regulations. For unionized clubs, there are regular developments in what is expected of bargaining parties in labor disputes or in disputes underlying contracts and grievance handling.
For non-union clubs, the focus is similarly important. Maintaining a non-union status emphasizes the need for strong rapport and good communications among all levels of management and employees.
Knowing best practices and ensuring the club has an informed workforce are both critical in successful labor management. Consistently following hiring practices and disciplinary policies and procedures can also help clubs avoid issues that an organizing union can use against them through NLRB charges on various issues, including the ones raised in this article.
Recent NLRB developments continue to complicate labor law for the unwary club. Proactive review of employment policies, enforcement techniques and employee training is not only a good business practice, but it can also help as each club focuses on its broader labor strategy necessitated by the expanded enforcement role of the NLRB.
Thomas A. Lenz is a partner in the Cerritos, Calif., office of Atkinson, Andelson, Loya, Ruud & Romo and heads the firm’s Traditional Labor Department. He can be reached at [email protected].
ENDNOTES
1. American Medical Response, NLRB Advice Memo (Oct. 5, 2010).
2. Knauz BMW, 358 NLRB No. 163 (Sept. 30, 2012).
3. Hispanics United of Buffalo, Case 3-CA-27872, JD-55-11 (Sept. 2, 2011).
4. Lafayette Park Hotel, 326 NLRB 824 (1998); Blue Cross-Blue Shield of Alabama, 225 NLRB.1217, 1220 (1976).
5. American Medical Response, above.
6. Target Corp., Case 29-CA-30804 et al., JD(NY)-16-12 (May 18, 2012).
7. Costco Wholesale Corp., 358 NLRB No. 106 (Sept. 7, 2012).
8. Hyundai American Shipping Agency, 357 NLRB No. 80, slip op. at p.15 (2011).
9. Banner Health Systems, 358 NLRB No. 93 (2012).
10. IBM, 341 NLRB 1288 (2004).
11. American Red Cross Arizona, Case 28-CA- 23443 JD(SF)-04-12 (Feb. 12, 2012).
12. Rocha Transportation, Case 31-CA-086799.
13. Swift Corporation dba Mimi’s Care, Case 28-CA-084365.
14. AT&T Mobility v. Concepcion 563 U.S. __ (2011).
15. D.R. Horton, Inc., 357 NLRB No. 184 (Jan. 3, 2012).
16. Tenet v. Rooney, 2012 W.L. 3550496 (ED PA Aug. 17, 2012); Delock et al. v. Securitas Services Inc., Case No. 4:11-CV-520 DPM (ED AR Aug. 1, 2012); Spears v. Waffle House, 2012 W.L. 2568157 (D.Kan July 2, 2012); Truly Nolen v. Superior Court, 2012 W.L. 3222111 (Cal. App. 4 Dist Aug. 9, 2012), and Coleman v. Jenny Craig, 2012 W.L. 3140299 (S.D. Cal. May 15, 2012).
17. 24 Hour Fitness, NLRB Case 20-CA-035419.
18. Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137 (2002).
19. Immigration Reform and Control Act of 1986 (8 U.S.C. Sec. 1324a) (IRCA).
20. Mezonos Maven Bakery, 357 NLRB No. 47 (Aug. 9, 2011).
21. Flaum Appetizing Corp., 357 NLRB No. 162 (Dec 20, 2011).
Sidebar:
Tips for Clubs on Labor & Employment Policies
1. Have written policies for your workplace. Properly written policies confirm what management expects of employees while giving management a range of options in running the business. Policies help build management’s credibility and consistency.
2. Enact policies you can live with. A written policy is only as good as management’s compliance with it. If a written policy is not followed, employees, government agencies and courts may consider that policy not to exist. Don’t impair your club’s credibility by stating a policy that is not followed. Policy should reflect your expected and achievable level of business as usual.
3. Make them readable. Policies should be in plain language. No fancy language or technical terms, unless absolutely necessary or to comply with a legal requirement. Also, keep them short. No one reads a handbook that is hundreds of pages. If your management does not have the time or the desire to read it, consider whether your employees will do so. A good handbook may be as few as 25–50 pages.
4. Consider the language of your workforce. Many clubs may operate principally in English but have employees who use a different language. To ensure comprehension and compliance, consider whether to have your handbook materials translated to additional languages. The English version controls, if questions arise.
5. Even a bare bones effort may be better than nothing at all. Key policies include, at a minimum, at-will employment, non-discrimination, anti-harassment, working hours, payroll practices, vacations, holidays, summary of benefit programs, work rules, use of telephones and technology, no solicitation, conflict of interest, leaves of absence, layoffs and recalls, disciplinary process, as well as a signed acknowledgment of the policies. A signed acknowledgement of the at-will employment relationship is also recommended.
6. Be mindful of external legal requirements and developments affecting policies and their content. This includes family and medical leave and harassment and may vary from state to state. Court rulings or new laws and regulations may warrant adjustment of policies.
7. Consider whether you view your policies and handbooks to be a contract. Most employers do not want the hand- book to be a contractual embodiment of the employment relationship in order to preserve the at-will relationship.
8. Consider a separate arbitration agreement to deal with employment-related disputes. Some policies and handbooks in the past have incorporated arbitration. The safer practice is generally to have a separate agreement that meets federal and state legal standards. If done right, an arbitration agreement can be very helpful in resolving workplace issues more quickly and efficiently than in court litigation.
9. Reserve the right to change your policies at times and in ways that work for you. Business circumstances and management goals can change. Your expectations of employees, in policy language, should be modified accordingly.
10. Have your policies and handbook reviewed periodically to make sure they are current. Rules that were good several years ago may be unlawful now. Laws that have passed may help you, and there may be desirable policy adjustments as a result. A current handbook and regular management training can be tremendous assets to reduce risks in managing your workforce.