2017 EEAC BRIEFING BOOK APPENDIXeeac.org/public/EEAC Appendix Part II - NLRB-OLMS.pdf ·...

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COPYRIGHT 2017 BY EEAC. ALL RIGHTS RESERVED. NO PART OF THIS DOCUMENT MAY BE REPRODUCED

WITHOUT PERMISSION OF EEAC.

2017 EEAC BRIEFING BOOK

APPENDIXPART II / NLRB - OLMS

Copyright 2016 by the Equal Employment Advisory Council. All rights reserved. No part of this document may be reproduced without permission of EEAC.

16-099 May 20, 2016 To: EEAC Members From: Joe Lakis President Re: The NLRB: Regulating the Workplace One Handbook Rule at a Time As previously reported by EEAC, the National Labor Relations Board (NLRB, or Board), the quasi-judicial agency with responsibility for enforcing federal labor-management laws, has expanded its reach well beyond traditional limits during the Obama Administration.1 In a trio of recent high profile rulings, the Board has continued to find fault with common sense employer workplace policies spelled out in employee handbooks by finding that in each case, the policy interfered with the right of employees to engage in protected activity. As discussed in more detail below, the rulings have direct implications regarding the ability of employers to regulate employee behavior in the workplace. Background The NLRB is the federal agency charged with enforcing the 80-year-old National Labor Relations Act (NLRA), which governs employee collective bargaining and other union-management issues, such as the right of employees to engage in “protected concerted activity” for their “mutual aid and protection.”2 Despite the relatively limited scope of its authority, during the Obama Administration the Board has gone out of its way to regulate employer workplace policies by issuing rulings that go well beyond the labor relations context typically associated with the NLRA. Importantly, the NLRA applies to both union and non-union workplaces. We think it is worth noting in this context that all four of the current Board members were appointed by President Obama, and three of them have strong ties to organized labor.3 In addition, the Board’s General Counsel, another Obama appointee who prosecutes cases on behalf of the Board, previously served as the General Counsel of the International Union of Operating 1 See, for example, EEAC Memoranda 16-025 (February 5, 2016), 15-246 (December 11, 2015), 15-222 (November 6, 2015), and 15-178 (September 4, 2015). 2 See EEAC Memorandum 10-148 (August 6, 2010) for a detailed overview of the NLRA. 3 There is currently one vacancy on the five-member NLRB.

http://www.eeac.org/private/16-025.pdf






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Engineers. Perhaps not surprisingly, many of these cases end up before the Board based on complaints filed by labor unions in conjunction with a union organizing drive. In its most recent series of controversial decisions, the NLRB has continued to strike down employer policies put in place to maintain a civil workplace environment. In one case, the Board ruled that a handbook policy prohibiting conduct that impeded harmonious interactions and relationships was unlawful. In a second case, it invalidated a rule that required employees to maintain a positive work environment. And in a third case, the Board struck down a rule that prohibited offensive conduct. William Beaumont Hospital In a decision issued on April 13, 2016, a three-member panel of the Board4 considered whether certain provisions of the Hospital’s Code of Conduct were so broadly worded as to unlawfully interfere with the right of employees to discuss working conditions. Specifically, the Board found that language prohibiting conduct that “impedes harmonious interactions and relationships” and prohibiting “negative or disparaging comments about the … professional capabilities of an employee or physician to employees, physicians, patients, or visitors” was unlawfully overbroad. The Board said that such language would reasonably tend to be construed to prohibit expressions of concerns by employees over working conditions. A copy of the William Beaumont Hospital decision is available online at http://apps.nlrb.gov/link/document.aspx/09031d45820804ad. T-Mobile USA, Inc. T-Mobile maintained a provision in its employee handbook titled “Workplace Conduct” that provided in part:

T-Mobile USA, Inc. expects all employees to behave in a professional manner that promotes efficiency, productivity, and cooperation. Employees are expected to maintain a positive work environment by communicating in a manner that is conducive to effective working relationships with internal and external customers, client, co-workers, and management.

In a decision issued on April 29, 2016, the Board found that T-Mobile violated the NLRA by having a rule requiring employees to “maintain a positive work environment by communicating in a manner that is conducive to effective working relationships.” 4 The NLRB often decides cases with a three-member panel, similar to the three-judge panel rulings issued by the federal appeals courts.

http://apps.nlrb.gov/link/document.aspx/09031d45820804ad

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In prosecuting the case, the Board’s General Counsel argued that the undefined phrases “positive work environment” and “communicating in a manner that is conducive to effective working relationships” are ambiguous and vague, and would reasonably discourage employees from exercising their NLRA-protected rights. The Board agreed, finding that the language broadly restricts employee communications and is not limited to conduct that would objectively be viewed as unprotected. Rather, according to the Board, employees would reasonably understand the rule’s requirement that they communicate “in a manner that is conducive to effective working relationships” with coworkers and management as prohibiting disagreements or conflicts, including protected discussions that T-Mobile subjectively deems to be not conducive to a “positive work environment.” Moreover, the Board said employees would read the rule in context with other unlawful work rules, including ones that prohibit employees from “arguing” and making “detrimental” comments about T-Mobile. Lastly, the Board rejected T-Mobile’s argument that the “positive work environment” rule sets out the business-related objectives of “efficiency, productivity and cooperation” at the beginning and that employees would understand that the rule is not intended to restrict protected activity. Instead, according to the Board, the words do not provide employees with a basis for determining what communications would fail to contribute to “effective working relationships” or “maintain a positive work environment.” Nor do these words shed light on how T-Mobile would enforce the provision in the context of protected discussions that it views as undermining a positive work environment, according to the Board. A copy of the T-Mobile USA, Inc. decision is available online at http://apps.nlrb.gov/link/document.aspx/09031d45820a5493. Valley Health System LLC Valley Health Systems maintained a rule in its employee handbook that prohibited conduct that is “offensive” to fellow employees. Specifically, the rule provided that:

Certain rules and regulations regarding employee behavior are necessary for the efficient operation of the System and the Facility and for the benefit and protection of the rights and safety of all. Conduct that interferes with the System or Facility operations, brings discredit on the System or Facility, or is offensive to patients or fellow employees will not be tolerated.

In a decision issued on May 5, 2016, the Board found that Valley Health System violated the NLRA by maintaining the rule prohibiting conduct that is “offensive” to fellow employees. According to the Board, the rule contained a broad prohibition against “offensive” conduct, and

http://apps.nlrb.gov/link/document.aspx/09031d45820a5493

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did not include a list of the types of conduct that could be considered “offensive” such as injurious, threatening, intimidating, or coercing conduct and that therefore employees would not understand the rule’s limits. The Board focused on the inherent ambiguity of the term “offensive” in the rule and that employees would reasonably interpret it to target workplace discussions of terms and conditions of employment that fall within the NLRA’s protections. A copy of the Valley Health System decision is available online at http://apps.nlrb.gov/link/document.aspx/09031d45820b2f22. Significance As the lone dissenting Board member observed in one of the cases, it is time for the Board to abandon the test it applies to evaluate facially neutral handbook rules and replace it with a “balancing” test. According to the dissent, employees are without guidance about what is expected of them in the workplace and what types of conduct may result in discipline or discharge. Under the proposed balancing test, which has little chance of adoption by the current NLRB majority, the Board would evaluate: (1) the potential adverse impact of the rule on NLRA-protected activity, and (2) the legitimate employer justifications for maintaining the rule, and find a facially neutral rule unlawful only if the justifications are outweighed by the adverse impact on NLRA-protected activity. In the meantime, employers should expect even more rulings from the current NLRB striking down workplace policies that to most observers would be viewed as impartial and sensible. Thus, employers need to beware of endorsing “positive” conduct and banning “offensive” conduct. Employees have the right to argue with one another and employers should make sure that they are specific and narrow in the types of behavior they are trying to curtail in the workplace. Bottom line, the word “positive” is a synonym for “anti-union” in the Board’s view. Similarly, the word “offensive” is a code word for “pro-union.” Questions concerning this memorandum should be directed to Lance Gibbons at 202-629-5650.

http://apps.nlrb.gov/link/document.aspx/09031d45820b2f22


15-061 March 27, 2015 To: EEAC Members From: Joe Lakis President Re: NLRB General Counsel Issues Guidance on Application of Labor Law to

Employer Handbook Rules As EEAC has been reporting, the National Labor Relations Board (NLRB or Board) has significantly increased its scrutiny of broadly applicable employer policies for potential conflict with the rights guaranteed by federal labor law. For example, the Board has issued several decisions related to employer social media policies1 and policies related to recording or taking videos in the workplace.2 The Board has also issued decisions calling into question employer confidentiality policies associated with employment investigations.3 This foray into new areas by a quasi-judicial federal agency that previously focused its attention primarily on matters relating to union-management relations has gotten the attention of human resource professionals, many of whom, operating outside of a unionized environment, have little to no experience with the National Labor Relations Act (NLRA) and are now finding it challenging to ensure that company policies are drafted so as to minimize potential conflict with the NLRB’s interpretations of the law. Most recently, on March 18, 2015, NLRB General Counsel Richard Griffin published a guidance memorandum detailing his office’s interpretation of the application of federal labor law to dozens of employer handbook provisions. Although employers are likely to be surprised at the breadth of policies Mr. Griffin deems to be in conflict with the NLRA, the report does provide useful insight into how his office is likely to react if a handbook policy gets challenged on labor law grounds. A copy of Mr. Griffin’s memorandum is attached for your information.

1 See, for example, EEAC Memoranda 13-118 (June 14, 2013) and 14-206 (October 10, 2014). 2 See EEAC Memoranda 13-153 (August 2, 2013) and 13-244 (December 13, 2013). 3 See EEAC Memoranda 13-083 (April 26, 2013) and 13-157 (August 9, 2013).







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Background The NLRA, which is enforced by the NLRB, is the primary federal law guaranteeing most American workers the right to form labor unions for the purpose of collectively bargaining terms and conditions of employment with their employer.4 The Act’s protections also extend to the rights of employees to act collectively even outside the context of a labor union, as illustrated for example by the Board’s longstanding interpretation that the Act protects the rights of employees to discuss their pay and other terms and conditions of employment with each other, with management, and with third parties.5 The NLRB is a five-member quasi-judicial body whose members are appointed by the President subject to confirmation by the U.S. Senate. By tradition, a majority of members typically represent the party of the President in office and largely reflect his or her political philosophy. As such, the Board is in essence responsible for promulgating national labor policy, which it typically does through adjudication of individual cases involving either union representation elections or charges of unfair labor practices. The Board’s General Counsel, who is also appointed by the President, plays a critical role in the processing of unfair labor practice charges, and thus in setting policy. When a charge is filed with the agency, it is the General Counsel’s office that reviews the charge and determines whether to commence enforcement proceedings and prosecute the case, functions that are not subject to review. Cases are litigated before an Administrative Law Judge (ALJ). ALJ decisions in turn may be appealed to the full NLRB, and once the Board decides, to the federal Circuit Courts of Appeals. As part of his or her responsibility, the General Counsel also issues “Advice Memoranda,” which examine the facts of particular cases and advise the Board’s regional offices as to whether an unfair labor practice has occurred, as well as “General Counsel Memoranda,” which are issued to NLRB staff to provide policy guidance. The NLRB’s Framework for Determining Whether Employer Policies Violate the NLRA In 2004, the Board established its current standard for determining whether an employer policy violates the NLRA.6 Under this standard, even a rule that is never enforced may be found in violation as having a chilling effect on the exercise of protected rights. Not surprisingly, a rule that explicitly bars NLRA-protected activity will be found unlawful. In addition, a rule that does not explicitly bar protected activity may also be found unlawful if:

4 For a more detailed discussion of the NLRA, please refer to EEAC Memorandum 10-148 (August 6, 2010). 5 See EEAC Memorandum 07-130 (June 22, 2007). 6 Martin Luther Memorial Home, Inc. d/b/a Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004).



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• Employees would reasonably construe the rule’s language to prohibit protected activity; • The rule was promulgated in response to union or other protected activity; or • The rule was actually applied to restrict the application of protected rights.

Applying this framework, the Board has evaluated numerous employer policies in recent years. For example:

• The Board found unlawful an employer social media policy that prohibited employees from “engaging in inappropriate discussions about the Company, management, and/or coworkers” because it could be reasonably construed to prohibit discussions about protected activity by using the term “inappropriate,” which was deemed “sufficiently imprecise.”7

• The Board found unlawful an employer policy prohibiting employee disclosure of

“sensitive, proprietary, confidential, or financial information” about the employer, its customers, its clients, parents, subsidiaries, or affiliates because the restriction on disclosure of sensitive information was ambiguous and could be construed to prohibit disclosure of terms and conditions of employment.8

• An ALJ found unlawful an employer policy recommending that employee witnesses

refrain from discussing internal investigations because it could reasonably be construed to prevent employees from engaging in protected activity.9

New Griffin Memorandum Suggests Many Common Employer Handbook Rules May Violate NLRA Mr. Griffin’s March 18 General Counsel Memorandum 15-04 consists of an introduction followed by two parts. The first part discusses examples of handbook rules that the General Counsel has determined are unlawful and those that are lawful. The second part describes handbook rules from a recently settled case involving Wendy’s International LLC that the General Counsel believed were unlawful as well as the provisions negotiated through the settlement agreement that the General Counsel believes are lawful. Review of Handbook Rules Stresses Context The memorandum’s review on handbook rules addresses eight categories of employer policies that are frequently at issue before the NLRB:

7 See EEAC Memorandum 14-206 (October 10, 2014). 8 See EEAC Memorandum 14-206 (October 10, 2014). 9 See EEAC Memorandum 13-157 (August 9, 2013).




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1. Confidentiality; 2. Employee conduct toward the company and supervisors; 3. Employee conduct toward coworkers; 4. Employee interaction with third-parties; 5. Use of company logos, copyrights, and trademarks; 6. Use of photography and recording; 7. Leaving work; and 8. Conflict of interest rules.

For each category, the memo lists examples of rules Mr. Griffin believes are unlawful and rules that are lawful, providing a short explanation of his reasoning in each case. If anything is clear from Mr. Griffin’s memo, it is the emphasis placed on the context for the specific rule. For example, in the employee conduct toward coworker section, the memo finds unlawful an employer policy requiring employees to “show proper consideration for others’ privacy and for topics that may be considered objectionable or inflammatory, such as politics and religion.” According to the General Counsel, without examples or context, the rule would be reasonably construed to cover protected conversations, including unionization. The memo further opines that a rule prohibiting “derogatory comments” would be unlawfully overbroad as it could be read to prohibit criticism of the employer. However, a rule prohibiting the “use of racial slurs, derogatory comments, or insults” was viewed as lawful when contained in a section of the handbook dealing exclusively with unlawful harassment and discrimination. As another example, Mr. Griffin states that a rule prohibiting employees from answering questions from the news media and requiring media inquiries to be referred to the company’s media relations department would be unlawful. He finds this a blanket restriction on interacting with the media that is unlawfully broad because it is not limited to inquiries regarding the employer’s official positions, but could be read to cover inquiries related to protected activity. In comparison, the General Counsel opines that other policies restricting access to the media are lawful where context makes it clear that the employer policy is designed to ensure a consistent company position regarding its opinions and not a blanket prohibition on all contact with the media. Settlement With Wendy’s Further Emphasizes Context The second part of Mr. Griffin’s memo describes several provisions of an employee handbook maintained by Wendy’s International LLC that the General Counsel believed were unlawful. It also provides examples of handbook provisions agreed to as part of a settlement agreement that the General Counsel now believes are lawful. Handbook policies covered include:

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• Handbook disclosure; • Social media policy; • Conflict of interest; • Company confidential information; • Employee conduct; • No distribution/no solicitation rules; and • Use of phones and recording devices.

Some examples of provisions initially found unlawful and how they were altered to pass the General Counsel’s scrutiny include:

• The general provision prohibiting reproduction or transmission of the handbook to anyone was limited to reproduction and transmission for business or commercial ventures;

• The provision requiring employees to avoid any conflict of interest between personal

interests and those of the company was modified by providing several examples where conflicts of interest may arise or appear to arise, such as business or financial ventures that may be at variance with the interests of Wendy’s or when an employee engages in business transactions that benefit family members; and

• The provision strictly prohibiting the use of camera phones or voice recorders on

company property was modified to prohibit recordings made on working time and in work areas. An exception was also included for activity protected by the NLRA including taking pictures of health, safety, and/or working condition concerns, among other things.

Significance Mr. Griffin’s March 18 memorandum provides the most significant guidance to date as to how the NLRB’s general counsel will view employer policies such as those typically included within employee handbooks vis-á-vis violations of the NLRA. While many of the issues addressed in the memo simply articulate Mr. Griffin’s views and do not have the force and effect of law, the rationale used provides a good starting point for employers who wish to review their own policies to minimize risk of potential problems with the NLRB. Indeed, with Board scrutiny of employer policies on the rise, employers would be well advised to give consideration to conducting this review. Questions concerning this memorandum should be directed to Mike Eastman at 202-629-5650.


15-178 September 4, 2015 To: EEAC Members From: Joe Lakis President Re: NLRB Continues to Expand Its Reach, Ruling in 200 East 81st Restaurant

Corp. That Individual’s Filing of FLSA Collective Action Constitutes “Protected Activity” Under Federal Labor Law

The National Labor Relations Board (NLRB) has ruled for the first time that an employee engages in protected “concerted activity” under federal labor law when he files a collective action lawsuit under the Fair Labor Standards Act (FLSA), even if no other employee participated in the filing. The Board’s decision in 200 East 81st Restaurant Corp., d/b/a/ Beyoglu, 362 NLRB No. 152 (July 29, 2015), represents yet another attempt by the current NLRB to expand its jurisdiction beyond traditional labor-management relations matters, in this case to assert the protection of the National Labor Relations Act (NLRA) in the wage and hour arena in order to ensure employees’ access to class, joint, and collective litigation. A copy of the Board’s decision is available online at http://apps.nlrb.gov/link/document.aspx/09031d4581d3b97c. Background The five-member NLRB is the quasi-judicial body responsible for interpreting and enforcing the National Labor Relations Act, the 80-year-old federal law that governs U.S. labor-management relations. The four current members, three Democrats and one Republican, were all appointed by President Obama and confirmed by the U.S. Senate.1 In addition, the Board’s General Counsel — who selects and prosecutes cases that are brought before the Board for decision — is another Obama appointee who previously served as General Counsel of the International Union of Operating Engineers.

1 The term of another Republican member, Harry I. Johnson, III, expired on August 27, 2015.

http://apps.nlrb.gov/link/document.aspx/09031d4581d3b97c

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As EEAC has been reporting, the so-called “Obama Board” has been drawing considerable attention (and criticism from the business community and its Congressional allies) by issuing a number of controversial decisions that purport to extend the reach of the NLRA well beyond the traditional union-management context. The underlying principle relied upon by the Board in justifying its reach into nontraditional labor law matters is the NLRA’s provision granting employees the right to engage in “concerted activities for the purpose of…mutual aid or protection….”2 In 2012, the Board applied its interpretation of protected concerted activity in its highly controversial decision in D.R. Horton. There, it ruled that pre-dispute binding arbitration agreements that seek to limit employees’ ability to file class or collective lawsuits violate the NLRA.3 Although D.R. Horton was subsequently overturned by the Fifth Circuit Court of Appeals,4 the Board has continued to apply its rule finding class and collective waivers to be violations of the NLRA. Indeed, the Board has since gone one step further by ruling last year in Murphy Oil USA that an employer’s filing of a motion to compel arbitration in response to an FLSA collective action lawsuit constitutes a separate and independent violation of the NLRA.5 200 East 81st Restaurant Corp. Marjan (Mario) Arsovski worked as a waiter in a Turkish restaurant called Beyoglu. In 2013, Arsovski filed an FLSA collective action against his employer. While he had spoken to one other coworker about his intent to file a lawsuit, neither the coworker nor any other present or former coworkers consented to join the suit. Shortly thereafter, Arsovski was fired in retaliation for filing the lawsuit. He filed an unfair labor practice complaint, which the Board’s General Counsel prosecuted, and the issue eventually reached a three-member panel of the NLRB for a determination. According to the panel, there was only a single issue before it: whether Arsovski’s filing of his FLSA lawsuit constituted protected concerted activity. In its divided 2–1 decision, the Board first relied upon D.R. Horton for the proposition that the filing of a lawsuit by a group of employees is protected activity. The Board then relied on Murphy Oil for extending that doctrine to the present case by reasoning that filing a collective action, even by a single employee, contemplates and may well lead to active or effective group participation in the lawsuit.

2 29 U.S.C. § 157. 3 See EEAC Memorandum 12-006 (January 13, 2012). 4 See EEAC Memorandum 13-190 (September 27, 2013). 5 See EEAC Memorandum 15-097 (May 15, 2015).




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Applying this reasoning, the Board concluded that the filing of an employment-related class or collective action by an individual employee is an attempt to initiate, to induce, or to prepare for group action and is therefore protected by the NLRA. In dissent, Member Miscimarra disagreed “with [his] colleagues’ view that every non-NLRA class or collective action claim, arising under statutes over which the NLRB has no jurisdiction [i.e., the FLSA], triggers an automatic overlay of NLRA rights and restrictions.” In this case, Miscimarra would not have found an NLRA violation because there was no evidence that the restaurant fired Arsovski for engaging in concerted activity. Noting that “the Board was not intended to be a forum in which to rectify all the injustices of the workplace,” Miscimarra instead suggested Arsovski should have sought relief under the FLSA’s anti-retaliation provisions. Significance By interpreting protected concerted activity to now include individually-filed collective action lawsuits, the Board continues to expand its reach over workplace disputes occurring outside of a unionized environment into areas such as here, which fall within the scope of other workplace protection laws. The Board’s ultimate goal would appear to be to make itself a one-stop shop for deciding any workplace grievance, something we suspect was not envisioned by Congress when it enacted the NLRA. Questions concerning this memorandum should be directed to Mike Eastman or Rae Vann at 202-629-5650.


15-001 January 5, 2015 To: EEAC Members From: Joe Lakis President Re: NLRB Rules in Purple Communications, Inc. That Employers Have To Let

Employees Use Company Email Systems for Non-Work Purposes In a closely watched case with significant implications for many employers nationwide, the National Labor Relations Board (NLRB, or Board) has ruled that an employer who permits employees to access its email and other electronic communications systems for work-related reasons must also allow such access for non-work purposes, including union organizing activities. From a practical standpoint, the ruling erects new barriers for employers that seek to minimize email-related misconduct and work productivity issues. The controversial 3 - 2 decision by the Board in Purple Communications, Inc. overrules a 2007 NLRB decision which held that employees do not have a statutory right under federal labor law to use an employer’s equipment or media for non-work purposes, so long as the employer’s restrictions do not impinge on activity protected by the National Labor Relations Act (NLRA). According to the 3-member Board majority, all pro-union Democrats appointed by President Obama, reaffirming the 2007 ruling would have been tantamount to maintaining a “blanket rule” that only vindicates employers’ rights, while “smothering” the rights of employees. EEAC had filed a “friend-of-the-court” brief in the case, urging the Board to maintain reasonable restrictions on employee use of employer-provided email systems.1 We warned that allowing broad employee access to e-mail for non work-related reasons would pose substantial business risks that significantly outweigh any potential convenience gained as a result of such access. The two dissenting Board members agreed with this argument, and also took the 3-member majority to task for ignoring the longstanding principle that “working time is for work,” and for turning a primary method of business communications into a “permanent chat room” for non-work related matters. The decision, a copy of which is attached, is subject to appeal to federal appeals court. No appeal had been filed as of this writing.

1 See EEAC Memorandum 14-129 (June 27, 2014).


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Background Enacted in 1935, the NLRA protects the rights of employees to organize and bargain collectively and to engage in “protected concerted activity” for their mutual aid and protection. It is enforced by the quasi-judicial, five-member National Labor Relations Board (NLRB), whose members are appointed by the President and confirmed by the U.S. Senate.2 Section 7 of the NLRA guarantees the right of employees to engage in protected concerted activity “for the purpose of collective bargaining or other mutual aid or protection.” Section 8(a)(1) prohibits employers from interfering with, restraining, or coercing employees in the exercise of their Section 7 rights. While the NLRA has been interpreted generally to bar employers from adopting and enforcing rules that unduly restrict the ability of employees to communicate about matters relating to union activities and working conditions, employers traditionally have been permitted to impose reasonable restrictions on workplace communications — such as the use of company-provided email, bulletin boards, copying and fax machines, for instance — in order to protect legitimate business interests.

In 2007, the Board held in the case of Register Guard that employees do not have a statutory right under the NLRA to use an employer’s equipment or media for non-work purposes, so long as the employer’s restrictions do not discriminate against NLRA activity.3 Relying on a long line of NLRB rulings and court cases, the Board found that employers have a fundamental right to place restrictions on employee use of company property, such as email systems.

Purple Communications, Inc. The facts in this case are presented in detail in previous EEAC memos.4 Briefly, Purple Communications provides sign language interpretation to people with hearing impairments through video calls and other communication services. The company maintains 15 call centers throughout the U.S., which are staffed 24 hours a day, seven days a week. At issue is a company rule that regulates employee use of company-provided equipment, including email, computer, cell and/or smart phones and voicemail systems. The policy restricts the use of such systems for non-business related purposes, and also bars employees from using the computer, email, and other company-provided systems to engage in activities on behalf of those with “no professional or business affiliation” with Purple Communications or to send

2 Please see EEAC Memorandum 10-148 (August 6, 2010) for additional background on the NLRA and NLRB. 3 351 N.L.R.B. 1110 (2007), enf. granted, 571 F.3d 53 (D.C. Cir. 2009). 4 See EEAC Memoranda 14-129 and 14-107 (May 23, 2014).




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“uninvited email of a personal nature.” NLRB’s General Counsel Richard Griffin5 challenged the policy on the ground that it impermissibly interferes with employee rights under the NLRA. The case went to an NLRB Administrative Law Judge (ALJ), who applied Register Guard and held that the company policy was not unlawful, finding that employees do not have a statutory right to use company email for NLRA purposes. NLRB’s 3 - 2 Ruling Holds That Absent Limited “Special Circumstances,” Employer Cannot Restrict Employees From Using Company E-Mail To Exercise Their NLRA Section 7 Rights On the General Counsel’s appeal, a sharply divided NLRB has reversed the ALJ, adopting Mr. Griffin’s view that Register Guard was wrongly decided and should be overturned. The Board majority remarked that the missteps evident in Register Guard “are too serious to permit it to stand,” finding among other things that the ruling gave too much weight to the employer’s property rights. In addition, according to the 3-member majority, Register Guard did not fully appreciate the importance of email as a way for employees to engage in protected activity. Pointing to research spanning a ten-year period, the majority found that workplace email is the single most important means of communication in the business world, and that most employers regularly allow employees to use corporate email at least to some extent for personal, non-work related matters. The majority also pointed out that email has taken on even greater importance as more employees who work remotely rely heavily on technology like email as a means of communicating with other employees for both work related and non-work related purposes. Simply put, email has become, for many companies, a “natural gathering place pervasively used for employee-to-employee communications,” the majority observed. It found that Register Guard did not adequately account for the critical role that email plays in facilitating employee communications. As a result, the ruling misapplied legal precedents dealing with other media and equipment, such as employer-provided telephones or break room televisions, to draw the incorrect conclusion that employees have no right to use company email for non-work purposes. Instead, the majority concluded that a proper interpretation of the law confirms that employees who have permission to use their employer’s email system for work purposes are presumed to have the right to utilize those systems for non-work related, NLRA Section 7 purposes. Under this interpretation, an employer may rebut the presumption by pointing to “special circumstances” — such as work productivity or employee discipline — that would

5 The Board’s General Counsel is also appointed by the President. Mr. Griffin, who was appointed by President Obama, previously served as General Counsel of the International Union of Operating Engineers (IUOE) and on the board of directors for the AFL-CIO Lawyers Coordinating Committee.

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justify a restriction on employee email access. Nevertheless, because limitations on employee communication “should be no more restrictive than necessary to protect the employer’s interests,” the majority said, “it will be the rare case where special circumstances justify a total ban on nonwork email use by employees.” The Board majority emphasized that its decision is limited to the use of email by employees (not outside persons or groups) and only where the employer already has given employees access to the company’s email system. It does not require that an employer provide email access to employees where it has not already done so, nor does it prevent the employer from imposing uniform restrictions, such as “prohibiting large attachments or audio/video segments, if the employer can demonstrate that they would interfere with the email system’s efficient functioning.” The Board majority perhaps grudgingly acknowledges that employers have the right to retain the ability to monitor email use to ensure that employees are complying with any imposed restrictions, but rejects the suggestion that doing so will expose employers to claims of spying on employee’s Section 7 activity. According to the majority, the same principles that always have applied to alleged improper union surveillance in “brick and mortar” locations can also be applied to the email communications context; thus, as long as an employer does not do something unusual or out of the ordinary, its monitoring of employee email will be lawful. Finally, following its standard practice, the Board majority announced that its new rule on email use will apply retroactively to “all pending cases in whatever stage.” It determined that doing so would not unfairly disadvantage employers, because those with existing restrictions on non-work email use by employees will be able to avoid liability by pointing to “special circumstances” justifying the restriction. Dissent: Board Majority Has Created New Statutory Employee Rights Providing a possible road map for arguments in a future appeal, the two dissenting members sharply criticized the majority for creating a new employee right to corporate email use that has no rational basis in the Board’s longstanding precedents. Among other things, they observe that there has been a proliferation of other forms of electronic communications — including the use of social media, text messaging, and personal email — which have been especially effective in rallying people to various causes around the world. Thus, the idea that disallowing work email use for non-work purposes amounts to an “unreasonable impediment” to protected activity under the NLRA is misplaced. The dissent also notes that to the extent that email is a tool of communication, it is the employer’s tool purchased, designed, and operated by the employer to further the employer’s business purposes. Thus, the rule announced by the majority effectively transforms workplace

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email into a “permanent chat room” that must be paid for and maintained by the employer, whether or not it agrees with the speech being conveyed through those means. Significance

The Board’s decision in Purple Communications places new barriers in the way of any employer that seeks to minimize email-related misconduct and work productivity issues. Not only does it restrict an employer’s ability to categorically prohibit non-work use of company email (unless the employer can satisfy the largely undefined “special circumstances” test), but it also limits the employer’s unfettered right to monitor email — since such conduct could be viewed as impermissible “surveillance” of union-related activities.

For employers that already permit non-work use of email and that utilize other measures

to assess worker productivity, the ruling arguably will have little impact. For companies with jobs for which employee non-work email use can significantly interfere with job performance, however, the decision likely will make it much more difficult to prevent and correct those issues.

Looking Ahead Representatives of Purple Communications have stated publicly that the company is weighing its legal options, including whether or not to appeal the decision to federal appeals court. As always, we will continue to closely monitor and report on further developments as they occur. Questions concerning this memorandum should be directed to Rae Vann or Mike Eastman at 202-629-5650.


14-129 June 27, 2014 To: EEAC Members From: Joe Lakis President Re: EEAC’s Brief to NLRB in Purple Communications Case Argues That

Employees Do Not Have an Unrestricted Statutory Right To Use Employer Email Systems for Non-Work Purposes

EEAC has filed a friend-of-the-court brief in an important case that involves the issue of whether an employer can restrict employee use of its email system to work-related communications without violating federal labor law. Our brief to the National Labor Relations Board (NLRB) in Purple Communications, Inc. urges the agency to reaffirm a 2007 decision (Register Guard)1 in which the Board held that employees do not have a statutory right under the National Labor Relations Act (NLRA) to use an employer’s equipment or media for non-work purposes, so long as the employer’s restrictions do not discriminate against employees’ right to engage in protected concerted activity. The mere fact that the issue is up for review should be of concern to EEAC members. As we reported earlier this year, the NLRB’s unabashedly pro-union General Counsel (GC), Richard Griffin, had been looking for a case to overturn Register Guard because, in his view, any restrictions on use of an employer’s email system stand as an obstacle to the full and free exercise of employees’ statutory rights under the NLRA.2 The current NLRB, which in the name of labor law rights has expanded employee protections into areas well outside of the NLRB’s traditional jurisdiction,3 has asked for briefs from interested parties on whether it should reverse its 2007 precedent. EEAC’s brief argues that allowing broad employee access to employer communications for reasons unrelated to the particular job the employee is tasked with performing poses substantial business risks that significantly outweigh any potential convenience gained as a result

1 351 N.L.R.B. 1110 (2007), enf. granted, 571 F.3d 53 (D.C. Cir. 2009). 2 See EEAC Memorandum 14-107 (May 23, 2014). 3 See, for example, EEAC Memoranda 14-114 (June 6, 2014) and 12-197 (October 12, 2012) (employee misconduct); 13-157 (August 9, 2013) (internal investigations); 12-006 (January 13, 2012) (class arbitration); and 10-224 (December 3, 2010) (workplace social media use).







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of such access. For example, we point out that restricting an employer’s right to limit email use to work-related reasons would make it easier for employees to engage in harassing behavior and other workplace misconduct, while making it much more difficult for the employer to prevent or correct EEO violations. A copy of EEAC’s brief in Purple Communications, Inc. is available on our website at www.eeac.org/amicus. Background The NLRA protects the rights of employees to organize and bargain collectively and to engage in “protected concerted activity” for their mutual aid and protection. It is enforced by the quasi-judicial, five-member National Labor Relations Board (NLRB), whose members are appointed by the President. Of the five current NLRB members — all of whom were appointed by President Obama — three are Democrats and two are Republicans, consistent with the longstanding practice of the president’s party exercising the majority. For a more complete discussion of the facts in Purple Communications, please see EEAC Memorandum 14-107. Briefly, Purple Communications maintained two workplace rules in its employee handbook that GC Griffin challenged as interfering with employee NLRA rights to engage in protected concerted activity. The first rule prohibited certain employee conduct, and its disposition is not relevant for purposes of the issue the Board has asked interested parties to brief. The second rule regulated employee use of company-provided equipment, including email, computer, cell and/or smart phones and voicemail systems. It clearly stated that such equipment is provided and maintained “to facilitate Company business,” and should be used for business purposes only. In addition, the policy barred employees from using the computer, email, and other company-provided systems to engage in activities on behalf of those with “no professional or business affiliation” with the company, or from sending “uninvited email of a personal nature.” The case was heard before an NLRB Administrative Law Judge (ALJ), who observed that in Register Guard, the Board held that employees do not have a statutory right to use company email for NLRA purposes. Accordingly, the ALJ found that the company’s restriction on using its email and other communications systems for non-work purposes was not unlawful. The GC then appealed this finding to the full Board, which in turn has invited interested third parties to submit briefs addressing a number of specific questions, including whether the Board should overrule Register Guard outright and, if so, what standard should replace it. The Board also has asked for comments on whether and to what extent the “impact on the employer



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of employees’ use of an employer’s electronic communications technology” should factor in to its decision. EEAC’s Brief EEAC’s brief urges the Board to reaffirm its holding in Register Guard — i.e., that employees do not have a statutory right under the NLRA to use an employer’s equipment or media for non-work purposes, so long as the employer’s restrictions are applied in a nondiscriminatory manner. We contend that loosening the standard set in Register Guard would have significant, practical consequences. We begin by observing that while the NLRA has been interpreted broadly to protect the right of employees to communicate, the federal courts consistently have placed limits on those rights — especially when they infringe on the right of employers to protect their property and proprietary interests. For example, courts interpreting the Act have allowed employers to impose reasonable restrictions on workplace communications – such as use of company-provided bulletin boards, copying and fax machines — in order to protect legitimate business interests. With that context in mind, our brief argues that the Register Guard decision represents a reasonable approach to dealing with email and other workplace electronic communications, which if misused could expose employers to enterprise-wide risk not only to their business operations, but also to their employees and customers. For instance, we contend that in addition to interfering with productivity, open company email access for any non-work reason significantly increases the likelihood of damaging data security breaches that can occur when, for instance, email-transmitted viruses are introduced into a system, or when a large email attachment fatally corrupts vital files or overloads the network. Of particular concern to EEAC members, our brief argues that a rule limiting an employer’s ability to restrict corporate email use to work-related tasks also invariably would make it easier for employees to engage in workplace misconduct, while making it much more difficult to prevent or correct EEO violations. We point out that Title VII of the Civil Rights Act of 1964 bars workplace discrimination — including harassment — on the basis of race, color, religion, sex or national origin, and that in the context of sexual harassment in particular, the U.S. Supreme Court has held that employers have a duty to take proactive efforts to prevent and correct such workplace misconduct.4 Our brief observes that because many of the behaviors and actions that can create a hostile working environment can be carried out more extensively and with much greater ease via email, a broad personal email use rule would only exacerbate the risk of EEO noncompliance. 4 See Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998) and Faragher v. City of Boca Raton, 524 U.S. 775 (1998), discussed in EEAC Memorandum 98-119 (July 1, 1998).


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We conclude by arguing that any potential benefit gained by giving employees unfettered access to company email systems for personal use is far outweighed by the substantial code of conduct, cyber security, and other business risks such access would present. Accordingly, we urge the Board not to disturb Register Guard. Looking Ahead Although we would like to believe that the Board will give careful consideration to the arguments made by EEAC and the other parties urging reaffirmation of Register Guard, given the current composition of the NLRB and its track record to date, we fully expect an adverse ruling. And whatever new standard the agency decides to adopt, it is almost certain to make it more difficult for employers to effectively protect legitimate business interests and address potential workplace misconduct. In any event, once the Board issues its final decision, the losing side (presumably Purple Communications) will have the opportunity to appeal to the D.C. Circuit Court of Appeals. From a practical standpoint, however, experience tells us that the Board will enforce whatever its new standard is unless and until Congress changes the law, or the U.S. Supreme Court rules otherwise. Questions concerning this memorandum should be directed to Rae Vann at 202-629-5650.


14-107 May 23, 2014 To: EEAC Members From: Joe Lakis President Re: NLRB To Reconsider Whether Employees Have Federally-Protected Right

To Use Employer Email Systems for Personal Use The National Labor Relations Board (NLRB) is asking interested parties to submit friend-of-the-court briefs in a case which raises the issue of whether employees have a statutory right under federal labor law to use employer-provided email systems for personal use and, if so, what limits an employer may place on those rights. The NLRB is the five-member Presidentially-appointed entity that decides cases brought under the 80-year-old National Labor Relations Act (NLRA). The case is Purple Communications, 21-CA-095151, 21-RC-091531, 21-RC-091584 (NLRB April 30, 2014). Under current NLRB precedent, employers are permitted to prohibit all personal use or limit personal use of the employer’s email system as long as the employer’s policies do not violate the NLRA. As EEAC has been reporting, the current NLRB, composed of a pro-union majority appointed by President Obama, has been expanding the employee-protection reach of the NLRA into areas never before thought to be within the law's jurisdiction.1 The Purple Communications case stems from an unfair labor practice charge filed by the Communications Workers of America (CWA) alleging that a company policy restricting email use unlawfully interfered with employees’ rights to engage in NLRA-protected concerted activity. An NLRB Administrative Law Judge, applying Board precedent established in 2007, ruled for the company. The case has now gone to the full NLRB for a final determination, and the Board is asking interested parties to file briefs on the question of whether the Board should reverse that precedent. Given the case’s potential importance, EEAC is considering filing a brief that would urge the Board to maintain a standard that allows employers to restrict employee personal use of

1 See, for example, EEAC Memoranda 14-053 (March 14, 2014); 13-153 (August 2, 2013); 13-083 (April 26, 2013); and 12-223 (November 16, 2012).





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employer-provided email systems. A copy of the NLRB’s invitation for briefs is available online at http://mynlrb.nlrb.gov/link/document.aspx/09031d45816e13ce. Background Section 7 of the NLRA protects the right of employees to engage in concerted activity for their mutual aid and protection. Examples of protected concerted activity include talking about forming a labor union, but also include activities that are not directly related to union organizing matters such as discussion among employees about pay, benefits, or working conditions.2 In 2007, a sharply divided NLRB held in the case of Register Guard3 that “employees have no statutory right to use the employer’s e-mail system for Section 7 purposes,” and thus an employer’s rule prohibiting the use of such a system for “non-job-related solicitations” does not violate the NLRA. The Register Guard decision contained a strong dissent accusing the Board majority of being out of touch with the times, and was heavily criticized by employee rights advocates, who immediately began calling for its reversal. The Purple Communications case now provides that opportunity. The Purple Communications Case Purple Communications provides communication services to the hearing impaired, primarily in the form of sign language interpretation during video calls. The company maintains 15 call centers throughout the U.S., which are staffed and provide video call interpretation services 24 hours a day, seven days a week. This case arose in the context of a 2012 union organizing campaign by the CWA at seven of the company’s call centers. At issue is a workplace policy contained in the company’s employee handbook that regulates employee use of company-provided equipment, including email, computer, cell and/or smart phones, and voicemail systems. The policy states that such equipment is provided and maintained “to facilitate Company business,” and should be used for business purposes only. The policy further provides that “employees are strictly prohibited from using the computer, internet, voicemail and email systems, and other Company equipment” to, among other things, engage in “activities on behalf of organizations or persons with no professional or business affiliation with the Company” or “sending uninvited email of a personal nature.” Violations of the rule are subject to disciplinary action, up to and including termination. After the CWA filed unfair labor practice charges alleging that the policy violated employees’ NLRA Section 7 rights, the Board’s General Counsel (GC), who has made clear that

2 For a primer on the National Labor Relations Act, see EEAC Memorandum 10-148 (August 6, 2010). 3 351 NLRB 1110 (2007).


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he was looking for a case to reverse Board precedent,4 brought a formal enforcement action. Citing Register Guard, however, and noting that only the Board itself could overturn existing precedent, the ALJ ruled for the company. The GC then appealed the ALJ’s decision to the full NLRB. Board Invites Briefs on Whether It Should Reconsider Register Guard On April 30, 2014, the Board announced that it was soliciting friend-of-the-court briefs in Purple Communications in order to offer interested parties the opportunity to address whether the NLRB should reconsider its Register Guard precedent and instead hold that employees have a statutory right to use their employer’s email system for Section 7 purposes. Assuming the Board believes the answer is yes, it is also seeking input on what standards it should use related to employee access to the employer’s electronic communications systems, and whether employers should be permitted to place any restrictions on such employee use. In addition, the Board is inviting comments on how the use of employee electronic devices, social media accounts, or personal email accounts impacts the balance to be struck between employer rights and employees’ Section 7 rights to communicate about work-related matters. Briefs are due by June 16, 2014, and as indicated at the outset, EEAC is giving active consideration to filing a brief that would argue that Register Guard should not be overturned. Questions concerning this memorandum should be directed to Mike Eastman or Rae Vann at 202-629-5650.

4 See EEAC Memorandum 14-053 (March 14, 2014).



16-025 February 5, 2016 To: EEAC Members From: Joe Lakis President Re: Employer “No Recording” Policies in NLRB’s Cross-Hairs After Agency’s

Ruling in Whole Foods Market, Inc. Today’s high quality video, audio, and still photography applications for smart phones, tablets, and even wearable technology, allow users to easily capture pictures and sounds as never before. As a result, to avoid the potential disruption and chilling effect that unauthorized recordings can create in the workplace, many employers have implemented policies that prohibit employees from recording workplace conversations without express prior approval from management. Despite the common sense logic of such policies, however, the National Labor Relations Board (NLRB), the quasi-judicial agency that enforces federal labor-management law, ruled recently that work rules prohibiting recording in the workplace without prior management approval violate the National Labor Relations Act (NLRA). The ruling by the Board in Whole Foods Market, Inc., 363 NLRB No. 87 (2015), is simply the latest in a line of cases decided by the current NLRB to expand the scope of the NLRA from traditional labor law issues to other areas including FLSA collective action lawsuits, mandatory arbitration agreements, employee off-work social media use, and employer work rules.1 A copy of the Whole Foods Market decision is available on EEAC’s website at http://www.eeac.org/docs/Whole_Foods.pdf. Background The 80-year-old National Labor Relations Act (NLRA) guarantees the right of employees to form or join a union, bargain collectively through designated representatives, and engage in

1 See, for example, EEAC Memoranda 12-006 (January 13, 2012), 12-168 (August 31, 2012), 14-206 (October 10, 2014), and 15-178 (September 4, 2015).

http://www.eeac.org/docs/Whole_Foods.pdf






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other “protected concerted activity.” It also explicitly prohibits employers from interfering with, restraining, or coercing employees in the exercise of these rights.2 The NLRA covers both union and non-union workplaces. The NLRB, which enforces the Act, is a quasi-judicial independent federal agency whose members are appointed by the President and confirmed by the U.S. Senate. As a result, the NLRB tends to reflect the political philosophy of the Administration in power. All four of the current Board members, three of whom have strong ties to organized labor, were appointed by President Obama.3 In addition, the Board’s General Counsel, another Obama appointee who prosecutes cases on behalf of the Board, previously served as the General Counsel of the International Union of Operating Engineers. Whole Foods Market, Inc. Whole Foods Market (Whole Foods), which is a non-union company, maintains a General Information Guide (GIG) that is distributed to employees companywide. The GIG contains two rules prohibiting recording in the workplace. The first rule, under the subheading “Team Meetings,” states:

It is a violation of Whole Foods Market policy to record conversations, phone calls, images or company meetings with any recording device (including but not limited to a cellular telephone, PDA, digital recording device, digital camera, etc.) unless prior approval is received from your Store/Facility Team Leader, Regional President, Global Vice President or a member of the Executive Team, or unless all parties to the conversation give their consent. Violation of this policy will result in corrective action, up to and including discharge.

The second rule, under the subheading “Team Member Recordings,” states:

It is a violation of Whole Foods Market policy to record conversations with a tape recorder or other recording device (including a cell phone or any electronic device) unless prior approval is received from your store or facility leadership. The purpose of this policy is to eliminate a chilling effect on the expression of views that may exist when one person is concerned that his or her conversation with another is being secretly recorded. This concern can inhibit spontaneous and honest dialogue especially when sensitive or confidential matters are being discussed.

The United Food and Commercial Workers (UFCW) Local 19 and the Workers Organizing Committee of Chicago (WOCC) initiated this case by filing a charge with the NLRB complaining that the rules in question were unlawful because they would be interpreted by 2 See EEAC Memorandum 10-148 (August 6, 2010) for a more detailed overview of the NLRA. 3 There is currently one vacancy on the five-member NLRB.


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employees as preventing them from exercising rights protected by the NLRA. The Board’s General Counsel agreed and issued a formal complaint alleging that the no recording rules violated the NLRA. The dispute went to a hearing before an NLRB Administrative Law Judge (ALJ). At the hearing before the ALJ, the company defended its no recording policy by pointing out that an essential part of the company’s “core values” and “culture” is that employees have a voice and are free to “speak up and speak out” on many issues, work-related or not. Examples of meetings where employees have the opportunity to express views and opinions include town hall meetings, store meetings, team meetings, termination panel meetings, and team member emergency fund meetings. In addition, under the company’s open-door policy, employees are encouraged to provide input into their work lives, and Whole Foods contends that the workers “feel very comfortable” in voicing their opinions. Agreeing with the company that prohibiting its no recording policy would have a chilling effect on these open communications, the ALJ found that maintenance of the no-recording rules did not violate the NLRA.4 Specifically, the ALJ found that the rules did not explicitly restrict protected activity and that “making recordings in the workplace was not a protected right.” Additionally, the ALJ found there was no claim that the rules were adopted to deter protected activity nor applied to restrict such activity, and therefore could not reasonably be read to encompass protected activity. NLRB: No-Recording Rules Violate NLRA The Board’s General Counsel objected to the ALJ’s findings and the case went up to the NLRB for a final administrative determination. It was heard by a three-member Board panel, which in a split decision found that Whole Foods’ no-recording rules would reasonably be construed by employees to prohibit protected activity.5 Specifically, the panel majority found that photography and audio or video recordings in the workplace, as well as the posting of photographs and recordings on social media, are protected activities if the employees are acting in concert for their mutual aid and protection and no overriding employer interest is present.6 In support of this finding, it noted that NLRB case law is full of examples where photography or recording, often covert, has been an essential element in proving a violation of the NLRA, and as such, can be protected activity.

4 See EEAC Memorandum 13-244 (December 13, 2013) for a detailed discussion of the Administrative Law Judge’s decision. 5 For what it’s worth, the panel majority noted that it was not holding that all rules regulating recording are invalid. Rather, it was finding only that recordings may, under certain circumstances, constitute protected concerted activity under the NLRA and that rules that would reasonably be read by employees to prohibit protected concerted recording violate the NLRA. 6 Rio All-Suites Hotel & Casino, 362 NLRB No. 190, slip op. at 4 (2015).


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The Board also found that the rules in question would be reasonably read by employees as prohibiting activity that is protected by the NLRA. Specifically, because the rules apply regardless of the activity that the employee is engaged in, the rules would reasonably tend to chill employees in the exercise of their rights under the NLRA, according to the panel majority. The panel distinguished the Board’s earlier decision in Flagstaff Medical Center,7 in which the NLRB found that a policy prohibiting the use of cameras for recording images in a hospital setting did not violate the NLRA. The panel reasoned that in that case, employees would reasonably interpret the rule prohibiting the use of cameras not as a prohibition of protected activity but as a legitimate means to protect patient privacy issues. In contrast, the panel found that the rules maintained by Whole Foods, with their unqualified restrictions on protected activity, would reasonably chill the employees in the exercise of their rights under the NLRA, and therefore are unlawful. Dissent The dissenting panel member argued that the rules at issue in this case are intended to encourage all communications, including communications protected by the NLRA, and that the company had legitimate and substantial reasons for maintaining these rules. In support, he pointed to the rules’ stated purpose, i.e., “to encourage open communication, free exchange of ideas, spontaneous and honest dialogue and an atmosphere of trust” and “to eliminate a chilling effect on the expression of views... especially when sensitive or confidential matters are being discussed.” Significance Although the Whole Foods case is likely to be appealed to the federal courts, for now it represents another example of how employers can expect the current NLRB to continue to focus on employer work rules with a restrictive view on how such rules impact the right of employees to engage in protected concerted activity under the NLRA. As a result, employers are well advised to review their work rules giving consideration as to how they may be construed to interfere with the right of employees to engage in discussions regarding their terms and conditions of employment. Questions concerning this memorandum should be directed to Lance Gibbons at 202-629-5650.

7 357 NLRB No. 65 (2011), enforced in relevant part 715 F.3d 928 (D.C. Cir. 2013).


15-246 December 11, 2015 To: EEAC Members From: Joe Lakis President Re: D.C. Circuit, Upholding NLRB, Rules in Hyundai That Workplace

Investigation Confidentiality Rule Violates Federal Labor Law The U.S. Court of Appeals for the District of Columbia Circuit ruled recently that a workplace rule that barred employees who were witnesses in an internal misconduct investigation from discussing the investigation with other employees violated federal labor law. In so ruling, the appeals court affirmed in part a decision issued by the National Labor Relations Board (NLRB) in the case of Hyundai America Shipping Agency, Inc. EEAC members may recall that the NLRB ruled earlier this year in another case — Banner Health — that a similar rule under which an employer asked employees participating as witnesses in an HR harassment investigation not to discuss the matter with others while the investigation was ongoing also violated the rights of employees under the 80-year-old National Labor Relations Act (NLRA).1 As EEAC has been reporting, the NLRB during the Obama Administration has attempted to expand the scope of the NLRA beyond traditional union-management issues to other areas, including mandatory arbitration agreements, employee off-work social media use, and employer work rules.2 The ruling in Hyundai3 by the influential D.C. Circuit — which often is referred to as the “mini-Supreme Court” — is significant because it largely endorses a troubling Board interpretation of the NLRA, and is likely to increase the legal risk to employers who place a premium on confidentiality of workplace investigations.

1 See EEAC Memorandum 15-155 (August 7, 2015). The Board’s Banner Health ruling currently is on appeal by the company before the same D.C. Circuit. 2 See, for example, EEAC Memoranda 12-006 (January 13, 2012), 12-168 (August 31, 2012), 14-206 (October 10, 2014), and 15-178 (September 4, 2015). 3 Hyundai America Shipping Agency, Inc. v. NLRB, 805 F.3d 309 (D.C. Cir. 2015).







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A copy of the D.C. Circuit’s decision in Hyundai is available online at https://www.cadc.uscourts.gov/internet/opinions.nsf/E1C602693A9BE94385257EF50053A0D4/$file/11-1351.pdf. Background The 80-year-old National Labor Relations Act (NLRA) protects the right of employees to form or join a union, bargain collectively through designated representatives, and engage in other “protected concerted activity.” The law also prohibits employers from interfering with, restraining, or coercing employees in the exercise of these rights.4 These protections apply to both union and non-union workplaces.

The NLRA is enforced by the National Labor Relations Board, a quasi-judicial independent federal agency whose members are appointed by the President and confirmed by the U.S. Senate. Because of this, the Board tends to reflect the political philosophy of the Administration in power. All four of the current Board members were appointed by President Obama.5 Over the years, cases decided by the NLRB and the courts have reasoned that to be “concerted,” the activity engaged in must include other employees or be authorized by other employees, and typically does not occur where an employee has acted solely on his or her own. To be “protected,” the conduct engaged in must be either for the purpose of collective bargaining or for other “mutual aid or protection,” which has been defined broadly to include matters of common concern. Thus, the “protected concerted activity” covered by the NLRA includes the right of employees to discuss among themselves such topics as working conditions, terms and conditions of employment, pay, hours, and benefits. Hyundai Facts and Procedural History Hyundai America Shipping Agency, Inc.’s employee handbook outlines various work rules and requirements, including restrictions on personal use of employer-provided communications (the “electronic communications” rule); unauthorized disclosure of personnel file information (the “personnel file” rule); and performing non-work activities during work time (the “working hours” rule). The handbook also describes the company’s internal dispute resolution program, and instructs employees to lodge any complaints with their immediate supervisor or to HR, advising further that complaints to coworkers “will not resolve problems.” Though not contained in the written handbook itself, Hyundai also has an oral rule prohibiting employees from discussing 4 See EEAC Memorandum 10-148 (August 6, 2010) for a more detailed overview of the NLRA. 5 There currently is one vacancy on the five-member Board.

https://www.cadc.uscourts.gov/internet/opinions.nsf/E1C602693A9BE94385257EF50053A0D4/$file/11-1351.pdf

https://www.cadc.uscourts.gov/internet/opinions.nsf/E1C602693A9BE94385257EF50053A0D4/$file/11-1351.pdf


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with other persons any matters under investigation by Hyundai’s human resource department (the “investigative confidentiality rule”). Sandra McCullough worked for Hyundai as a customer service representative from 2004 until her discharge on August 5, 2009. According to the record, McCullough had a bombastic personality which led to a number of conflicts with other employees. She also frequently complained to management regarding what she considered to be poor working conditions. In June 2009, she sent several emails to management representatives, on which she “blind-copied” a number of her coworkers, complaining that a colleague was being subjected to sexual harassment. During the company’s internal investigation of the complaint, it learned that McCullough had engaged in financial improprieties relating to a customer refund, and then lied about it when confronted. The investigation also turned up allegations by other employees that she smoked marijuana while on the job and engaged in other instances of misbehavior. She was ultimately fired not only for mishandling the customer refund, but also for violating the company’s investigative confidentiality rule. McCullough filed an unfair labor practice charge with the NLRB accusing the company of firing her for exercising her NLRA-protected rights, and after investigating, the Board then brought formal enforcement proceedings alleging among other things that all five of the company’s work rules cited above unlawfully interfered with employees’ Section 7 rights. Although an Administrative Law Judge (ALJ) upheld McCullough’s firing on grounds that she would have been fired regardless of whether she had violated any of the challenged rules, the ALJ also found that the five work rules in question generally were overbroad and thus violated employees’ NLRA rights. On Hyundai’s appeal of that determination, the NLRB affirmed. D.C. Circuit: Overly Broad Investigative Confidentiality Rule Violates NLRA Hyundai then appealed the NLRB’s ruling to the D.C. Circuit, which affirmed in part and reversed in part. Most relevant for our purposes, the court upheld the Board’s determination that the investigative confidentiality rule was overly broad and thus violated employees’ NLRA rights.6 The court began by pointing out that a key consideration in deciding whether a work rule violates the NLRA is “whether the rule would reasonably tend to chill employees in the exercise of their statutory rights.”7

6 The D.C. Circuit also upheld the Board’s findings with respect to the “working hours” rule, and the “electronic communications” rule, but reversed with respect to the “employee complaint” rule and the “personnel file” rule. 7 See Guardsmark v. NLRB, 475 F.3d 369, 374 (D.C. Cir. 2007).

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According to the court, a rule that explicitly restricts these rights would be an example. For a rule that does not expressly restrict these rights, courts must consider whether the rule (1) reasonably can be construed by employees to restrict protected activity, (2) was adopted in response to such activity, or (3) has been used to restrict such activity. The D.C. Circuit observed that a “yes” to any of these questions puts the burden on the employer to justify the rule against an NLRA challenge. The D.C. Circuit found no evidence to suggest that the challenged rules were adopted specifically in response to protected concerted activity, or were applied to restrict such activity. Rather, the court concluded that in the case of the investigative confidentiality rule, it was facially invalid because it could reasonably be construed to restrict NLRA-protected activity. The court pointed out that the rule prohibited employees from revealing information about matters under investigation. Hyundai had argued that it had a legitimate and substantial business justification for maintaining the rule — pointing out in particular that sexual harassment enforcement guidance issued by the Equal Employment Opportunity Commission (EEOC) urges employers to keep sexual harassment complaints and investigations strictly under wraps. Although the court acknowledged that there may be legitimate business justifications for requiring confidentiality in a particular investigation, it found that Hyundai’s rule simply was too broad because it applied to all investigations. Importantly, the D.C. Circuit explicitly declined to endorse what it referred to as the Board’s “novel view” that in order to justify an investigative confidentiality rule, an employer would have to determine in advance whether or not “investigation witnesses need protection, evidence is in danger of being destroyed, testimony is in danger of being fabricated, and there is a need to prevent a cover-up.” This essentially was the position articulated by the Board in its Banner Health ruling, which as we mentioned is currently on appeal to the D.C. Circuit. Significance The D.C. Circuit’s ruling in Hyundai will only encourage the NLRB to continue to focus on broadly worded employer work rules that allegedly restrict employees’ NLRA rights, even where such rules are adopted to avoid potential conflicts with other laws. As a result, employers are well advised to review their work rules with a view towards how they might impact the right of employees to engage in discussions regarding their terms and conditions of employment. Questions concerning this memorandum should be directed to Lance Gibbons or Rae Vann at 202-629-5650.


15-155 August 7, 2015 To: EEAC Members From: Joe Lakis President Re: Trio of Recent Rulings by NLRB Underscores Agency’s Ongoing Effort To

Erode Workplace Investigation Confidentiality Rules The National Labor Relations Board (NLRB), which during the Obama Administration has expanded the reach of federal labor law well beyond its traditional limits to allow the Board to second guess employer workplace policies, has issued a trio of high profile rulings that have direct implications for the ability of employers to conduct confidential workplace investigations. The NLRB is the federal agency charged with enforcing the National Labor Relations Act (NLRA), which governs employee collective bargaining and other union-management issues, such as the right of employees to engage in “protected concerted activity” for their “mutual aid and protection.” Despite the relatively limited scope of its authority, the Board has issued a series of controversial decisions in the last few years in which it has purported to regulate other workplace issues well beyond the labor relations context typically associated with the NLRA.1 In one case, the Board ruled that the employer’s actions in barring the perpetrator and other employees from discussing an internal investigation were unlawful. In a second case, the Board invalidated a rule under which an employer asked employees participating as witnesses in an HR harassment investigation not to discuss the matter with others while the investigation was ongoing. And in the third case, the Board ruled that an employer cannot categorically refuse to turn over written witness statements to a union on demand. As a dissenting Board member observed in one of the cases, by continuing its recent trend of expanding the scope of the NLRA, the Board “has made it more difficult for employers to conduct thorough workplace investigations and has interfered with an employer’s responsibility for enforcing a wide array of federal, state and local statutes and regulations that protect individual employees.”

1 See, for example, EEAC Memorandum 15-061 (March 27, 2015).


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The three cases are discussed in more detail below. Background The NLRA is the 80-year-old federal law that establishes the rights of employees to engage (or refrain from engaging) in union-organizing and collective bargaining activities with their employers.2 Section 7 of the NLRA guarantees the right of employees to (among other things) engage in protected concerted activity “for the purpose of collective bargaining or other mutual aid or protection.” Section 8(a)(1) of the NLRA in turn prohibits employers from interfering with, restraining, or coercing employees in the exercise of their Section 7 rights. To be considered “concerted,” the activity must involve other employees advocating for a mutual benefit, rather than be directed by a single person for his or her own personal reasons. The NLRB is the five-member quasi-judicial agency that enforces the NLRA. NLRB Members are appointed by the President and confirmed by the U.S. Senate, and tend to reflect the political philosophy of the Administration in power. All five of the current Board members were appointed by President Obama, and the majority of them have strong ties to organized labor. With little likelihood that the Republican-controlled Congress will enact any Administration-supported pro-labor reforms to the NLRA to facilitate union organizing, the so-called Obama Board has targeted for enforcement any number of standard employer policies or practices that have little direct relationship to the NLRA, all in the name of NLRA rights. Of particular interest to the Board has been the use of workplace confidentiality requirements, which the Board believes impermissibly limit employee Section 7 rights.3 Fresenius USA In a three-page panel decision issued on June 24, 2015, the Board4 affirmed an earlier decision by an Administrative Law Judge (ALJ) that the company did not violate the NLRA by terminating the employment of an employee for lying about having made sexually offensive comments in opposing a union decertification campaign. In so ruling, however, the Board held that the company’s witness confidentiality rule constituted an illegal restraint on NLRA Section 7 rights and therefore was unlawful. The employee had anonymously penned vulgar and offensive comments on union newsletters left in the employee break room, purportedly as a showing of support for the union, which was facing a decertification election. Several female employees complained to

2 For additional background on the NLRA, please see EEAC Memorandum 10-148 (August 6, 2010). 3 See EEAC Memorandum 13-157 (August 9, 2013). 4 The NLRB often decides cases with a three-member panel, similar to three-judge panel rulings issued by the federal appeals courts.



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management, prompting the company to commence an investigation pursuant to its anti-harassment policy. The employee was interviewed and denied any involvement. He subsequently placed a call to his supervisor, however — whom he mistook for his union representative — admitting that he had written the comments. Despite this confession, he initially continued to deny his actions when confronted. He was then fired for having written the comments, as well as for twice lying about it. After the employee filed a complaint with the NLRB, an ALJ upheld the termination. In reviewing the ALJ decision, the Board assumed without deciding that the employee’s handwritten statements constituted protected union activity. It next considered the related question of whether Fresenius proved that it would have taken the same action — termination — in the absence of the handwritten statements. Answering in the affirmative, the Board pointed out that the employee was discharged not only for writing the offensive comments, but also for twice lying about his involvement during the company’s investigation. Importantly, the Board acknowledged that employers have a legitimate interest in investigating possible workplace misconduct, including harassment, and that it “may be appropriate” for the employer during such an investigation to question employees about the allegations, even if the conduct in question “took place during the employee’s exercise of Section 7 rights.” Here, Fresenius had a legitimate interest in investigating the handwritten notes pursuant to its obligations under Title VII and its own anti-harassment policies, the Board found. Concluding that there was no reason for the employee to believe that the employer’s questioning was designed to “pry into protected union activity,” the Board found that Fresenius did not violate the Act by firing the employee for lying during its harassment investigation. In so ruling, however, the Board pointed out that it makes every effort to limit its holding to the particular facts of this case, stating in a footnote, for instance, that “in some circumstances employees have a legitimate interest in shielding their Section 7 activity from employer inquiry, even by lying.” And although the Board ultimately concluded that Fresenius lawfully fired the employee for lying during the investigation, it found that the company still violated the NLRA by barring the perpetrator and other employees from discussing the investigation. Accordingly, the Board ordered Fresenius to cease and desist from “prohibiting employees from discussing disciplinary investigations with their coworkers.” A copy of the Fresenius decision is available online at http://apps.nlrb.gov/link/document.aspx/09031d4581cc68ab.

http://apps.nlrb.gov/link/document.aspx/09031d4581cc68ab

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Banner Health In a 2 - 1 decision issued on June 26, 2015, the Board ruled in Banner Health, that while the company did not act unlawfully when it issued a “coaching” disciplinary action to an employee for insubordination and later included negative comments on his written performance evaluation, the company did violate the NLRA by requesting that employees involved in workplace investigations not discuss the proceedings with coworkers while the investigations were pending. In a nutshell, the employee had complained to HR about sanitation procedures that he felt were inadequate. An HR investigator recorded the complaint on a standard form entitled “Confidential Investigation,” which contained a script to be used by investigators during witness interviews. The script directs the investigator to inform interviewees of the confidential nature of the investigation and to assure them that HR will keep the matter confidential. It also requests that the witness refrain from discussing the matter with coworkers during the pendency of the investigation, because “when people are talking it is difficult to do a fair investigation and separate facts from rumors.” The employee complained to the NLRB, and an ALJ, citing the company’s assertion that HR would request confidentiality based on the particular issue being investigated, such as those involving “sensitive” information, ruled that the confidentiality policy did not violate the Act. The Board concluded, however, that employees have a Section 7 right to discuss “discipline or ongoing disciplinary investigations involving themselves or coworkers,” and that such discussions are critical to workers’ ability to address workplace terms and conditions in a concerted manner. Therefore, it held that restrictions on those discussions are permissible “only where the employer shows that it has a legitimate and substantial business justification that outweighs employees’ Section 7 rights,” such as a direct threat to employees. The Board went on to say that employers bear the burden of demonstrating, on a case-by-case basis, that there exist “reasonably objective grounds for believing that the integrity of the investigation will be compromised without confidentiality.” Here, the Board found that no such “serious threats” existed to warrant the confidentiality rule, noting in particular that the employer’s “generalized” concern over keeping a lid on the investigation details was not sufficient to outweigh worker Section 7 rights to discuss the matter with one another. The dissenting Board member argued that Banner’s application of its confidentiality policy in this case was not unlawful, as it was not designed to, nor did it in fact, restrict the employee's Section 7 rights. He also observed that the Board’s restrictive treatment of workplace investigation confidentiality requirements will impede employer investigations in a variety of contexts, not just in NLRA cases, pointing out that employers will be faced with an untenable choice between either conducting investigations without demanding confidentiality

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from witnesses, or having to make a case-by-case determination in each case under investigation as to whether the need for a nondisclosure bar is compelling enough to satisfy the Board’s test. A copy of the Banner Health decision is available online at http://apps.nlrb.gov/link/document.aspx/09031d4581cd3b7b. Piedmont Gardens In American Baptist Homes of the West d/b/a Piedmont Gardens, the Board considered whether the employer violated the NLRA by refusing to turn over to the union the names, job titles, and written statements of three employee witnesses in a workplace misconduct investigation, which ultimately resulted in the accused worker’s termination. An ALJ had ruled that under Board precedent established in 1978, the employer was under no obligation to supply the union with the statements in this case. In its June 26, 2015 ruling reversing the ALJ, the Board’s pro-union majority expressly overruled that 1978 precedent, reasoning that the balancing test established by the U.S. Supreme Court in Detroit Edison v. NLRB, 440 U.S. 301 (1979), for determining the circumstances under which a union is entitled to obtain information generally from an employer should also apply to requests for witness statements. The two dissenting members hit the majority for continuing to undermine the integrity and effectiveness of workplace investigations, arguing that protecting written witness statements from disclosure helps to minimize the risk of witness intimidation, harassment and/or retaliation by the union or other employees, and pointing out further that the Board in the past has had no problem protecting the union’s right not to disclose witness statements “based on the potential for confrontations in the workplace.” Moreover, the dissenters argued that by overturning its 1978 precedent, the Board has essentially made it “impossible for employers to promise employee witnesses that their statements will remain confidential.” As a result, the practical consequence is that employees will be far less willing to come forward with information about potential problems, making it vastly more difficult for employers to avoid and correct workplace misconduct. A copy of the Piedmont Gardens decision is available online at http://apps.nlrb.gov/link/document.aspx/09031d4581cd4631.

http://apps.nlrb.gov/link/document.aspx/09031d4581cd3b7b

http://apps.nlrb.gov/link/document.aspx/09031d4581cd4631

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Significance The Obama Board’s decisions in Fresenius, Banner Health, and Piedmont Gardens are consistent with its ongoing foray into regulating workplace policies and conduct broadly in a manner that makes it increasingly more difficult for employers to enforce reasonable, common sense rules, as well as to avoid potential scrutiny under the NLRA. For example, even though the Board concluded in Fresenius that the employer was justified, under the circumstances, in discharging the employee in question for lying during a workplace investigation, it refused to find that such misconduct never is protected under the Act. It also faulted the company for expecting those involved to keep matters under wraps pending completion of its investigation — a theme it doubled-down on in both Banner Health and Piedmont Gardens. Collectively, the cases serve as a reminder that EEAC member companies should carefully consider their use of categorical confidentiality requirements or other means of limiting what the Board may consider to be protected concerted activity. While the Board did not go so far as to prohibit confidentiality policies across-the-board, it did erect significant obstacles by putting a heavy burden on employers to demonstrate a sufficiently compelling reason for insisting on nondisclosure in each case. The cases also will force employers with unionized workplaces to re-think their use of written witness statements, which until the Piedmont Gardens case were exempted from the general rule requiring disclosure of information to the union. It may be that more EEO investigations (and any resulting investigation reports) are conducted at the direction of legal counsel so as to make a privilege-based argument against disclosure. Questions concerning this memorandum should be directed to Rae Vann or Lance Gibbons at 202-629-5650.


13-157 August 9, 2013 To: EEAC Members From: Joe Lakis President Re: NLRB Administrative Law Judge, Citing Banner Health, Rules That

Boeing’s Policy Designed To Protect Confidentiality of Internal HR Investigations Is Unlawful

Last year, EEAC reported on a controversial ruling — Banner Health Care — issued by the National Labor Relations Board (NLRB) which held that an employer cannot categorically bar employees from discussing an ongoing workplace investigation, because doing so would amount to an impermissible restraint on their right to engage in protected concerted activity under the National Labor Relations Act (NLRA).1 The ruling raised immediate concerns that it would impede the ability of employers to conduct effective internal investigations. Now an NLRB Administrative Law Judge (ALJ), citing the Board’s 2012 Banner Health decision, has ruled in Boeing Company, NLRB Case No. 19-CA-089374 (ALJ July 26, 2013), that a company policy “recommending” that witnesses participating in internal HR investigations refrain from discussing the matter with anyone other than company investigators or their union representative is “clearly unlawful under Banner.” The ALJ also found unpersuasive Boeing’s asserted need to maintain the confidentiality of its HR investigations, pointing out that during the last two years, the company “has conducted over a thousand HR investigations in its Commercial Airplane group alone.” The ALJ thus seems to imply, devoid of any logic, that the more internal investigations a company conducts, the less right it has to expect its employees to keep the details of those investigations confidential. A copy of the ALJ’s ruling in Boeing is attached for your information.

1 See EEAC Memorandum 12-168 (August 31, 2012).


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Background Briefly, the NLRA is the decade’s old federal law that governs labor-management relations in the private sector.2 Section 7 of the NLRA guarantees the right of employees to engage in protected concerted activity “for the purpose of collective bargaining or other mutual aid or protection,” and Section 8(a)(1) prohibits employers from interfering with, restraining, or coercing employees in the exercise of their Section 7 rights. In recent years, the NLRB has consciously expanded employees’ Section 7 rights by going after employers with policies or practices that arguably only tangentially implicate the NLRA.3 In Fresenius, Inc., for instance, the Board held that an employer violated the Act by firing an employee who lied during an internal EEO investigation, reasoning that the employee’s underlying comments — which prompted the investigation — amounted to protected, union-related activity. Both Fresenius and Banner Health have been appealed to the federal appeals courts, where the appeals have been put on hold for now until questions as to whether the Board had the legal authority to act when it issued those rulings is resolved by the U.S. Supreme Court in the pending Noel Canning case.4 The Boeing Company Case Joanna Gamble works for Boeing in its Renton, Washington location. In May 2012, she sent an email to several managers accusing her immediate supervisor and another male co-worker of sex and age discrimination. Her email included the names of four potential witnesses, whom she also copied on the email. The company conducted an internal investigation, but interviewed only one of the four individuals mentioned as witnesses in Gamble’s email. The investigation was completed on July 2 with a finding that there was no evidence to support Gamble’s allegations. Also on July 2, Gamble sent an email to the three witnesses who had not been interviewed, in which she expressed disappointment with the company’s failure to contact them. Gamble’s email suggested that the women ask why they were not interviewed, and urged them to join her in attempting to hold the company “accountable” for the alleged discrimination. After receiving emails from the women indicating that Gamble had spoken to them, the HR official who conducted the investigation contacted Gamble and reminded her that as part of the

2 Please see EEAC Memorandum 10-148 (August 6, 2010) for a more detailed discussion of the NLRA. 3 See, for example, EEAC Memoranda 12-006 (January 13, 2006) (right to class arbitration), 12-197 (October 12, 2012) (employee’s right to lie during EEO investigation), 13-018 (January 25, 2013) (limited confidentiality of employee witness statements), and 10-224 (December 3, 2010), 11-059 (March 25, 2011), 11-156 (August 12, 2011), and 12-054 (March 16, 2012) (unlawful employer social media policies). 4 See EEAC Memorandum 13-148 (July 26, 2013).












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investigation, she signed a “confidentiality notice” agreeing not to discuss the investigation with any other employee. Gamble was also warned that a “breach” of the confidentiality pledge could lead to disciplinary action. In a reply email, Gamble admitted breaching the confidentiality agreement. Boeing then issued Gamble a written warning advising her that future noncompliance could result in more severe disciplinary action, including termination. On September 17, Gamble filed an unfair labor practice complaint with the NLRB claiming that her Section 7 rights were violated. On September 28, Boeing rescinded Gamble’s written warning. In a letter to Gamble explaining its actions, the company cited the Board’s Banner Health ruling and indicated that it was unaware of the case at the time that the warning was issued. In November, Boeing amended its “confidentiality notice” policy to “recommend” rather than “direct” employees not to share HR investigation details with other employees, except for their union representatives. Specifically, the revised policy provides:

Human Resource Generalist investigations deal with sensitive information. Because of the sensitive nature of such information, we recommend that you refrain from discussing this case with any Boeing employee other than company representatives investigating this issue or your union representative, if applicable. Doing so could impede the investigation and/or divulge confidential information to other employees.

Despite the revision to the policy, the NLRB’s General Counsel nevertheless filed a complaint alleging that both versions of the notice, as well as Boeing’s disciplinary action against Gamble, violated the NLRA. The case was decided by the ALJ based on the written record, without a hearing. ALJ, Citing Banner Health, Finds Revised Notice Policy Overly Broad in Violation of NLRA The ALJ found that by maintaining what the Board’s General Counsel characterized as an overly broad, blanket confidentiality policy, the company impermissibly infringed on its employees’ “statutory right to discuss among themselves their terms and conditions of employment and otherwise engage in concerted protected activity” — in direct contravention of the NLRB’s decision in Banner Health. Rejecting Boeing’s contention that its revised policy cured any defects found in the original, the ALJ instead found the revised policy to be “just as unlawful as the original.” He said that the substitution of the word “direct” with “recommend” could not be reasonably interpreted by employees as granting them license to disregard the policy or decline to sign it. To the extent that the revised confidentiality notice, like the original one, “would have a

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reasonable tendency to chill employees from exercising their statutory rights,” the ALJ concluded that it violated the NLRA. Based on that reasoning, the ALJ also concluded that Boeing’s initial discipline of Gamble violated the Act, as her post-investigation contact with the not-interviewed witnesses “clearly” constituted concerted protected activity. Nor did Boeing “adequately repudiate” the initial written warning, the ALJ found, because the company did not make clear to Gamble and other employees that it would not interfere with their NLRA rights. The ALJ ordered Boeing to cease and desist from “maintaining and routinely distributing or enforcing confidentiality directives, requests, and/or recommendations to employees” participating in HR investigations or disciplining employees for violating such rules. The order also requires the company to post a notice in every facility nationwide where its confidentiality policy was used outlining the ALJ’s findings and pledging its commitment to rescind Gamble’s written warning and advise her in writing that it will not be used against her. Significance To be sure, the ALJ’s ruling in Boeing is subject to further administrative and appellate review and therefore may not be the last word on this matter. Nevertheless, it continues (and arguably expands) the disturbing precedent set in the Banner Health case which compromises the ability of an employer to conduct an effective internal investigation.5 Until such time as the courts have a chance to review and perhaps overturn the NLRB’s rationale in these cases, EEAC member companies are urged to exercise care in their use of categorical confidentiality requirements or other means of limiting what the Board may consider to be protected concerted activity. Questions concerning this memorandum should be directed to Rae Vann at 202-629-5624.

5 We should note that the Board’s General Counsel earlier this year issued a not very clarifying “clarifying” advice memo describing steps an employer can take to avoid liability on this issue. See EEAC Memorandum 13-083 (April 26, 2013).




13-018 January 25, 2013 To: EEAC Members From: Jeffrey A. Norris President Re: NLRB in Piedmont Gardens Issues Another Troubling Decision Impacting

Internal Employment Investigations As EEAC has been reporting, the National Labor Relations Board — the quasi-judicial agency that enforces the National Labor Relations Act (NLRA) — has issued several troubling decisions in recent months that touch on employers’ ability to conduct effective internal employment investigations.1 In the latest example, the NLRB in American Baptist Homes of the West d/b/a Piedmont Gardens, 359 NLRB No. 46, decided on December 15, 2012, has once again invoked the NLRA in a way that potentially impacts internal investigations, and in so doing overturned a 35-year-old rule addressing whether an employer has to provide a copy of witness statements obtained during internal investigations to a labor union as it processes an employee’s grievance. As discussed in more detail below, the NLRB’s ruling in Piedmont Gardens will be of most interest to companies that have one or more collective-bargaining agreements, although the rationale used should be of concern to all employers. A copy of the NLRB’s decision in Piedmont Gardens is available online at http://mynlrb.nlrb.gov/link/document.aspx/09031d4580e8da97. Background The National Labor Relations Act (NLRA) is the primary law governing union-management relations in the United States. Section 8(a)(5) of the Act makes it unlawful for an employer to refuse to bargain with a union that is duly certified as the exclusive bargaining representative of its employees. The NLRB and the Supreme Court have long interpreted this provision to require employers to furnish a union with certain information, not only during the time of collective-bargaining, but also during the term of the collective-bargaining agreement

1 See, for example, EEAC Memoranda 12-168 (August 31, 2012) and 12-197 (October 12, 2012).

http://mynlrb.nlrb.gov/link/document.aspx/09031d4580e8da97



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(CBA) itself.2 Of particular relevance to the Piedmont case, the Board has held previously that where a union is seeking to administer CBA grievance provisions, it is generally entitled to information necessary and relevant to its representational role. In 1978, the NLRB established a bright-line exception to this general rule that applies to witness statements arising from internal investigations. In Anheuser-Busch, Inc.,3 the Board found that witness statements were “fundamentally different” from other types of information. The decision said that among the key factors differentiating witness statements from other types of information is the potential intimidation of witnesses that may occur unless statements are protected from disclosure, which would create a disincentive for witnesses to provide statements. The Board thus concluded that neither party to a collective-bargaining dispute could be required to divulge witness statements that were provided under an assurance of confidentiality in order to maintain the integrity of the grievance and arbitration process. At the same time, however, the Board’s rule did require employers to provide the union with the names and job titles of witnesses who had provided statements. Piedmont Gardens Piedmont Gardens operates a continuing care facility that provides three levels of care for its residents: independent living, assisted living, and skilled nursing. In 2011, one of the Charge Nurses, Barbara Berg, notified her human resource manager that she had seen two certified nursing assistants, including Arturo Bariuad, sleeping while on duty. The human resources manager requested that Berg provide a written statement, which she advised Berg would be confidential. Berg then provided the written statement. Later, Charge Nurse Lynda Hutton learned that Berg had reported Bariuad’s conduct to management. Hutton wrote a statement regarding her own independent observation of Bariuad sleeping on duty and slipped it under the door of the human resources manager. According to the record, no one asked Hutton to make a statement, nor was she given assurances of confidentiality. However, she assumed that it would be kept confidential. The human resources manager also approached another certified nursing assistant, Ruth Barnes, who was scheduled to work the same shift as Bariuad, to prepare a statement documenting instances when she had witnessed Bariuad sleeping on duty. The human resources manager assured Barnes that the statement would be treated as confidential. After reviewing the three statements, Piedmont terminated Bariuad’s employment. Bariuad’s union representative filed a formal grievance protecting the termination, and demanded any and all statements that were used as part of Piedmont’s internal investigation, as 2 See NLRB v. Acme Industrial Co., 385 U.S. 432 (1967). 3 237 NLRB 982.

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well as the names and job titles of all witnesses who were involved in the investigation. Piedmont refused to provide the witness statements, citing confidentiality and the 35-year-old Anheuser-Busch rule. The union then filed a complaint with the NLRB. NLRB: Witness Statements Not Deserving of Bright-Line Rule In its decision, the NLRB reviewed its precedent, but rejected the fundamental premise of Anheuser-Busch that witness statements are different from other types of information that a union might ask for. The Board acknowledged that in some cases there will be a legitimate and substantial confidentiality interest that warrants consideration. However, the Board rejected the use of a bright-line rule permitting employers to refuse to furnish witness statements. Instead, the NLRB said that so long as the union’s request for the statement is relevant to its representational duties, the employer bears the burden of proving that a legitimate and substantial confidentiality interest exists and that it outweighs the union’s need for the information. The Board further noted that this would have to be determined on a case-by-case basis. Although the Board decided not to apply the case-by-case rule retroactively, it nevertheless found that Piedmont violated the NLRA by refusing to disclose the names and titles of the three witnesses. The Board explicitly rejected Piedmont’s claim that its confidentiality policy should protect the names from disclosure and noted that the evidence did not indicate any factual basis for concern regarding workplace harassment were the information to be disclosed. The Board also found that Piedmont violated the Act by not disclosing the statement of Charge Nurse Hutton, finding that her statement was not a witness statement and was not provided under an assurance of confidentiality. Practical Implications Because Piedmont Gardens is ultimately a case involving an employer’s failure to disclose information to an existing union, part of its duty to bargain in good faith under the NLRA, the practical implications of this decision are somewhat limited to employers with existing labor unions or those where unions might be likely to be established in the future. Nevertheless, Piedmont is the latest example of a Board ruling that encroaches on an employer’s ability to conduct an effective internal investigation, and given the collective impact of these decisions, employers (union or non-union) may wish to review their practices with an eye toward the NLRA. Questions concerning this memorandum should be directed to Mike Eastman at 202-629-5625.


12-168 August 31, 2012 To: EEAC Members From: Jeffrey A. Norris President Re: NLRB Issues Another Controversial Ruling, Rules in Banner Health That

Employees Cannot Be Prohibited From Talking About an Internal Investigation

The National Labor Relations Board (NLRB, or Board), the five-member Presidentially-appointed federal agency that enforces the 77-year-old National Labor Relations Act (NLRA), has ruled that an employer cannot instruct employees not to discuss an ongoing internal investigation with each other because doing so violates their NLRA rights. The decision by the current Board — all of whose members have been appointed by President Obama1 — in Banner Health System d/b/a Banner Estrella Medical Center and James A. Navarro, Case No. 28–CA–023438 (NLRB July 30, 2012), concludes that prohibiting employees from talking to each other about an internal investigation is unlawful unless the employer has made a specific determination that employee discussions would compromise the investigation’s integrity. As EEAC has reported previously, this is not the first time the Obama-Board has strayed from traditional labor law issues in an obvious effort to expand the scope of the NLRA well-beyond how far numerous predecessor Boards were willing to go. Earlier this year, for example, the NLRB ruled that a mandatory arbitration agreement which contains a clause barring class-based or collective claims violates the NLRA.2 In addition, the NLRB’s General Counsel has delved deeply into the off-work use of social media by employees, finding much of it to be legally protected concerted activity under the NLRA.3 The Banner Health decision is likely to be an issue for employers who typically instruct employee witnesses not to discuss a case in order to protect the confidentiality of an internal investigation. This memorandum reviews the practical implications of the NLRB’s Banner 1 There currently is one vacancy. 2 See EEAC Memoranda 12-117 (June 15, 2012) and 12-006 (January 13, 2012). 3 See EEAC Memoranda 11-156 (August 12, 2011), 11-164 (August 26, 2011), 12-054 (March 16, 2012), and 12-130 (July 6, 2012).







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decision and suggests ways in which an employer can ask employees to maintain confidentiality without running afoul of the NLRB’s position. The NLRB’s decision in Banner Health is available online at http://www.nlrb.gov/case/28-CA-023438. Background The core of the NLRA is Section 7, which guarantees the right of employees to form or join a union, bargain collectively through designated representatives, and engage in other “protected concerted activity.” Section 8(a)(1) of the NLRA in turn prohibits employers from interfering with, restraining, or coercing employees in the exercise of their Section 7 rights.4 These provisions of the NLRA apply to both unionized and nonunionized workplaces. Over the years, cases decided by the NLRB and the courts have reasoned that to be “concerted,” the activity engaged in must include other employees or be authorized by other employees, and typically does not occur where an employee has acted solely on his or her own. To be “protected,” the conduct engaged in must be either for the purpose of collective-bargaining or for other “mutual aid or protection,” which has been defined broadly to include matters of common concern. Thus, the “protected concerted activity” covered by the NLRA includes the right of employees to discuss among themselves such topics as working conditions, terms and conditions of employment, pay, hours, and benefits. The Banner Health Case James Navarro worked as a sterile technician for Banner. On February 19, 2011, the hospital’s system for sterilizing surgical equipment was not working. Navarro’s supervisor told him to use an alternative method, but Navarro refused because he did not think the alternative method was adequate. The supervisor castigated Navarro for refusing to follow his instructions, and said they would talk more the following day. Navarro complained to a Human Resources consultant, telling her his side of the story and that he feared for his job. Following internal protocol, the HR consultant told Navarro not to discuss the situation with coworkers while an investigation was conducted. Later, the supervisor, the HR consultant, and another manager decided that, given the lack of any established alternative sterilization procedure, Navarro should receive a non-disciplinary “coaching” rather than discipline. Navarro then filed a complaint with the NRLB contending that the “coaching” he received was in retaliation for his discussing his concerns about proper sterilization with

4 For a basic primer on the NLRA, please see EEAC Memorandum 10-148 (August 6, 2010).

http://www.nlrb.gov/case/28-CA-023438


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coworkers and supervisors. Navarro also claimed that the HR consultant violated the NLRA by telling him not to discuss the matter with coworkers. The case went to an Administrative Law Judge (ALJ), who ruled in favor of Banner on all counts. He concluded that Banner had called for the coaching based on its belief that Navarro had been insubordinate in not following his supervisor’s instructions, and not based on any protected activity. The ALJ also ruled that the HR consultant’s suggestion that Navarro not discuss the ongoing investigation with coworkers was justified by a legitimate business reason — i.e., protecting the integrity of an ongoing investigation. NLRB: Blanket Rule Not To Discuss Ongoing Investigations With Coworkers Violates the NLRA The case then went to the NLRB, which ruled that Banner violated § 8(a)(1) of the NLRA by having a blanket rule forbidding employees from discussing an ongoing investigation with coworkers. According to the NLRB, the only way an employer can lawfully prohibit employees from discussing an ongoing investigation is by showing a legitimate business justification that outweighs employees’ Section 7 rights. Disputing the ALJ, the Board said that a general concern for protecting the integrity of an investigation is insufficient for this purpose. Rather, according to the NLRB, the employer must determine specifically, in each particular case, that (1) witnesses need protection; (2) evidence is in danger of being destroyed; (3) testimony is in danger of being fabricated; or (4) there is a need to prevent a cover-up. Since Banner did not make this showing, the NLRB concluded that it lacked a sufficient business justification for asking Navarro not to discuss the case with coworkers. The Board also rejected the idea that if an employer merely suggested to employees that they not discuss the case, rather than issuing an outright prohibition, doing so would not violate the NLRA. It said that it makes no difference whether employees are asked or told not to talk among themselves. Rather, absent an adequate business justification, even a mere request will constitute an unlawful restraint of employees’ § 7 rights to discuss work issues. Nor did it matter that Banner did not threaten Navarro with discipline if he talked about the case — it is the request, not the potential consequences, that violates the law, according to the Board. Practical Implications The NLRB’s ruling raises issues for any employer that as a practice asks employees — whether complainants, potential wrongdoers, or just witnesses — who are interviewed as part of an internal investigation not to discuss the investigation with anyone else. According to the Banner decision, absent a specific determination by the employer that it needs to forbid discussions among employees in order to protect the integrity of this particular investigation for

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one of the reasons listed, asking employees not to talk about it violates their rights under the NLRA. The decision, however, does provide specific guidance on how an employer that is concerned about the integrity of its investigation can still ask or instruct employees not to discuss an ongoing investigation without running afoul of the Board’s interpretation of the NLRA. By making a specific determination in advance that discussions among employees about the case could lead to endangering witnesses or evidence, or cause fabrication of testimony or a cover-up, the employer arguably can establish its business justification up front and still protect its investigation.

Making and Documenting the Determination Before Beginning the Witness Interview Stage

Thus, to avoid the NLRB’s disfavor, an employer should not instruct employee witnesses not to discuss the investigation unless and until the employer has made a substantiated determination that the integrity of the investigation could be compromised if they do so, and has documented that decision, with supporting information. Before beginning the witness interview phase of an internal investigation, the investigator, perhaps in consultation with legal counsel, should make a specific, reasoned determination that, based on the details of the complaint and/or other information:

(1) witnesses need protection; (2) evidence is in danger of being destroyed; (3) testimony is in danger of being fabricated; or (4) there is a need to prevent a cover-up if employees are permitted to discuss the case.

Depending upon the nature of the complaint, the employer may have good reason to be concerned that if the details leak out, someone is likely to try to hurt the complainant, shred incriminating documents or delete telltale e-mails, or get together to concoct a story. The evidence supporting this determination should be thoroughly documented as part of the investigation, against the possibility that the employer may be required, at some point in the future, to articulate its business justification for imposing the gag order. Then, and only then, should an investigator conducting witness interviews tell witnesses not to discuss the case with coworkers.

Complainant Interview Stage Likely To Be More Problematic Employers initiate internal investigations based on a variety of triggering events, but most often because an employee has brought a concern forward through an internal complaint procedure. In this situation the investigation typically begins with a thorough interview of the complainant.

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Depending upon the details of the complaint, the interviewer may begin to suspect, even at this early stage, that the integrity of the investigation could be compromised by employee discussions. At this precise point, however, the employer is discussing the case only with the complainant, and as the Banner case illustrates, instructing the complainant not to talk about the case can create problems. Accordingly, it would be prudent for the interviewer to wait and discuss the issue with legal counsel before telling the complainant not to discuss the case with coworkers. In an extreme situation, however, such as an unusually volatile or sensitive case, the interviewer might be able to make and substantiate an initial determination as to a very specific concern, articulate that concern to the complainant, suggest that he or she not discuss the case with coworkers for that stated reason, and then document this part of the interview along with the rest. Immediately after the interview, then, the interviewer should commence the investigation, and in so doing, look for any additional evidence supporting that determination and document that as well. If the follow-up reveals that the interviewer’s concern was unwarranted, he or she could contact the complainant again and lift the restriction. Questions concerning this memorandum should be directed to Rae Vann at (202) 629-5650 or Ann Reesman at [email protected].

mailto: [email protected]


15-222 November 6, 2015 To: EEAC Members From: Joe Lakis President Re: Ruling by Second Circuit in Triple Play Sports Bar Upholds NLRB’s Finding That

Employer Violated Federal Labor Law by Disciplining Employees for Facebook Posting

Last year, EEAC reported on a decision issued by the National Labor Relations Board (NLRB) in which the agency found an employer violated federal labor law by terminating two employees for their responses to an ex-employee’s Facebook post criticizing the bar’s tax withholding practices. The Board also found that the employer unlawfully enforced an overly broad Internet/Blogging policy that could be read by employees to prohibit them from engaging in legally protected activity. The Board’s 2014 ruling in Triple Play Sports Bar and Grille v. NLRB1 was recently upheld by the U.S. Court of Appeals for the Second Circuit. The appeals court agreed with the NLRB that Facebook postings which Triple Play found offensive were made for the purposes of mutual aid or protection and not to disparage the bar. The court also endorsed the NLRB’s finding that Triple Play’s Internet/Blogging Policy was overly broad.2 Given the NLRB’s interest in recent years in the issue of whether the use of social media by employees that is found to be objectionable by their employers constitutes legally protected concerted activity under federal labor law, we are likely to see more cases such as this one end up in the courts. A copy of the Second Circuit’s decision in Triple Play Sports Bar and Grille is available online at http://www.ca2.uscourts.gov/decisions/isysquery/f823700b-17f0-46f5-817b-26ea0d484fc7/1/doc/14-3284_so.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/f823700b-17f0-46f5-817b-26ea0d484fc7/1/hilite/.

1 See EEAC Memorandum 14-206 (October 10, 2014). 2 Three D, LLC d/b/a Triple Play Sports Bar & Grille v. NLRB, Nos. 14-3284, 14-3814 (2d Cir. Oct. 21, 2015). The ruling is “unpublished,” which in legal parlance means it does not have precedential effect. The appeals court denied a motion by the NLRB asking the court to “publish” the decision.

http://www.ca2.uscourts.gov/decisions/isysquery/f823700b-17f0-46f5-817b-26ea0d484fc7/1/doc/14-3284_so.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/f823700b-17f0-46f5-817b-26ea0d484fc7/1/hilite/





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Background The 80-year-old National Labor Relations Act (NLRA) guarantees the right of employees to form or join labor unions, bargain collectively through union representatives, and engage in other “protected concerted activity” for the purpose of collective bargaining or other mutual aid or protection. The NLRA also prohibits employers from interfering with, restraining, or coercing employees in the exercise of these rights.3 To be considered “concerted,” the activity engaged in must include other employees or be authorized by other employees, and typically does not include instances where an employee has acted solely on his or her own. To be “protected,” the conduct engaged in must be for the purpose of collective bargaining or must include “matters of common concern.”4 Even if it might otherwise qualify as protected concerted activity, however, if the conduct crosses the line of being disloyal or defamatory, it can lose the protection of the NLRA. In 2010, the NLRB brought its first “social media” case against an employer when it accused the company of violating the NLRA by firing an employee who posted negative comments about her supervisor on her personal “Facebook” page.5 Since then, the Board has continued to investigate alleged NLRA violations by employers involving employees’ use of social media and has issued guidance to keep the labor-management community aware of the Board’s evolving interpretations of the law.6 Triple Play Sports Bar and Grille Jillian Sanzone and Vincent Spinella were employees of Triple Play Sports Bar and Grille. In January 2011, Sanzone and at least one other employee discovered that they owed more in State income taxes than they had expected. Sanzone discussed this at work with other employees and in response to employee complaints, Triple Play planned a staff meeting in February 2011 to discuss the employees’ concerns. On January 31, 2011, Jamie LaFrance, a former employee, posted the following “status update” on her Facebook page:

Maybe someone should do the owners of Triple Play a favor and buy it from them. They can’t even do the tax paperwork correctly!!! Now I OWE money…Wtf!!!!

After this post, customers and current employees, including Spinella and Sanzone, contributed to the discussion through comments and posts. Specifically, Spinella selected the

3 See EEAC Memorandum 10-148 (August 6, 2010) for a more detailed overview of the NLRA. 4 NLRB v. Washington Aluminum Co., 370 U.S. 9 (1962). 5 See EEAC Memorandum 10-224 (December 3, 2010). 6 See EEAC Memoranda 14-206 (October 10, 2014) and 11-164 (August 26, 2011).





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“Like” option under LaFrance’s initial status update and Sanzone eventually commented, “I owe too. Such an asshole.” Triple Play’s owners eventually learned of these posts and fired Sanzone for her Facebook comment and Spinella for his “Like” selection of LaFrance’s initial status update, finding both to be disloyal. After Spinella and Sanzone filed unfair labor practice complaints with the NLRB, the Board’s General Counsel brought an enforcement action. The case eventually was heard by the NLRB on two separate but related issues: (1) whether a Facebook discussion engaged in by two employees justified their termination; and (2) whether Triple Play’s social media policy was lawful under the NLRA. The Board ruled against Triple Play on both questions. The bar then appealed that ruling to the Second Circuit.7 Second Circuit: Employer Violated NLRA The Second Circuit affirmed the NLRB on both counts, finding that Sanzone’s and Spinella’s Facebook activity did not lose the protection of the Act, and that the bar’s Internet/Blogging policy was unlawful. The Second Circuit rejected Triple Play’s argument that because the Facebook activity contained obscenities (Sanzone referring to her employer as “an asshole”), the activity lost the protection of the Act as the same court had ruled earlier in NLRB v. Starbucks Corp., 679 F.3d 70 (2d Cir. 2012). In that case, the court upheld the termination of an employee who used profanity. The Second Circuit distinguished its Starbucks decision, however, noting that the obscenities in that case were uttered in the presence of customers and that applying the same standard to the Facebook activity here could lead to the “undesirable result of chilling virtually all employee speech online.” In addition, the court pointed out that the Facebook activity in the instant case was not directed towards customers and did not reflect the employer’s brand. The Second Circuit also rejected Triple Play’s arguments that (1) Sanzone’s comment was not limited to LaFrance’s complaint that she owed money on her taxes due to a withholding error by Triple Play; and (2) Sanzone’s endorsement of LaFrance’s complaint was knowingly false. The Second Circuit agreed with the Board that the communications in the instant case were made for the purposes of mutual aid or protection and not to disparage Triple Play. The court noted that the Facebook discussion clearly disclosed the labor dispute over income tax withholdings and anyone who saw the discussion could evaluate it in light of the dispute. Moreover, according to the court, Sanzone’s comment was not defamatory because she had conversations with other employees regarding their tax concerns prior to the Facebook activity.

7 The Second Circuit hears appeals from federal trial courts in Connecticut, New York, and Vermont.

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With respect to the Internet/Blogging policy, the Second Circuit affirmed the Board’s finding that employees would reasonably interpret Triple Play’s rule as proscribing any discussions about their terms and conditions of employment as inappropriate. Significance Employers can expect that the NLRB will continue to focus on employer social media policies with a restrictive view on how such policies might impact the right of employees to engage in protected concerted activity under the NLRA. The Second Circuit’s ruling in Triple Play is only likely to reinforce that approach. As a result, at least until such time as the law becomes more settled, employers are well advised to review social media and similar policies with a view toward traditional labor law concerns, in particular the right of employees to engage in discussions regarding their terms and conditions of employment. Questions concerning this memorandum should be directed to Lance Gibbons at 202-629-5650.


14-206 October 10, 2014 To: EEAC Members From: Joe Lakis President Re: NLRB Provides More Guidance on What Agency Views To Be Labor Law

Compliant Social Media Policies As we have been reporting, the National Labor Relations Board (NLRB) has taken on the issue of whether the use of social media by employees that is found to be objectionable by their employers constitutes legally protected concerted activity under federal labor law.1 The NLRB is the independent five-member quasi-judicial agency that enforces the National Labor Relations Act (NLRA), the federal law that governs U.S. labor-management relations. Two recent NLRB developments provide some additional guidance to employers who seek to maintain compliant social media policies without generating a formal complaint from the NLRB. In Triple Play Sports Bar and Grille, the Board found the bar’s social media policy to be overly broad because it restricted the right of employees to engage in NLRA-protected conduct. Meanwhile, the agency’s “Division of Advice” separately released a copy of a two-year-old Memorandum that critiques an employer’s social media policy. Among other things, the advice memo concludes that a provision requiring employees to make clear that the views being expressed were their own and not those of their employer was lawful under the NLRA. Importantly, while the NLRB continues to stake out a position on the legality of enforcing social media policies in the context of the NLRA, to the best of our knowledge there have been no definitive court cases yet on the issue. Thus, we simply do not know at this point whether the Board’s restrictive interpretations ultimately will be upheld.

1 See, for example, EEAC Memoranda 12-054 (March 16, 2012); 11-164 (August 26, 2011); and 11-156 (August 12, 2011).





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Background The nearly 80-year-old NLRA guarantees the right of employees to form or join labor unions, bargain collectively through union representatives, and engage in other “protected concerted activity” for the purpose of collective bargaining or other mutual aid or protection. The Act also prohibits employers from interfering with, restraining, or coercing employees in the exercise of these rights.2 Over the years, cases decided by the NLRB and the courts have reasoned that to be concerted, the activity engaged in must include other employees or be authorized by other employees, and typically does not include instances where an employee has acted solely on his or her own. To be protected, the conduct engaged in must be for the purpose of collective bargaining or other “mutual aid or protection,” defined broadly by the U.S. Supreme Court to include “matters of common concern.”3 In general, disciplinary action taken by an employer under what the Board deems to be an “overly broad” company policy is considered to violate the law because it interferes with, restrains, or coerces employees in the exercise of their NLRA rights. The NLRB, whose five members are appointed by the President and confirmed by the U.S. Senate, enforces the NLRA. The Board also operates with a General Counsel, likewise a Presidential appointee, who serves as the agency’s chief prosecutor. Cases generally are initiated by someone filing an unfair labor practice (ULP) charge with one of the Board’s regional offices, where a merits determination is made by Office of General Counsel (OGC) investigators. If the investigator finds that the charge has merit, a formal complaint can be brought on behalf of the General Counsel. If it does not settle, the case is then heard by an NLRB Administrative Law Judge (ALJ), who will issue findings of fact and a recommended Decision and Order. Either party can then appeal the ALJ’s decision to the NLRB itself, which issues a final administrative determination. The Board’s decision is then appealable to federal court. The NLRB’s Office of General Counsel also maintains a Division of Advice, staffed by lawyers who provide guidance to the NLRB’s regional offices in determining whether an unfair labor practice charge has merit or should be dismissed. The Division of Advice regularly issues advice memoranda to regions regarding such cases.

2 See EEAC Memorandum 10-148 (August 6, 2010) for additional background on the NLRA. 3 NLRB v. Washington Aluminum Co., 370 U.S. 9 (1962).


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Triple Play Sports Bar The Triple Play Sports Bar4 case actually involved two separate but related issues: (1) whether a Facebook discussion engaged in by two employees justified their termination; and (2) whether the employer’s social media policy was lawful under the NLRA. A number of former and current employees discovered that they owed state income taxes for 2010 and brought this to the attention of their employer. They asked that the matter be placed on the agenda for an upcoming management meeting with the employees to discuss the company’s tax withholding policy. In the meantime, a former employee posted comments on her Facebook page expressing dissatisfaction with Triple Play’s tax withholding practices and asserted that the bar’s owners could not even do paperwork correctly. Other current and former employees, as well as some customers, joined in. One employee clicked “Like” in response to the posting and another used profanity in describing one of the bar’s owners, among other things calling him an asshole. Both employees were then terminated for their “disloyalty.” In addition, the bar’s owner threatened to file civil actions against them for defamation. In his formal complaint, the Board’s General Counsel argued that the employees had shared their concerns about terms and conditions of employment prior to the Facebook posting, and had referred to the upcoming meeting with management in one of the posts, indicating group activity. The General Counsel also argued that the employer’s threats of lawsuits against the employees for engaging in protected activity unlawfully interfered with the exercise of these rights. The case went to an ALJ, who found that the employees were seeking to initiate, induce, or prepare for group action, which was protected concerted activity because the discussion centered on conditions in the workplace. The ALJ found that the derogatory remarks made during the Facebook exchanges were not sufficiently malicious as to cause the employees in question to lose the protection of the NLRA. Triple Play appealed to the Board, which affirmed the ALJ. The bar owners did not dispute that the discharged employees’ Facebook exchange was protected concerted activity under the NLRA. They argued, however, that the employees lost the protection of the NLRA because of the derogatory remarks made during the online discussion. The Board acknowledged that it previously has held that statements made by employees that would otherwise be considered protected concerted activity may lose that protection if those statements are “maliciously untrue” or “disloyal” and “made with knowledge of their falsity or

4 Cases 34-CA-012915 and 34-CA-012916 (August 22, 2014).

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with reckless disregard for their truth or falsity.” 5 It also observed that employers have a legitimate interest in preventing the disparagement of their products, services, and reputation. The NLRB then distinguished this case from those in previous cases where the protection under the NLRA had been lost, concluding that the comments differed. In this instance, the comments clearly disclosed the existence of an ongoing labor dispute. The comments also were not being addressed to the general public but rather in a discussion taking place on an individual’s personal web page. Furthermore, the comments did not mention and were not directed at disparaging the employer’s products or services or for the purpose of undermining its reputation. With regard to whether the comments in question were “maliciously untrue” or defamatory, the Board determined that the statements associated with the profanity — that the employer had erred in its withholding of employee taxes and had poor recordkeeping practices — was not “maliciously untrue” and the profanity was merely an “epithet” by the employee who was “voicing a negative personal opinion” about the employer.6

The Bar’s Internet/Blogging Policy Found To Be Unlawfully Overbroad The General Counsel’s formal complaint also contended that the Bar’s internet/blogging policy was overbroad and unlawfully interfered with the rights of employees to engage in protected, concerted activity. In part, the policy stated:

The Company supports the free exchange of information and supports camaraderie among its employees. However, when internet blogging, chat room discussions, e-mail, text messages, or other forms of communication extend to employees revealing confidential and proprietary information about the Company, or engaging in inappropriate discussions about the Company, management, and/or co-workers, the employee may be violating the law and is subject to disciplinary action, up to and including termination of employment...

While the ALJ found that the policy was lawful and consistent with Board precedent, the Board concluded that the policy was unlawfully overbroad. The Board reasoned that the policy’s reference to “inappropriate discussions” about the company, management, or coworkers would reasonably be construed by employees to limit their right to engage in protected, concerted activity, finding the term “inappropriate” to be “sufficiently imprecise” and that employees would reasonably construe it to prohibit them from engaging in the types of discussions protected by the NLRA. 5 MasTec Advanced Technologies, 357 NLRB No. 17 (July 2011). 6 DHL Express, Inc., 355 NLRB 680, quoting Joliff v. NLRB, 513 F.3d 600 (6th Cir. 2008).

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A copy of the NLRB’s decision in Triple Play Sports Bar and Grille is available online at http://mynlrb.nlrb.gov/link/document.aspx/09031d4581862ac8. The decision is now on appeal before the U.S. Court of Appeals for the Second Circuit. Just Released Advice Memorandum Addresses Blogging and Social Networking Policies On September 19, 2014, the NLRB’s Division of Advice (Advice) publicly released a Memorandum that it had originally issued in August 2012 concerning the personal blogging and social networking policy maintained by U.S. Security Associates.7 Quoted below are relevant provisions in the policy and a summary of the Division of Advice’s rationale as to why it believes each provision is lawful or unlawful.

Disclaimer: Employees must make clear that the views expressed by them are their own and do not necessarily represent the views of [the employer]. If you identify yourself anywhere on a web site, blog, or text as an employee of [the employer], make it clear to your readers that the views you express are yours alone and that they do not necessarily reflect the views of the company. To reduce such possible confusion, we require that you put the following notice in a reasonably prominent place on your site: “The views expressed on this web site/blog are mine alone and do not necessarily reflect the views of my employer …”

Importantly, Advice opined that this provision was lawful because an employer maintains a legitimate interest in protecting itself against unauthorized postings purportedly on its behalf, and that the requirement would not unduly burden employees exercising their rights under the NLRA. Advice noted that while one could argue that the requirement would be unduly burdensome in the context of a text message, the employer’s rule requires disclaimers only on a “site” where posting a disclaimer would not be a burden.

Confidentiality of Proprietary Information: Employees must always respect confidential and proprietary information. Therefore, employees may not disclose sensitive, proprietary, confidential, or financial information about [the employer], its customers, clients, parents, subsidiaries, or affiliates.

Advice found this provision to be unlawfully broad because it could be construed to prohibit disclosure of information concerning terms and conditions of employment. Advice also found the restriction on release of sensitive information to be ambiguous and unlawfully overbroad based on its use in context.

7 Note that Advice Memoranda are not necessarily released to the public upon issuance.

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Advance Written Permission: Do not link or otherwise refer to the company web site without obtaining the advance written permission of the company.

Advice opined that this provision was unlawfully overbroad because it would hinder employees in discussing working conditions if they could not refer third parties to the employer’s web site to support, and to garner support for, their position. Advice also noted that since company websites are public, any employer interest in restricting employees from referencing its website is outweighed by employees’ interest in engaging in protected activity.

Posting Offensive Material: Employees must obey the law. Therefore, employees should not post any material that is obscene, defamatory, profane, discriminatory, libelous, threatening, harassing, abusive, hateful, embarrassing to another person or entity, about the company or our customers or clients or that violates company policy or the privacy rights of another.

According to Advice, the primary problem with this provision is its restriction on posting embarrassing material. Employees could reasonably construe this provision as preventing them from discussing work-related complaints, particularly those involving management. Therefore, Advice concluded the provision is unlawful.

Respect for Co-Workers and Others: Employees must respect their readers and fellow employees. Employees are free to express themselves, but they must do so in a respectful manner. Therefore, employees should not post any material containing slurs, derogatory insults, obscenities, or that violates the privacy of another.

While the Division of Advice found that the employer’s requirement for employees to express themselves in a respectful manner was lawful, this provision was unlawfully overbroad because it seeks to restrict communication that violates the privacy of another. According to Advice, such a rule would be viewed by employees as precluding them from sharing with coworkers or labor organizations information about coworkers’ terms and conditions of employment, even if that information was obtained innocently. A copy of the Advice Memorandum is available at: http://mynlrb.nlrb.gov/link/document.aspx/09031d45818cf227. Significance As illustrated by the developments discussed in this memorandum, the NLRB takes the position that employer social media policies that on their face appear to make eminent good sense do not necessarily pass muster with the Board’s restrictive views on how they might impact the right of employees to engage in protected concerted activity under the NLRA. Unless and until such time as the federal courts conclude otherwise, employers are well advised to

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review social media and similar policies with a view toward traditional labor law concerns, in particular the right of employees to engage in discussions about terms and conditions of employment. Questions concerning this memorandum should be directed to Judy Lampley and Mike Eastman at 202-629-5650.


13-153 August 2, 2013 To: EEAC Members From: Joe Lakis President Re: NLRB Cautions Employers on Barring Employees From Posting Worksite

Photos/Videos on Personal Social Media Websites The National Labor Relations Board (NLRB) has issued employer guidance once again on the agency’s constantly evolving position with respect to when, in its view, the use of social media by employees that is found to be objectionable by their employers constitutes protected concerted activity under the National Labor Relations Act (NLRA).1 In the latest “Advice Memorandum” to be released by the Board’s Office of General Counsel (OGC), the agency takes on employer policies that prohibit employees from taking photographs and/or videos at the worksite and posting them on their personal social media websites. The Advice Memorandum takes the position that a blanket policy that prohibits employees from posting photographs or video of the company’s worksite which may disclose confidential information about the company is “overly-broad” and could reasonably be construed to chill the exercise of NLRA “Section 7” rights. The Advice Memorandum, prepared in March 2012, was released by the NLRB recently as the result of a Freedom of Information Act (FOIA) request. A copy is available on the NLRB’s website at http://www.nlrb.gov/cases-decisions/advice-memos/recently-released. Background The core provision of the NLRA is Section 7, which guarantees the right of employees to form or join a union, bargain collectively through designated representatives, and engage in other “protected concerted activity” for the purpose of collective-bargaining or other mutual aid or

1 See EEAC Memoranda 11-156 (August 12, 2011), 11-164 (August 26, 2011), 12-054 (March 16, 2012), 12-130 (July 6, 2012), and 13-118 (June 14, 2013).

http://www.nlrb.gov/cases-decisions/advice-memos/recently-released







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protection. Section 8(a)(1) of the NLRA in turn prohibits employers from interfering with, restraining, or coercing employees in the exercise of their Section 7 rights.2 Over the years, cases decided by the NLRB and the courts have concluded that to be concerted, the activity engaged in must include other employees or be authorized by other employees, and typically does not include instances where an employee has acted solely on his or her own. To be protected, the conduct engaged in must be for the purpose of collective bargaining or other “mutual aid or protection,” defined broadly by the U.S. Supreme Court to include “matters of common concern.”3 With the now ubiquitous use of social media, including by individuals to comment on their work, either favorably or unfavorably, the NLRB has increasingly been scrutinizing employer policies that impose restrictions on what employees can post. For example, the Board previously has indicated that the use in policies of ambiguous terms such as “disrespectful,” “unprofessional,” and “inappropriate” conduct or “personal,” “confidential,” or “non-public” information, absent specific examples, are “overly broad” and could be understood to violate employees’ Section 7 rights. The NLRB’s Office of General Counsel, through its Division of Advice, provides legal guidance to NLRB field offices on emerging enforcement issues. “Advice Memoranda” are prepared upon request on specific matters to help the field determine whether a company should be charged with violating the NLRA. While not legally binding, an Advice Memorandum signals the Board’s enforcement position on the issue being addressed. Advice Memorandum: Broadly Worded Policy Barring Employees From Posting Worksite Photos/Videos Can Interfere With Right To Engage in Protected Concerted Activity The OGC’s Advice Memorandum is in response to a request for guidance on a social media policy drafted and distributed by Giant Food, LLC. Under its policy, the company prohibits employees from using the company’s proprietary logo, trademark, or graphics, or taking or using “photographs or video of the Company’s premises, processes, operations, or products, which includes confidential information owned by the Company, unless [the employee has] received the Company’s prior written approval.” The policy also instructs employees that they have an obligation to protect confidential, non-public information to which they might have access in the course of their work. According to the Memorandum, policies that are unclear on their applicability to Section 7 activities and contain no language that would limit the context of the policy or “clarify to employees that the rule does not restrict Section 7 rights” are unlawful. However, policies that 2 See EEAC Memorandum 10-148 (August 6, 2010) for a more detailed discussion of the NLRA. 3 See N.L.R.B. v. Washington Aluminum Co., 370 U.S. 9 (1962).


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“clarify and restrict” the scope of the policy and provide explicit examples of illegal or unprotected conduct so that the policy could not reasonably be construed to interfere with employees’ Section 7 rights would not be unlawful. The Memorandum goes on to explain that Giant’s policy prohibiting the use of the company name, logos, trademarks, or worksite pictures or videos could lead an employee to believe that he or she is not permitted to use or post these images on social media websites even if they are related to protected concerted activity, such as the discussion of work conditions, pay, union activity, or picketing. In addition, absent limiting language and specific examples or details, the OGC advises that the terms “confidential” and “non-public” information as used in Giant’s social media policy are so vague that they easily can be construed by employees to include information involving their working conditions. Lastly, the Memorandum once again cautions employers that overly-broad policies cannot be “saved” by the inclusion in the policy of a general disclaimer that the policy does not apply to Section 7 activity and that those protected activities are in fact permitted. Significance This latest “social media” guidance from the NLRB, as with the agency’s previous declarations, poses a possible conflict for employers, in this case from attempting to protect employees from transmitting potentially inappropriate pictures, invading the privacy of their coworkers, and/or disclosing confidential company information or workplace conditions. Given the NLRB’s stance on the issue, employers may want to review EEAC’s attached compilation of NLRB Advice Memoranda for guidance and determine whether their policies can be made “less broad” by providing specific examples of prohibited photos or videos such as those that could be viewed as obscene, threatening, intimidating, harassing, or intended to harm someone’s reputation. Questions concerning this memorandum should be directed to Judy Lampley at 202-629-5696.

Don'ts Reasons Do's EEAC Memo #

Policies that have the effect of deterring employees from exercising their protected rights Policy would interfere with, restrain, or coerce employees in the exercise of their Section 7 rightsPolicies that provide clear examples of conduct that would violate the policy, so employees could not construe that protected activity is restricted 13-153

12-05411-164Policies that use broad terms such as “disrespectful,” “unprofessional,” "offensive," "demeaning," "abusive," and “inappropriate” conduct in company social media policies without more explanation

These terms are considered “overly broad” and therefore in violation of employees’ rights under the NLRAPolicies that provide specific examples or put into context particular prohibitions, and include a statement that specifically excepts Section 7 13-153

12-05411-15611-059Policies prohibiting sharing or conversations about confidential information

Policy could have the effect of discouraging employees from discussing the terms and conditions of their employmentPolicies that describe and give examples of the type of confidential information the policy is referring to 13-153

12-054

Policies requiring employees to ensure that their posts are "completely accurate and not misleading"Terms such as "completely accurate and not misleading" are overbroad, and could imply discussions about the employers' policies or its treatment of employees are included

Policies that require employee posts not be maliciously false13-153

NLRB's Social Media Do's and Don'ts

Page 1


NLRB's Social Media Do's and Don'tsPolicies prohibiting sharing of "non-public information" such as "personal information about another employee"

This policy could be interpreted as applying to discussions with other employees about the terms and conditions of employmentPolicies prohibiting posting information directly or indirectly related to the safety performance of the employer's systems, components of its product, or information that has been declared secret, confidential, or attorney client privileged 13-153

11-164

Policies that caution employees about "friending" coworkers Policy considered overbroad, and could discourage communications among coworkers about their terms and conditions of employmentPolicies that prohibit employees from pressuring coworkers to connect or communicate with them via social media 13-153

11-164Policies requiring employees to report any "unusual or inappropriate internal social media activity"Policy could be construed to mean employees must "report to management the union activities of other employees"

Policies that discuss online harassment and bullying as well as discrimination and retaliation13-153

Page 2


NLRB's Social Media Do's and Don'tsPolicies that instruct employees not to "pick a fight" and to avoid discussions that could be considered objectionable or inflammatory

Policy could be seen as prohibiting discussions about work conditions or unionism, either of which could be the subject of heated and controversial discussions

Policies that encourage employees to be respectful in their postings and provide examples, such as "malicous, obscene, threatening or intimidating" posts; "posts that could contribute to a hostile work environment on the basis of race, sex, disabilty, religion, or any other status protected by law or company policy;" or posts "meant to intentionally harm someone's reputation"13-153Policies that state a preference for employees to use internal means to resolve complaints rather than going online

Policy could "have the probable effect of precluding or inhibiting employees" from exercising their rights under the NLRA13-153Policies that prohibit employees from expressing their personal opinions regarding the workplace, work satisfaction or disatisfaction, wages, hours, or work conditions with nonemployees

Section 7 protects employee communications to the public that are part of and related to an ongoing labor dispute13-153

Page 3


NLRB's Social Media Do's and Don'tsPolicies restricitng employees from making "disparaging or defamatory" comments about the company, its employees, officers, directors, vendors, customers, partners, affiliates, or any of their products or services

Policy could be interpreted as including discussions involving Section 7 protected activities13-153

Policies that prohibit employees from publishing any representation about the company without prior approvalPolicy could preclude employees from discussing confidential terms and conditions of employment without first getting permission from their bosses to do so

Policies that require employees who engage in social networking activities for personal reasons to indicate that their views are their own and do not reflect those of their employer 13-15312-054

Policies that prohibit the use of the company name or logo outside the course of businessEmployees engaging in protected concerted activity have the right to use the company’s name and logo in connection with a protest involving the terms and conditions of employment

Policies asking employees to respect copyrights, trademarks and other intellectual property, including those belonging to the employer 13-15312-05411-164

Policies that prohibit employees from including the company name, address or other company information on their social media profilesOne of the main functions of an individual’s personal profile page is to assist them in finding and communicating with their coworkers. According to the OGC, this prohibition was “particularly harmful to their Section 7 rights.”

Policies prohibiting employees from referring to the employer by name and publishing any promotional content with examples of promotional content12-054 11-164 Page 4


NLRB's Social Media Do's and Don'tsPolicies that warn employees to "avoid harming the image and integrity of the company"

Policy could reasonably be contrued to prohibit employees criticism of employer labor policies or its treatment of employeesPolicies that require employees to obtain permission from the organization's president or designated agent before posting anything on the Internet "in the name of the organization or in a manner that could be attributed to the organization"

13-153Policies prohibiting employees from commenting on any legal matters that the company is/was involved in Restricts employees from discussing the protected subject of potential claims against the employer13-153Policies that require prior authorization before any employee communicates with the media, written or oral, about anything having to do with the company

Restriction is too broad and would include employees' communications regarding terms and conditions of employment and ongoing labor disputes 13-15312-054

Policies that restrict employee communication with government agenciesPolicy could be interpreted to mean that an employee cannot contact the NLRB about the employee's terms and conditions of employment

13-153

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NLRB's Social Media Do's and Don'tsAssume stating that the policy "will be administered in compliance with applicable laws and regulations" is a catch all "savings clause"

Including such language is not enough to cure other problems and ambiguities within the policy13-153

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13-118 June 14, 2013 To: EEAC Members From: Joe Lakis President Re: Latest NLRB Advice Memorandum on Employee Use of Social Media Finds

Facebook Rant Did Not Constitute Protected Activity The issue of whether an employer violates federal labor law by taking adverse action against an employee who uses social media to post comments the employer finds objectionable first arose in 2010, when the National Labor Relations Board (NLRB, or Board) decided to prosecute a company that fired a worker for posting negative comments about her supervisor on her personal Facebook page.1 In essence, the Board accused the company of violating the National Labor Relations Act (NLRA) by punishing the employee for engaging in protected “concerted activity.” Since then, periodic Advice Memoranda issued by the NLRB’s Office of General Counsel (OGC) have provided guidance to employers on the agency’s still evolving position with respect to when, in its view, the off-work use of social media by employees that is found to be objectionable by their employers constitutes protected concerted activity.2 In a welcome sign that the NLRB will not always find employees’ use of social media to be protected, no matter how objectionable the comments may be, the OGC’s most recent Advice memo draws the line when the employee’s comments amount to no more than personal gripes. Importantly, the OGC found that there was no “thread” connecting the employees offensive comments to those of any coworkers pertaining to shared concerns about working conditions. A copy of the OGC’s May 8, 2013, Advice Memorandum is available on the NLRB’s website at http://www.nlrb.gov/case/04-CA-094222.

1 See EEAC Memorandum 10-224 (December 3, 2010). 2 See EEAC Memoranda 11-156 (August 12, 2011) and 11-164 (August 26, 2011).





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Background The heart of the NLRA is Section 7, which guarantees the right of employees to form or join a union, bargain collectively through designated representatives, and engage in other “protected concerted activity” for the purpose of collective-bargaining or other mutual aid or protection. Section 8(a)(1) of the NLRA in turn prohibits employers from interfering with, restraining, or coercing employees in the exercise of their Section 7 rights.3 As a result of case law developed over a long period of time, to be “concerted,” the activity engaged in must include other employees or be authorized by other employees, and typically does not occur where an employee has acted solely on his or her own. To be “protected,” the conduct engaged in must be for the purpose of collective-bargaining or “matters of common concern.”4 The NLRB’s Office of the General Counsel (OGC) contains a Division of Advice, whose purpose is to provide legal guidance to NLRB field offices on emerging enforcement issues. The Division prepares “Advice Memoranda” upon request to help the field determine whether a company should be charged with violating the NLRA. While not legally binding, an Advice Memo clearly articulates the NLRB’s enforcement position on the issue being addressed. The Skinsmart Dermatology Case The Advice Memo here responds to a request for guidance by the field in a case involving an unfair labor practice charge against Skinsmart Dermatology. The charging party is a former employee who was terminated for negative remarks she made about the company during a Facebook discussion with current and former coworkers. She, along with nine other individuals (employees and former employees of Skinsmart) had participated in a “group message” started by a former employee who wanted to organize a social event. The first hour of the conversation focused on planning the social event, after which the conversation turned to general work-related issues. During this part of the discussion, she related to the group remarks she allegedly had made earlier in the day to a supervisor telling the supervisor to “back the freak off.” She also remarked that Skinsmart was “full of s---... They seem to be staying away from me, you know I don’t bite my [tongue] anymore, F---. FIRE ME ... Make my day....” None of the other current Skinsmart employees participated in this part of the conversation, prompting her to comment that she felt like she had been deserted and no one was there “to make me laugh.” One of the other current employees then replied that she made the charging party laugh and added “it’s getting bad there [at Skinsmart], it’s just annoying as hell. 3 See EEAC Memorandum 10-148 (August 6, 2010) for a more detailed discussion of the NLRA. 4 See NLRB v. Washington Aluminum Co., 370 U.S. 9 (1962).


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It’s always some dumb s--- going on.” There was no further discussion. Skinsmart subsequently learned about the employee’s remarks from one of the other employees who took part in the discussion, and fired her. Advice Memo Concludes That Remarks Were Merely Individual Gripes, and Did Not Constitute Protected Concerted Activity The OGC’s Advice Memo concludes that Skinsmart did not violate the NLRA in terminating the charging party because her Facebook remarks were simply expressions of her personal dislike of the people she worked for and amounted to nothing more than gripes. According to the OGC, the charging party’s comments did not involve shared employee concerns over terms and conditions of employment and therefore did not constitute protected concerted activity. The OGC states that activity is “concerted” if the activity engaged in is “with or on the authority of other employees, and not solely by and on behalf of the employee herself.” In this case, there was no discussion among the Facebook conversation participants of shared concerns that needed to be brought to management’s attention. Rather, the OGC concluded that this was a single employee “mere[ly] griping” with no intention of acting upon her complaints. Moreover, the OGC determined that there was nothing in the Facebook exchange to indicate that the other employees participating in the discussion interpreted the charging party’s remarks as shared concerns over working conditions. Even the one coworker’s comment about the workplace being “annoying as hell” was viewed by the OGC as “ambiguous and bore no relation to the charging party’s earlier comments.” Thus, the OGC found that as there was no “thread” connecting the charging party’s comments about Skinsmart to those of any coworkers pertaining to shared concerns about working conditions, her comments were not protected concerted activity and her termination did not violate the NLRA. Significance Although most of the guidance employers have received from the NLRB thus far on the issue of social media and the NLRA are through OGC Advice Memoranda rather than actual NLRB decisions, the memos do present a pretty clear picture of the Board’s evolving position on employees’ use of social media, and where in the agency’s view that activity is protected concerted activity under the NLRA. Based on our analysis of the advice issued thus far, common factors the agency is looking for when assessing whether employee conduct is protected concerted activity include the following:

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• Did the posting actually include negative comments about the employer, the supervisor, or the employee’s working conditions?

• Was the employee’s posting an outgrowth of previous employee group discussion or

activity?

• Did coworkers respond to the negative comments?

• Were the coworkers’ responses also negative and/or critical of the employer, supervisor, or working conditions?

As always, EEAC will continue to closely monitor this issue and report on further developments of significance as they occur. Questions concerning this memorandum should be directed to Judy Lampley at 202-629-5696.


12-212 November 2, 2012 To: EEAC Members From: Jeffrey A. Norris President Re: First Rulings by National Labor Relations Board on Legality of Social

Media Conduct Policies Offer Mixed Bag for Employers The National Labor Relations Board (NLRB, or Board), the ostensibly independent quasi-judicial federal agency that enforces the National Labor Relations Act,1 has issued its first two decisions concerning the NLRA as applied to employer policies that attempt to regulate employees’ social media postings. In Costco Wholesale Corporation,2 the Board found that the company’s social media policy prohibiting employees from communicating anything that would defame the company or damage its reputation was “overly broad” and interfered with employees’ NLRA right to engage in protected concerted activity. In contrast, in Karl Knauz Motors,3 the Board ruled that an employee’s Facebook posting of a non-job-related incident that took place during working hours was not protected activity, and thus the employee’s termination was lawful. As EEAC has been reporting, the NLRB’s Office of the General Counsel (OGC) has been issuing periodic reports over the last couple of years regarding the agency’s position with respect to whether the use of social media by employees that is found to be objectionable by their employers constitutes legally protected concerted activity under the NLRA. The reports have included the OGC’s assessment in cases involving complaints filed under the law as to whether applicable employer policies likely violate the NLRA.4 The Board’s rulings in Costco and Karl Knauz Motors are the first formal determinations.

1 The Board’s five members are appointed by the President and are supposed to be confirmed by the U.S. Senate. A majority of the current members, all appointed by President Obama, are serving under controversial “recess” appointments that by-pass the Senate confirmation process. 2 358 N.L.R.B. No. 106 (Sept. 7, 2012). 3 358 N.L.R.B. No. 164 (Sept. 28, 2012). 4 See, for example, EEAC Memoranda 12-054 (March 16, 2012); 11-164 (August 26, 2011); and 11-156 (August 12, 2011).





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Copies of the NLRB’s Costco and Karl Knauz Motors decisions are available online at http://www.nlrb.gov/case/34-CA-012421 and http://www.nlrb.gov/category/case-number/13-ca-046452. Background The heart of the NLRA is Section 7, which guarantees the right of employees to form or join labor organizations, bargain collectively through union representatives, and engage in other “protected concerted activity” for the purpose of collective bargaining or other mutual aid or protection. Section 8(a)(1) of the NLRA in turn prohibits employers from interfering with, restraining, or coercing employees in the exercise of their “Section 7” rights.5 Sections 7 and 8(a)(1) protect both union and nonunion employees. Over the years, cases decided by the NLRB and the courts have reasoned that to be concerted, the activity engaged in must include other employees or be authorized by other employees, and typically does not include instances where an employee has acted solely on his or her own. To be protected, the conduct engaged in must be for the purpose of collective bargaining or other “mutual aid or protection,” defined broadly by the U.S. Supreme Court to include “matters of common concern.”6 In general, disciplinary action taken by an employer under what the Board deems to be an “overly broad” company policy is considered to violate Section 8(a)(1) because it interferes with, restrains, or coerces employees in the exercise of their Section 7 rights. Under NLRB procedures, the OGC makes an initial determination as to whether or not there is a reasonable factual basis to believe that an unfair labor practice has been committed and will issue a complaint. The case is then heard by an NLRB Administrative Law Judge (ALJ), who will issue findings of fact and a Decision and Order. Either party can then appeal the ALJ’s decision to the NLRB, which issues a final administrative determination. The Board’s decision is appealable to the federal courts. Costco Wholesale Corporation In Costco, the Board concluded that the company’s social media policy was overly broad and in violation of Section 8(a)(1). The issue came before the Board in the context of a complaint that did not involve alleged misuse of social media by a Costco employee, but rather raised a general challenge to language in the company’s employee handbook that prohibited employees from posting electronically any statements that “damage the Company, defame any individual or damage any person’s reputation, or violate the policies outlined in the Costco Employee Agreement.” 5 See EEAC Memorandum 10-148 (August 6, 2010) for additional background on the NLRA. 6 N.L.R.B. v. Washington Aluminum Co., 370 U.S. 9 (1962).


http://www.nlrb.gov/category/case-number/13-ca-046452

http://www.nlrb.gov/category/case-number/13-ca-046452


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The ALJ found that this language in Costco’s policy could not be interpreted to include activity protected by Section 7, but the NLRB disagreed, stating that it could have the tendency to “chill” the exercise of employee rights under Section 7 and that the language “clearly” encompassed concerted communications protesting the company’s treatment of its employees. According to the NLRB, without further clarification as to whether Section 7 activity was excepted from the policy or not, employees reasonably could conclude that Costco was prohibiting such protected activity. While the Board inferred that the electronic communications provisions in Costco’s policy might have been acceptable if the policy had explicitly stated that the prohibition did not refer to Section 7 activity, the OGC has taken the position that including such a “savings clause” will not salvage an otherwise overly broad or ambiguous policy.7 Karl Knauz Motors In Karl Knauz Motors, the NLRB found that a car salesman’s objectionable Facebook postings regarding an incident that took place at another dealership were not protected concerted activity and that his employer did not violate the NLRA when it fired him for making the postings. The NLRB failed to address, however, a second and arguably more important issue as to whether the same salesman’s Facebook postings about an event sponsored by his own employer were protected concerted activity and thus covered under the NLRA. Karl Knauz Motors hosted a sales event for the launch of a new model car and the dealership was providing test drives and food. The food consisted of hot dogs, chips, cookies, and water, which the salespersons complained about to Knauz as being inadequate. Later, the salespersons discussed among themselves how disappointed they were in how their employer had handled the event and how the inexpensive food and beverages could negatively impact their sales and commissions. One of the salesmen took pictures of the event, including the food table, as well as an incident that had occurred earlier in the day when a salesperson at a neighboring dealership accidently drove a car into an outdoor pond. Along with posting both sets of pictures, he posted snide comments about the sales event and the way that Knauz Motors handled it. After the dealership found out about the postings, it fired him. The OGC subsequently brought an unfair labor practice complaint, alleging that the salesperson was engaged in protected concerted activity when he posted the comments and pictures about the sales event.8 The ALJ agreed, reasoning that because a number of employees

7 OGC Operations Memorandum, January 24, 2012, http://www.nlrb.gov/news/acting-general-counsel-issues-second-social-media-report. 8 See EEAC Memorandum 11-164.


http://www.nlrb.gov/news/acting-general-counsel-issues-second-social-media-report


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were critical of the event and had discussed it among themselves, the salesman was not acting alone when he posted the pictures and comments on Facebook. Rather, the ALJ concluded the postings were a “direct outgrowth” of the earlier discussions among the salespersons, and because the discussions concerned terms and conditions of employment — their sales and commissions — the activity was protected concerted activity. However, the NLRB never addressed this part of the case. Instead, the Board simply agreed with the part of the ALJ’s decision that the salesman’s separate Facebook postings of the neighboring dealership’s car-in-the-pond incident were unprotected activity, as he had not discussed the postings with other employees and they had no connection to his terms or conditions of employment. The dealership’s termination of the salesman for posting embarrassing pictures of a potentially dangerous situation were justified and not protected under the NLRA, according to the NLRB. Questions concerning this memorandum should be directed to Judy Lampley or Mike Eastman at 202-629-5650.


12-130 July 6, 2012 To: EEAC Members From: Jeffrey A. Norris President Re: NLRB Issues Updated Guidance on Labor Law Implications of Employers’

Social Media Policies As EEAC has been reporting, over the past year the General Counsel of the National Labor Relations Board (NLRB) has been issuing periodic reports regarding the agency’s position with respect to whether the off-work use of social media by employees that is found to be objectionable by their employers constitutes legally protected concerted activity under the National Labor Relations Act (NLRA). The reports have included the agency’s assessment of specific employer policies and whether in its view they violate the NLRA.1 The NLRB’s Office of General Counsel (OGC) recently released another update in the form of an “Operations Management Memo,” again focusing on seven different employers’ social media policies. Please note that the last case discussed, the only one which in the OGC’s view could be construed as lawful, contains the full text of the company’s NLRB-approved policy. This memorandum provides an overview of the latest OGC social media report. In addition, EEAC, based on this and previous reports, has compiled a list of NLRB “do’s and don’ts” regarding social media policies that we thought might be useful for our members in drafting their own social media policies. Please keep in mind that the OGC’s guidance simply represents the agency’s interpretation of the law. Over time, as cases work their way up through the courts, we will see definitive rulings that will test the legal strength of these interpretations. A complete copy of the latest OGC report, including the NLRB-approved text of the employer policy discussed in Case Study 7, is available on the NLRB’s website at http://www.nlrb.gov/print/4100.

1 See EEAC Memoranda 11-156 (August 12, 2011), 11-164 (August 26, 2011), and 12-054 (March 16, 2012).

http://www.nlrb.gov/print/4100




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Background The NLRB is the five-member quasi-judicial agency that enforces the NLRA, the nearly 90-year-old federal law that governs labor-management relations in the private sector. The heart of the NLRA is Section 7, which guarantees the right of employees to form or join labor organizations, bargain collectively through designated representatives, and engage in other protected concerted activity (emphasis added) “for the purpose of collective bargaining or other mutual aid or protection.” Section 8(a)(1) of the NLRA in turn prohibits employers from interfering with, restraining, or coercing employees in the exercise of their Section 7 rights.2 These provisions of the NLRA apply to both unionized and nonunionized workplaces. OGC: Key to Lawful Social Media Policies Is Providing Specific Examples of Prohibited Conduct The OGC’s May 30, 2012 “Operations Management Memo” discusses seven separate employer social media policies. The first six are cases where the OGC determined that the polices were either “overly broad” or “ambiguous,” and thus violated the NLRA. The seventh case discusses an employer’s social media policy (text included) that the OGC has determined does not violate the NLRA. According to the OGC, in general a company policy that has a “chilling effect” on employees rights under the NLRA — in other words, a policy that has the effect of deterring employees from exercising their protected rights — would be considered by the NLRB to violate Section 8(a)(1) because the policy interferes with, restrains, or coerces employees in the exercise of their Section 7 rights. In contrast, the OGC indicates that a policy that provides clear examples of conduct that would violate the rule or policy so that employees could in no way construe that protected activity is being restricted would not be unlawful under the NLRA. Discussed in more detail below are the seven cases included in the OGC’s latest report, the last of which contains a policy that passed the OGC’s muster. Case 1: Large Retailer In the first case discussed, the OGC deemed unlawful provisions in a retail employer’s social media policy that dealt with employees’ use of social media technology in the workplace and placed restrictions on employees’ communication of confidential information.

2 See EEAC Memorandum 10-148 (August 6, 2010) for additional background on the NLRA.


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The employer’s policy provided guidelines for employees using online social networking sites such as Facebook or YouTube for the purpose of commenting on their employer or employment. Specifically, the policy stated that employees may not “release confidential guest, team member or company information….” But because the policy did not further describe or provide examples of the type of confidential information to which it referred, the OGC concluded that an employee could interpret this restriction to mean that he or she was prohibited from discussing their or other employees’ terms and conditions of employment in violation of exercising their Section 7 rights. Additionally, the policy stated that employees should not share confidential information with anyone (which the OGC interpreted to include coworkers) unless the person needed the information in order to perform his or her job. The policy also prohibited employees from having conversations about confidential information in the break room, at home, or in public places. Again, the OGC found that these restrictions would have the effect of unlawfully discouraging employees from discussing the terms and conditions of their employment. In addition, because these aspects of the policy were unlawful, threatening disciplinary action up to and including termination for those individuals who violated these portions of the policy also was unlawful. The OGC concluded its critique by noting that if these portions of the policy were removed, the rest of the policy, which cautioned employees about being tricked into divulging confidential information, could not reasonably be construed to apply to Section 7 protected activities. Case 2: Large Manufacturer In this case, the employer, a large manufacturer, had a social media policy that included a variety of phrases and words that the OGC concluded could have the effect of chilling employees’ exercise of their Section 7 rights. First, the policy required employees to ensure that their posts were “completely accurate and not misleading and that they do not reveal non-public information.” The OGC asserts that without more guidance as to the meaning of the words or specific examples, the term “completely accurate and not misleading” is overbroad and could be interpreted as applying to discussions about the employer’s policies or its treatment of its employees. According to the OGC, unless statements of this type made by employees are maliciously false, the statements are protected communications under Section 7. The OGC also took umbrage with the policy’s prohibition against the sharing of “non-public information” and the use of “personal information about another employee” as an example of non-public information. According to the OGC, this prohibition could certainly be interpreted as applying to any discussions with other employees about the terms and conditions

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of employment. However, the OGC did approve of two examples of “non-public information” provided in the policy. According to the report, the company’s prohibition on posting information directly or indirectly related to the safety performance of the employer’s systems or components of its product or information that has been declared secret, confidential, or attorney-client privileged is lawful and does not violate the Section 7 rights of employees. The manufacturer’s policy also required employees to check with its legal department if an employee was in doubt as to whether certain information fell into the prohibited category. The OGC points out in its report that requiring employees “to secure permission from an employer as a precondition to engaging in Section 7 activities violates the [NLRA].” The OGC also found to be unlawful the policy’s prohibition on employees posting photos, videos, music, quotes, personal information about the company or its employees, or the company logo. The OGC interpreted these provisions to mean, for example, that an employee could not post photos or a video of employees engaging in Section 7 activities, including photos or videos of picket signs including the company logo. Further provisions of the policy that the OGC concluded could be interpreted as chilling employees’ rights under Section 7 included the use of overbroad and/or ambiguous instructions, such as “offensive, demeaning, abusive or inappropriate remarks are as out of place online as they are offline” and “communications with coworkers ... that would be inappropriate in the workplace are also inappropriate online.” Neither is specific enough, and without examples, could be interpreted to refer to discussions among coworkers of their terms and conditions of employment. The company’s policy also cautioned employees about “friending” coworkers, which the OGC again found overbroad and could discourage communications among coworkers about their terms and conditions of employment. Additionally, the OGC concluded that the company’s requirement that employees report any “unusual or inappropriate internal social media activity” in effect required employees “to report to management the union activities of other employees” and interfered with their Section 7 rights. Finally, the OGC stated that the company’s attempt to preclude its social media policy from including Section 7 activities by stating that the policy “will be administered in compliance with applicable laws and regulations (including Section 7 of the [NLRA])” was not enough to cure the other problems and ambiguities in the policy.

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Case 3: Health Care Provider In the third case analyzed in the OGC’s report, the employer, a large health care services provider, had a social media policy that prohibited employees from disclosing on a social media or other online site “personal information about [the company’s] employees, contingent workers, customers, customers’ patients, providers, business partners or third parties.” The OGC had no problem with the employer prohibiting this conduct as it pertained to customers, customers’ patients, providers, business partners or third parties, but did find unlawful the restriction on discussions including personal information between employees or contingent workers. According to the OGC, the employer’s prohibition against commenting on any legal matters that the company was involved in, including pending litigation or disputes, again restricted employees from discussing the protected subject of potential claims against the employer. The policy also instructed employees not to “pick fights” and to avoid discussions that could be considered objectionable or inflammatory. This instruction was seen by the OGC as prohibiting discussions about work conditions or unionism, either of which could be the subject of heated and controversial discussions. For the most part, the OGC did not find fault with the employer’s policy asking employees to respect copyrights, trademarks and other intellectual property, including those belonging to the employer. However, the OGC did find unlawful the requirement that employees seek permission before using the company logo, brand or trademark for the same reasons as in Case 2. This employer’s social media policy also encouraged employees to resolve complaints about work internally with coworkers, supervisors and managers, rather than airing their complaints online. While the OGC had no problem with the suggestion that employees use internal procedures, it did conclude that by stating a preference for employees to use internal means rather than going online, it would “have the probable effect of precluding or inhibiting employees” from exercising their Section 7 rights. In an interesting twist, the OGC did not have a problem with the employer’s threat of “consequences to [employees’] action in the social media world” provided the employer removed the previously discussed unlawful provisions from the policy. By removing the offending provisions, according to the OGC, this provision would no longer have an unlawful “coercive” effect.

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Case 4: Large Manufacturer In this case involving another manufacturing company, the OGC found that certain portions of the employer’s social media policy addressing protection of company information and the expression of employees’ opinions could be viewed as interfering or restricting employees’ Section 7 rights. In contrast, the OGC found that the part of the policy that discussed online harassment and bullying was acceptable. With regard to company information, the policy prohibited employees from posting online any information regarding the employer that could be deemed “material non-public information” or “confidential or proprietary” information. The policy went on to provide a number of specific examples, such as information about company performance, cost increases, and customer wins and losses. Nevertheless, the OGC concluded that because this type of information could be relevant in collective-bargaining negotiations regarding employees’ wages and other benefits, the policy’s prohibition could be interpreted as restricting employee discussions that would otherwise be protected by the NLRA. The OGC also took issue with the policy’s warning to employees to “avoid harming the image and integrity of the company” as this too could be reasonably construed to prohibit employees’ criticism of employer labor policies or treatment of employees. With regard to restrictions on employees’ electronic communications, the policy specifically stated that employees are permitted to express personal opinions regarding the workplace, work satisfaction or dissatisfaction, wages, hours, or work conditions, with other employees, but cannot do so with nonemployees. According to the OGC, the NLRB has long recognized that “Section 7 protects employee communications to the public that are part of and related to an ongoing labor dispute.” As such, the policy’s restriction limiting communications of this type to between employees only was viewed as an infringement of their NLRA rights.3 The OGC did, however, find acceptable the policy’s provision that “harassment, bullying, discrimination, or retaliation that would not be permissible in the workplace is not permissible between co-workers online.” According to the OGC, by including the words “bullying” and “discrimination,” this prohibition could not reasonably be interpreted to include protected Section 7 activities. Case 5: Not-for-Profit The fifth case examined the provisions of a not-for-profit’s social media policy that required employees to report any “unsolicited or inappropriate electronic communications” which they received. Once again, the OGC found this restriction to be overbroad and a possible 3 Valley Hospital Medical Center, 351 N.L.R.B. 1250 (2007), enfd. sub nom. Nevada Service Employees Union, Local 1107 v. NLRB, 358 F. App’x 783 (9th Cir. 2009).

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restraint of employees’ Section 7 rights as it could include any communications regarding terms and conditions of employment between employees, a union, or third parties. The policy also required employees to obtain permission from the organization’s president or his or her designated agent before posting anything on the Internet “in the name of the [organization] or in a manner that could be attributed to the [organization].” These provisions the OGC found lawful as they could not reasonably be construed to restrict employees’ Section 7 rights. Case 6: Telecommunications Company This case involved the social media and communications policy of a telecommunications company. Once again, the OGC found that this employer’s policy restricting employees from making “disparaging or defamatory” comments about the company, its employees, officers, directors, vendors, customers, partners, affiliates, or any of their products or services, was unlawful as it could be interpreted as including discussions involving Section 7 protected activities. The OGC also found overbroad and unlawful the company’s entire policy restricting employee contact with the media. Namely, the policy required an employee to get prior authorization from the company’s corporate communications division before communicating in any manner, written or oral, with the media, including speeches or conferences, about anything having to do with the company. While the OGC recognized a company’s need to control the release of certain information about the employer to the media, such a broad restriction also would include employees’ communications regarding terms and conditions of employment and ongoing labor disputes, all of which is Section 7 protected activity. The OGC took particular umbrage with the employer’s restriction on employees’ communications with government agencies, particularly as it might apply to the NLRB. The OGC acknowledged that employers have a legitimate need to control the message it communicates to government agencies and regulators, but may not do so to the extent that it prohibits all employee contact with government agencies and regulators. For example, this type of prohibition could be interpreted to mean that an employee could not contact the NLRB about the employee’s terms and conditions of employment. There were two aspects of the employer’s policy that the OGC found lawful. The first involved the company’s prohibition on employees representing in a posting that any opinion or statement made by the employee was the opinion or statement of the employer. The second required employees to “expressly state that their postings are ‘my own and do not represent [employer’s] positions, strategies or opinions.’” According to the OGC, these restrictions could not be construed as prohibiting employees from discussing their own views of their terms and conditions of employment and employers have a “legitimate need” for a disclaimer protecting

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itself from unauthorized postings by employees concerning the employer or its products and services.

Case 7: Large Retailer In the last case discussed, the revised social media policy of a large retailer was found to be lawful because it was unambiguous and, more importantly, it provided sufficient examples of prohibited conduct so that when taken in context could not be confused by employees as restricting Section 7 protected activities. For example, the policy prohibits “inappropriate postings that may include discriminatory remarks, harassment and threats of violence or similar inappropriate or unlawful conduct.” This language, according to the OGC, passes muster because, by including the words “discrimination” and “threats of violence,” the prohibition is put into context and employees will understand it to not relate to Section 7 activities. Additionally, when encouraging employees to be respectful in their postings, the policy again provides sufficient examples of what it considers to be disrespectful conduct, such as “malicious, obscene, threatening or intimidating” postings, “posts that could contribute to a hostile work environment on the basis of race, sex, disability, religion or any other status protected by law or company policy,” or posts “meant to intentionally harm someone’s reputation.” When prohibiting disclosure of confidential information, the policy included examples of the types of information it was referring to, such as information about company systems, processes, products, technology, internal reports, and other business-related communications. Summary In general, it would appear that many of the policy provisions deemed by the OGC as unlawful might have been salvageable if they also had clarified particular terms using specific examples of the types of conduct or information that was prohibited. Simply including “savings clause” language in the policy to the effect that the policy will not be construed or applied in violation of the NLRA was not enough. Questions concerning this memorandum should be directed to Judy Lampley at 202-629-5696.

Don'ts Reasons Do'sEEAC

Memo #

Policies that have the effect of deterring

employees from exercising their

protected rights

Policy would interfere with, restrain,

or coerce employees in the exercise of

their Section 7 rights

Policies that provide clear examples of

conduct that would violate the policy, so

employees could not construe that

protected activity is restricted

12-130

12-054

11-164

Policies that use broad terms such as

“disrespectful,” “unprofessional,”

"offensive," "demeaning," "abusive,"

and “inappropriate” conduct in

company social media policies without

more explanation

These terms are considered “overly

broad” and therefore in violation of

employees’ rights under the NLRA

Policies that provide specific examples

or put into context particular

prohibitions, and include a statement

that specifically excepts Section 7

12-130

12-054

11-156

11-059

Policies prohibiting sharing or

conversations about confidential

information

Policy could have the effect of

discouraging employees from

discussing the terms and conditions of

their employment

Policies that describe and give examples

of the type of confidential information

the policy is referring to 12-130

12-054

Policies requiring employees to ensure

that their posts are "completely

accurate and not misleading"

Terms such as "completely accurate

and not misleading" are overbroad,

and could imply discussions about the

employers' policies or its treatment of

employees are included

Policies that require employee posts not

be maliciously false

12-130


Page 1


Memo #


Policies prohibiting sharing of "non-

public information" such as "personal

information about another employee"

This policy could be interpreted as

applying to discussions with other

employees about the terms and

conditions of employment

Policies prohibiting posting information

directly or indirectly related to the safety

performance of the employer's systems,

components of its product, or

information that has been declared

secret, confidential, or attorney client

privileged 12-130

11-164

Policies that caution employees about

"friending" coworkers

Policy considered overbroad, and

could discourage communications

among coworkers about their terms

and conditions of employment

Policies that prohibit employees from

pressuring coworkers to connect or

communicate with them via social media12-130

11-164

Policies requiring employees to report

any "unusual or inappropriate internal

social media activity"

Policy could be construed to mean

employees must "report to

management the union activities of

other employees"

Policies that discuss online harassment

and bullying as well as discrimination

and retaliation

12-130

Page 2


Memo #


Policies that instruct employees not to

"pick a fight" and to avoid discussions

that could be considered objectionable

or inflammatory

Policy could be seen as prohibiting

discussions about work conditions or

unionism, either of which could be the

subject of heated and controversial

discussions

Policies that encourage employees to be

respectful in their postings and provide

examples, such as "malicious, obscene,

threatening or intimidating" posts;

"posts that could contribute to a hostile

work environment on the basis of race,

sex, disability, religion, or any other

status protected by law or company

policy"; or posts "meant to intentionally

harm someone's reputation"12-130

Policies that state a preference for

employees to use internal means to

resolve complaints rather than going

online

Policy could "have the probable effect

of precluding or inhibiting employees"

from exercising their rights under the

NLRA12-130


expressing their personal opinions

regarding the workplace, work

satisfaction or dissatisfaction, wages,

hours, or work conditions with

nonemployees

Section 7 protects employee

communications to the public that are

part of and related to an ongoing labor

dispute

12-130

Page 3


Memo #


Policies restricting employees from

making "disparaging or defamatory"

comments about the company, its

employees, officers, directors, vendors,

customers, partners, affiliates, or any of

their products or services

Policy could be interpreted as

including discussions involving Section

7 protected activities

12-130


publishing any representation about

the company without prior approval

Policy could preclude employees from

discussing confidential terms and

conditions of employment without first

getting permission from their bosses to

do so

Policies that require employees who

engage in social networking activities for

personal reasons to indicate that their

views are their own and do not reflect

those of their employer 12-130

12-054

Policies that prohibit the use of the

company name or logo outside the

course of business

Employees engaging in protected

concerted activity have the right to use

the company’s name and logo in

connection with a protest involving the

terms and conditions of employment

Policies asking employees to respect

copyrights, trademarks and other

intellectual property, including those

belonging to the employer12-130

12-054

11-164

Page 4


Memo #



including the company name, address

or other company information on their

social media profiles

One of the main functions of an

individual’s personal profile page is to

assist them in finding and

communicating with their coworkers.

According to the OGC, this prohibition

was “particularly harmful to their

Section 7 rights.”

Policies prohibiting employees from

referring to the employer by name and

publishing any promotional content with

examples of promotional content12-054

11-164

Policies that warn employees to "avoid

harming the image and integrity of the

company"

Policy could reasonably be construed

to prohibit employees criticism of

employer labor policies or its

treatment of employees

Policies that require employees to obtain

permission from the organization's

president or designated agent before

posting anything on the Internet "in the

name of the organization or in a manner

that could be attributed to the

organization"12-130

Policies prohibiting employees from

commenting on any legal matters that

the company is/was involved in

Restricts employees from discussing

the protected subject of potential

claims against the employer

12-130

Policies that require prior

authorization before any employee

communicates with the media, written

or oral, about anything having to do

with the company

Restriction is too broad and would

include employees' communications

regarding terms and conditions of

employment and ongoing labor

disputes 12-130

12-054

Page 5


Memo #


Policies that restrict employee

communication with government

agencies

Policy could be interpreted to mean

that an employee cannot contact the

NLRB about the employee's terms and

conditions of employment12-130

Assume stating that the policy "will be

administered in compliance with

applicable laws and regulations" is a

catch all "savings clause"

Including such language is not enough

to cure other problems and

ambiguities within the policy

12-130

Page 6


12-054 March 16, 2012 To: EEAC Members From: Jeffrey A. Norris President Re: NLRB Issues More Guidance on Employees’ Use of Social Media and

NLRA-Protected Activity The National Labor Relations Board (NLRB) has issued additional guidance on the agency’s position with respect to whether the off-work use of social media by employees that is found to be objectionable by their employers constitutes protected concerted activity under the National Labor Relations Act (NLRA). Prepared by the Board’s Office of General Counsel (OGC), this most recent “Operations Management Memo” on employees’ use of social media details fourteen cases, several of which include the OGC’s assessment of the applicable employer’s social media policy. The issue of whether an employer violates the NLRA by taking adverse action against an employee who posts objectionable comments using social media first came up in 2010 when the Board filed a complaint against a company that fired an employee who posted negative comments about her supervisor on her personal “Facebook” page.1 Since then, as the NLRB has continued to investigate alleged NLRA violations by employers involving employees’ use of social media, the OGC has issued periodic reports on these activities intended to keep interested parties informed of the Board’s activities.2 In general, from the cases discussed in this latest update, the use of broad terms such as “disrespectful,” “unprofessional,” and “inappropriate” conduct in company social media policies, absent specific examples, were found by the OGC to be “overly broad” and therefore in violation of employees’ rights under the NLRA. The report also shows that the OGC continues to draw a line between employees whose use of social media involves airing complaints about the terms and conditions of their employment, in contrast to employees who are simply griping about their jobs.

1 See EEAC Memorandum 10-224 (December 3, 2010). 2 See EEAC Memoranda 11-156 (August 12, 2011) and 11-164 (August 26, 2011).




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A copy of the OGC’s January 25, 2012 “Operations Management Memo” is available on the NLRB’s website at http://www.nlrb.gov/news/acting-general-counsel-issues-second-social-media-report. Background The NLRB is the five-member quasi-judicial agency that enforces the NLRA, the nation’s basic labor-management relations law. The heart of the NLRA is Section 7, which guarantees the right of employees to form or join labor organizations, bargain collectively through designated representatives, and engage in other protected concerted activity (emphasis added) “for the purpose of collective bargaining or other mutual aid or protection.” Section 8(a)(1) of the NLRA in turn prohibits employers from interfering with, restraining, or coercing employees in the exercise of their Section 7 rights.3 Over the years, cases decided by the NLRB and the courts have reasoned that to be “concerted,” the activity engaged in must include other employees or be authorized by other employees, and typically does not occur where an employee has acted solely on his or her own. To be “protected,” the conduct engaged in must be for the purpose of collective bargaining or other “mutual aid or protection,” defined broadly by the U.S. Supreme Court to including “matters of common concern.”4 In general, disciplinary action taken by an employer under “overly broad” company policies is considered by the Board to violate Section 8(a)(1) because it interferes with, restrains, or coerces employees in the exercise of their Section 7 rights. According to the OGC, however, an employer will not be liable for discipline taken under a overly broad policy if the employer can establish that the employee’s conduct actually interfered with the employee’s or co-worker’s work, or the operations of the employer. In that case, the employer is considered to be disciplining the employee because of the interference, not the concerted activity. The OGC’s Latest “Operations Management Memo” on Social Media Cases The OGC’s January 25 “Operations Management Memo” discusses 14 separate social media cases where NLRB regional offices asked for advice from the General Counsel on whether the Board should bring an unfair labor practice complaint. Eight of the cases, three exclusively, examined the employer’s social media policy. In addition, eleven of the cases looked at whether the employee’s use of social media constituted concerted protected activity. 3 See EEAC Memorandum 10-148 (August 6, 2010) for additional background on the NLRA. 4 N.L.R.B. v. Washington Aluminum Co., 370 U.S. 9 (1962).




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Employers’ Social Media Policies The OGC’s report sheds some light on the types of clauses and provisions in employers’ social media policies that are likely to be deemed unlawful under the NLRA and which are not. For instance, employers’ policies that simply prohibited “disparaging comments,” “disrespectful conduct” and “inappropriate conversations” were deemed by the OGC to be too vague and could easily be interpreted by an employee as prohibiting protected concerted activity. Policies that required advance approval by senior management approval also were considered by the OGC to interfere with an employee’s NLRA rights. On the other hand, policies that provided specific examples or put into context particular prohibitions and included a statement that specifically excepted Section 7 activity were more likely to survive the scrutiny of the OGC. Overly Broad and Restrictive Employer Policies In one case, the OGC deemed unlawful a provision in an employer’s social media policy that required an employee to get senior management approval before disclosing or communicating information of a confidential or sensitive nature, or non-public information concerning the company, on or through company property to anyone outside of the company. According to the OGC, this provision precludes employees from discussing confidential terms and conditions of employment without first getting permission from their bosses to do so. According to the OGC, employees have the right to discuss any terms and conditions of employment with each other or nonemployees both on and off the work site. However, the OGC inferred that this type of language would be acceptable if it also had included some context or examples of the type of information it was referring to and had specifically excluded Section 7 activity from the prohibition. Policies that prohibit the use of the company name or logo outside the course of business were also deemed in violation of the NLRA. According to the OGC, employees engaging in protected concerted activity have the right to use the company’s name and logo in electronic or paper leaflets, cartoons, or picket signs in connection with a protest involving the terms and conditions of employment. The OGC also had problems with a policy that prohibited employees from publishing any representation about the company without prior approval, including statements to the media, media advertisements, electronic bulletin boards, weblogs, and voice mail. The OGC once again considered this language to be overly broad and could be construed by an employee as limiting his or her NLRA rights.

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Policies that prohibited communications on social networking sites that were not “professional” and “appropriate,” according to the OGC, also could be seen by employees as prohibiting them from communicating with other employees or third parties about protected activity. The OGC also disapproved of a policy that allowed the employer to request that employees temporarily and/or permanently suspend posting communications if the employer believed it was necessary in order to ensure compliance with securities regulations, other laws, or in the best interest of the company. The policy required employees to first discuss the post with their supervisors and implied that failure to do so could result in corrective action, up to and including termination. The OGC stated that this provision would have been acceptable if not for its requirement that employees clear their communication through senior management and failing to do that would result in discipline up to and including termination. The OGC concluded that this part of the provision restricted Section 7 activity. Acceptable Employer Policies In contrast, the OGC did not find a problem with an employer’s social media policy that clearly listed specific egregious conduct, such as violations of the employer’s workplace policies against discrimination, harassment, or hostility on account of age, race, religion, sex, ethnicity, nationality, disability, or other protected class, status, or characteristics. The policy also prohibited statements that are “slanderous or detrimental to the company” or “suggested sabotage,” which the OGC explained could not reasonably be interpreted to restrict Section 7 activity. The OGC also found no issues with an employer’s policy that limited employees’ social media activity to matters unrelated to the company in order to ensure compliance with certain securities regulations and other laws. Although this could be considered restricting their Section 7 activity, the OGC concluded that employees would reasonably interpret the rule to mean that the restriction applied only to those matters that could implicate security regulations. This same employer’s policy also prohibited employees from using or disclosing confidential or proprietary information, including personal information about its customers, as well as “embargoed information” such as launch and release dates of new products and pending reorganizations. The OGC found these restrictions not to be overly broad nor in conflict with Section 7 communications. The OGC also found acceptable a policy that required employees who engaged in social networking activities for personal reasons to indicate that their views were their own and did not reflect those of the employer. The policy prohibited employees from referring to the employer by name and publishing any promotional content, which the company defined specifically as content “designed to endorse, promote, sell, advertise, or otherwise support the employer and its

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products and services.” The OGC again concluded that these rules could not be interpreted as to apply to terms and conditions of employment and thereby restrict Section 7 activity. In a different case, however, the OGC determined that similar language in another company policy was overly broad. In that case, the employer’s policy required employees to get permission in advance before identifying themselves as employees of the company, and if they did use the employer’s name in a social media communication, they had to state that their comments were their own and did not reflect the views of their employer. The OGC considered the requirement to get permission prior to posting their comments to be unlawful, because, according to the OGC, personal profile pages serve an important function in enabling employees to identify and communicate with each other and restricting these communications would violate the NLRA.

Cases Finding Protected Concerted Activity In five cases, the OGC determined that the employees had been wrongfully discharged for conduct that was protected concerted activity under the NLRA. The cases all have at least two things in common. First, in each case, the comments revolved around work conditions, terms of employment, and specific issues at work. Second, the employee’s comments drew a response from co-workers who added their own thoughts or offered support for what the employee was saying. Further, in two of the cases, the OGC found that expletives and pointed-accusations contained in the comments did not rise to the level of being egregious enough to lose the protection of the NLRA. Case 1 In the first case, a call center employee was transferred from a division where the potential for bonuses was high, to another division where it was much lower. She posted comments on her Facebook page, including expletives, about the company and how she was done with being a “good” employee. A number of her co-workers and former co-workers read the post and added their own comments, indicating they were “right behind” her, that only bad behavior gets rewarded, and that honesty, integrity and commitment were a foreign language to the company. She was fired for violating a company policy, which prohibited “making disparaging comments about the company through any media including online blogs, other electronic media or through the media.” The OGC concluded that the employee had engaged in protected concerted activity when posting on Facebook, and thus had been wrongfully discharged. The OGC reasoned that her initial Facebook postings and the subsequent responses from co-workers centered on complaints

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about working conditions and the employer’s treatment of employees and therefore were covered as protected activity under the NLRA. The OGC also concluded that the employer’s policy was overly broad because it reasonably could be interpreted to restrict an employee’s protected concerted activity, such as discussions about pay or working conditions. Case 2 After receiving a reprimand for counseling other employees in the workplace concerning their work-related problems and being told not to do so again, the employee posted on her Facebook page a series of comments about having had a very bad day and being scolded for caring about other employees. Two nonemployee friends responded to her post. The company found out, and fired her. The OGC concluded that the employer fired her because it perceived her Facebook posting as disobeying its instructions not to offer opinions about the terms and conditions of employment at the company, citing prior NLRB rulings that have held that an employer’s termination of an employee in order to prevent future employee discussions of the terms and conditions of employment is unlawful.5 Because the employee had engaged in protected concerted activity, she was discharged in violation of the NLRA. Case 3 Here, the employee had complained to two co-workers at work about not receiving a promotion. She posted a similar complaint on her Facebook page stating that all her hard work had been for nothing. Three co-workers responded to the posting, complaining about the person who got the promotion and about alleged mismanagement at the company. One co-worker commented that it would be pretty funny if all of the good employees actually quit, to which the charging party responded that “this wasn’t over by a long shot” and her days at the company were limited. Learning of the postings, the employer fired the employee and one of the co-workers who responded, and disciplined the other two. The OGC concluded that the employees’ Facebook discussions centered on the employees’ terms and conditions of employment and as such were protected concerted activity. The OGC also found that their comments about quitting or leaving the company constituted “movement toward concerted action,” and that by terminating the employees, the employer had unlawfully prevented them from pursuing protected concerted activity.

5 Parexel International, LLC, 356 NLRB No. 82, slip op (2011).

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Case 4 In this case, the employee and several co-workers had been discussing the negative attitude and supervision of their Operations Manager and the effect it was having on employee morale. The group also had expressed these concerns to other management officials. Their conversation continued on Facebook with comments stating that another employee had been written up, that they were going to have to work on the weekend, and that the Operations Manager was always complaining about the employees’ break times. One worker stated that she hated the place and could not wait to get out of there and the charging party said she wished she could find another job. Comments also were made about the Operations Manager personally, indicating that she was the underlying problem. After learning of the postings, the company terminated the charging party for violating company policy. The OGC, however, found that the employee had engaged in protected concerted activity on several counts. First, established precedent indicates that protected concerted activity exists when employees complain about and criticize a supervisor’s attitude, performance, and conduct. Second, the OGC concluded that because the employees had discussed the same issue earlier at work and had complained about it to management, their Facebook discussion was just a continuation of that discussion and therefore was for the employees’ mutual aid and protection. Lastly, the OGC found that the subject matter of the discussions — discipline of another employee, inadequate supplies, and work scheduling — were all terms and conditions of employment and therefore a discussion of these issues was protected concerted activity. Case 5 Here, the employee charging party ranted on a regular basis against his employer in both the local newspaper and online over a seven-month period, and co-workers regularly posted responses to his online postings noting their approval and support for his views. After appearing at a municipal hearing where he stated that under his employer’s current management there had been multiple unfair labor practices, forced policy changes, a workplace violence incident, unfair firings, harassment, and bullying, and posting his testimony on his Facebook page, the employee was fired. The OGC found that the employee’s remarks were related to and made in the context of an ongoing labor dispute. As such, they constituted concerted activity for mutual aid and protection.

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The OGC also looked at whether the comments were unprotected because they were excessively defamatory and disparaging of the employer, observing that it would consider remarks unprotected if “they constitute ‘a sharp, public, disparaging attack upon the quality of the company’s product and its business policies, in a manner reasonably calculated to harm the company’s reputation and reduce its income.’”6 The OGC determined, however, that none of the charging party’s remarks was disparaging of the employer’s product, but rather the remarks were general criticisms of the employer’s treatment of its employees and their working conditions. Furthermore, the OGC found that none of the statements was defamatory, because they were either fact-based and accurate to the best of the employee’s knowledge, or were figurative expressions that the NLRB has previously found to be “rhetorical hyperbole” and protected under the NLRA.

Cases Finding No Protected Concerted Activity The OGC’s report also includes six cases in which the employees’ conduct was not deemed to be protected concerted activity. In contrast to the cases where protected concerted activity was found, the employees in these cases were deemed by the OGC to be merely disgruntled workers airing gripes about their jobs. Notably, in each case, there was little to no co-worker involvement indicating that the employee’s comments were made in furtherance of group action or of mutual protection and concern. Case 1 After being reprimanded by her supervisor and in front of the regional manager, the employee posted an expletive-filled comment on her Facebook page, and naming her employer. She later added several other postings, all criticizing her employer and its treatment of employees. Several co-workers indicated they “liked” her comments, but none responded or joined in the discussion. The employer’s social media policy stated that when engaged in out-of-office social networking situations, employees should avoid identifying themselves as working for the company, unless there was a legitimate business need to do so or if they were discussing terms and conditions of employment in an appropriate manner. The OGC found that the employee’s comments were not protected concerted activity. She had no particular audience in mind when she posted, the post contained no language suggesting she was calling on her co-workers for group action, and the post did not grow out of earlier discussions concerning terms and conditions of employment. According to the OGC, the charging party was simply airing a complaint about her job.

6 Citing Labor Board v. Electrical Workers, 346 U.S. 464 (1953).

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However, the OGC did find the employer’s policy to be overly broad in that neither “appropriate” nor “inappropriate” was defined. According to the OGC, employees could easily interpret the rule to prohibit criticizing the employer’s policies, treatment of employees, and terms and conditions for employment, even though the employer had included a clause in the policy stating that the policy should not be interpreted as prohibiting Section 7 activities. Case 2 In this case, the employee posted comments on her Facebook page about a fellow bartender whom she accused of “screwing over” the customers because he was using pre-made mixes for cocktails and using cheap alcohol rather than premium as was expected. Over the next few days, she posted several comments on Facebook and even talked to other employees about this particular bartender and made comments about dishonest employees and employers who looked the other way. While several co-workers viewed her postings and some even commiserated with her, none shared her concern about the bartender substituting cheap alcohol for premium alcohol. She was fired after her employer learned of the postings for using unprofessional communication on Facebook to fellow employees. According to the OGC, “employee protests over the quality of service provided by an employer are not protected activity when such concerns have only a tangential relationship to employee terms and conditions.”7 However, employees’ conduct is protected if they are complaining about the performance of their co-workers or supervisor because that would impact their working conditions.8 Applying these criteria, the OGC determined that the employee’s comments were not protected activity. Her posts about the service being provided by the other bartender had “only a very attenuated” connection to her terms and conditions of employment. Additionally, even though she had complained to co-workers that she feared customers would stop coming to the bar, thus resulting in lower tips which would have affected her terms and conditions of employment, the OGC found that these comments were not made on her Facebook page so were irrelevant in this regard. Case 3 This case involved an employee who previously had experienced conflicts with co-workers and had posted angry and profane comments on her Facebook wall ranting against co-workers and her employer, saying that she hated the people at work, that she had anger problems,

7 Five Star Transportation Inc., 349 NLRB 42 (2007). 8 Georgia Farm Bureau Mutual Insurance Cos., 333 NLRB 850 (2001).

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and that she wanted to be left alone. Only one co-worker commented on the posting simply stating that they had gone through something similar. Two other co-workers saw the posting, reported it to the employer, and the charging party was terminated for violating the company’s social media policy, which prohibited employees from using social media to engage in unprofessional communication that could negatively impact the employer’s reputation or interfere with the employer’s mission or unprofessional/inappropriate communication regarding members of the employer’s community. The OGC did find the employer’s policy to be overly broad because it could reasonably be construed by an employee to prohibit Section 7 activity such as discussing pay or treatment by the employer. Also, the policy contained no language excepting Section 7 activity from its restriction. The policy contained examples of unprotected conduct but, according to the OGC, some of the conduct listed could reasonably be read to include protected conduct such as discussions about personnel actions. Ultimately, however, the OGC determined that the charging party’s comments were not protected under the NLRA, but rather were simply “an expression of her personal anger, were made solely on her own behalf, and did not involve the sharing of common concerns.” Case 4 In this case, the employee posted a complaint on Facebook about a habit one of her co-workers had of “sucking his teeth,” which she found irritating. She stated that she was about to hit him over the head with a nearby piece of equipment. The co-worker later found out about the Facebook posting and reported her to supervisors, claiming the comments were vulgar and personally threatening. The employee was suspended for that posting, as well as additional postings discovered by the employer that were made prior to the post about her co-worker. Those posts implied that her co-workers did not know what they were doing in their jobs. The OGC found that her comments were not protected under the NLRA as concerted activity. With regard to the comments about the co-worker “sucking his teeth,” that comment, according to the OGC, was merely one employee complaining about a personal trait of another and had nothing to do with the terms and conditions of her employment. The OGC acknowledged, however, that the comments she had posted about her co-workers not knowing what they were doing could be seen as relating to her terms and conditions of employment. However, even if her comments concerned a protected topic, none of her co-workers responded to the post or discussed the topic at work. As such, the OGC determined that there was no intent in her postings to induce her co-workers into protected group activity.

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Rather, the charging party was merely complaining about something that had happened on her shift. Case 5 Here, the employee, a truck driver, became frustrated when he was unable to reach his dispatch operator and let her know that he would be delayed because of a snow storm. After discussing the situation with other drivers, he posted several comments on his Facebook page discussing the situation and complaining that his employer was running off all of the good hard working drivers. No other employees joined in his Facebook discussion. Several days later, two management employees posted responses taking issue with the employee’s comments. Shortly thereafter, he was disciplined, and ultimately resigned because he felt ostracized by his co-workers. The OGC found no evidence of concerted activity in his Facebook comments. The employee did not discuss his comments with fellow co-workers and none of his fellow employees responded to any of his comments. Therefore, as there was no evidence of collective concerns or the employee’s desire to induce or prepare for group action, his comments were not protected activity, but merely gripes expressing his own frustrations about not being able to reach the dispatcher. Case 6 The employee in this case was not feeling well at work and asked to leave early. His supervisor told him he could but that it would cost him attendance points. The employee worked until the end of his shift, but immediately afterwards went onto his Facebook page and, using expletives, complained about how his boss did not care about the health of his employees. He went on to say that he was “pissed” and despite five years of service to the company, he was treated as if he were a new employee. He concluded his postings by saying that the employer was looking for a reason to fire him because he was about “a hair away from setting it off.” None of his co-workers responded to his rant. After learning of the postings, the employer called him in to discuss the postings, expressing concern that his comment about “setting it off” meant he was going to get a gun and start shooting people. The employee denied this and said he was just “venting,” and that “setting it off” meant cussing someone out or walking off the job. Nevertheless, he was fired for Facebook postings that were inappropriate, threatening, and violent. The OGC reasoned that although his comments had to do with terms and conditions of his employment, there was no involvement of other co-workers and no effort by the charging party to induce co-workers into group action. Rather, as he admitted, he was just “venting.”

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Summary Importantly, while this latest OGC social media update helps employers know where the NLRB is coming from, the positions taken for now are simply agency interpretations of the law. Over time, as cases work their way up through the courts, we will see definitive rulings that will test the legal strength of these interpretations. In the meantime, EEAC will continue to closely monitor and report on further developments of interest as they occur. Questions concerning this memorandum should be directed to Judy Lampley at 202-629-5696.


11-164 August 26, 2011 To: EEAC Members From: Jeffrey A. Norris President Re: New Report Issued by NLRB’s General Counsel Sheds Further Light on

Agency’s Position Regarding Employee Use of Social Media as Protected Activity

The Acting General Counsel of the National Labor Relations Board (NLRB, or Board) has issued a new report on the agency’s position with respect to whether employees’ off-work use of social media that their employer finds objectionable constitutes protected activity under the National Labor Relations Act (NLRA). The new report expands upon the four NLRB “Advice Memoranda” that we discussed in our recent EEAC Memorandum 11-156 (August 12, 2011). As we reported previously, the NLRB opened a new legal front last year when it accused an employer of violating the NLRA by firing an employee who posted negative comments about her supervisor on her personal “Facebook” page.1 Since then, the Board has continued to investigate alleged NLRA violations by employers involving employees’ use of social media. According to the NLRB’s Acting General Counsel Lafe Solomon, the new “Report of the Acting General Counsel Concerning Social Media Cases,” dated August 18, 2011, is intended “to keep the labor-management community fully aware of the activities of my office.” The report details fourteen Advice Memoranda (including the four cases discussed in EEAC Memorandum 11-156) issued by the General Counsel in the last year involving employee, employer, and union2 use of social media and the implications of such use under the NLRA, including whether employees’ postings on Facebook constituted “protected concerted activity,” and whether employers’ social media policies were “unlawfully overly broad.” A copy of the report is available on the NLRB’s website at http://mynlrb.nlrb.gov/link/document.aspx/09031d458056e743.

1 See EEAC Memorandum 10-224 (December 3, 2010). 2 We do not discuss the case involving the union in this memorandum.




http://mynlrb.nlrb.gov/link/document.aspx/09031d458056e743


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Background The National Labor Relations Board (NLRB) is the five-member quasi-judicial agency that enforces the National Labor Relations Act (NLRA), the nation’s basic labor-management relations law. The heart of the NLRA is Section 7, which guarantees the right of employees to form or join labor organizations, bargain collectively through designated representatives, and engage in other protected concerted activity (emphasis added) “for the purpose of collective bargaining or other mutual aid or protection.”3 Section 8(a)(1) of the NLRA in turn prohibits employers from interfering with, restraining, or coercing employees in the exercise of their Section 7 rights.4 Over the years, cases decided by the NLRB and the courts have reasoned that to be “concerted,” the activity engaged in must include other employees or be authorized by other employees, and typically does not occur where an employee has acted solely on his or her own. To be “protected,” the conduct engaged in must be for the purpose of collective bargaining or other “mutual aid or protection,” defined broadly by the U.S. Supreme Court to including “matters of common concern.”5 Within the NLRB’s Office of the General Counsel (OGC) is the Division of Advice, whose purpose is to provide guidance to NLRB field offices on emerging legal issues. The Division issues “Advice Memoranda” to NLRB field offices when requested to help them determine whether an unfair labor practice complaint should be issued against a company. Each of the cases discussed below was submitted by NLRB regional offices to the OGC for an Advice Memorandum, with the results discussed below. Cases Finding Protected Concerted Activity In four cases, including the American Medical Response of Connecticut, Inc. (AMRCI) case already discussed in EEAC Memorandum 10-224, the OGC determined that the employees had been wrongfully discharged for conduct that was protected concerted activity under the NLRA. Hispanics United of Buffalo, Inc. In Hispanics United of Buffalo, Inc., an employee had initiated numerous personal conversations with various coworkers critical of their job performance and workload issues, including one coworker in particular. The coworker eventually complained about the barrage of

3 29 U.S.C. § 157. 4 29 U.S.C. § 158(a)(1). 5 N.L.R.B. v. Washington Aluminum Co., 370 U.S. 9 (1962).


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messages she was receiving from the employee and requested a meeting with the company’s Executive Director. In preparation for the meeting, the coworker posted on her Facebook page that the employee had been complaining about her coworkers’ work performance and asked how other workers at the organization felt about this. At least four other coworkers responded to the coworker’s Facebook posting. The employee then complained to the Executive Director that these postings were “cyber-bullying” and intended to harass her. As a result, the coworker and the four others who responded to her posting were fired. The OGC found that the coworker, using a social media platform, had appealed to her fellow coworkers for assistance in preparing for a meeting with her employer to discuss various terms and conditions of employment for their “mutual aid and protection.” Accordingly, they had engaged in protected concerted activity and should not have been terminated. Karl Knauz Motors In Karl Knauz Motors, the OGC concluded that the employer had violated the NLRA when it terminated a salesman for posting on his Facebook page pictures and comments that criticized a employer-sponsored sales event. The sales event was for the launch of a new model car and the dealership was providing test drives and food. The food consisted of hot dogs, chips, cookies and water, which the salespersons complained about to the employer as being inadequate. Later the salespersons discussed among themselves how disappointed they were in how their employer had handled the event and how the inexpensive food and beverages could negatively impact their sales and commissions. During the event one of the salesman took pictures of the event, including the food table and a scene captured earlier in the day when a salesperson accidently drove another car into an outdoor pond. Along with the pictures, the salesman posted snide comments about the event and the way the dealership handled the event. Upon hearing of the postings, and despite the salesman taking them down at his employer’s request, the salesman was terminated. The OGC concluded that the salesperson was engaged in protected concerted activity and had been wrongfully discharged, reasoning that because a number of employees were critical of the event and had discussed it among themselves, the salesman was not acting alone when he posted the pictures and comments on Facebook. Rather, the postings were a “direct outgrowth” of the earlier discussions among the salespersons, and because the discussions concerned terms and conditions of employment — their sales and commissions — the activity was protected concerted activity.

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Triple Play Sports Bar In Triple Play Sports Bar, a number of former and current employees discovered that they owed state income taxes for 2010 and brought this to the attention of their employer. They asked that the matter be placed on the agenda for an upcoming management meeting with the employees. One of the former employees posted comments on her Facebook page expressing dissatisfaction with her former employer’s tax withholding practices and asserting that the bar’s owners could not even do paperwork correctly. Other current and former employees, as well as some customers, responded to the post. One employee clicked “Like” in response to the posting and another used a derogatory term to describe one of the bar’s owners. Both were terminated for their “disloyalty.” In addition, the bar’s owner threatened to file civil actions against them for defamation. The OGC concluded that the employees had shared their concerns about terms and conditions of employment prior to the Facebook posting and alluded to the upcoming meeting with management in one of the posts, thus discussing “truly group complaints” and contemplating future group activity. Furthermore, the OGC found that the employer’s threats of lawsuits against the employees for engaging in Section 7 activity also violated the NLRA because “it would reasonably tend to interfere with the [employees’] exercise of Section 7 rights.” Cases Finding No Protected Concerted Activity The Acting General Counsel’s report also includes five cases in which the employees’ conduct was not deemed to be protected concerted activity. Four of the cases were already discussed in our recent EEAC Memorandum 11-156. Rural Metro In the fifth case, Rural Metro, the employer discharged an employee for posting critical and confidential remarks on a state senator’s Facebook page. Rural Metro provides emergency and nonemergency medical transportation and fire protection services to public and private customers, including local fire departments. The senator had announced on his Facebook page that four fire departments in his state had received federal grants. The Rural Metro employee responded by posting remarks that indicated she disagreed with how emergency medical services were handled in the state and that


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her current company was not helping the situation. She also mentioned that her employer had only two trucks to service the entire county and had sent out an untrained crew to handle a recent medical emergency call. The OGC first found the purpose of the employee’s posting was to make the senator aware of how medical services were handled in the state, and she neither expected nor sought the senator’s assistance. Additionally, she had not discussed the subject matter of her postings with coworkers either before or after she posted. Thus, the OGC concluded that her termination for making disparaging remarks about the company, for making public confidential information, and for violating the company’s ethics policy, did not violate the NLRA. “Overly Broad” Employers’ Social Media Policies The remainder of the cases discussed in the Acting General Counsel’s report deal with employer’s social media policies that in all but one case the OGC found to be overly broad and could reasonably tend to chill employees in the exercise of their Section 7 rights. In most of the cases, the employers’ policies were deemed “overly broad” because they used words or phrases that were undefined and could reasonably be interpreted to prohibit discussions among coworkers or third parties about terms and conditions of employment. For instance, phrases such as “inappropriate discussions,” “private or confidential information,” “inappropriate or sensitive information,” “personal information about coworkers” without being defined further, according to the OGC, could be applied to discussions about, or criticism of, the employer’s labor polices and/or the employer’s treatment of its employees. In another case, the OGC found that an employer policy that prohibited its employees from including the company name, address or other company information on their social media profiles violated the NLRA. According to the OGC, one of the main functions of an individual’s personal profile page is to assist them in finding and communicating with their coworkers. Thus, according to the OGC, this prohibition was “particularly harmful to their Section 7 rights.” In a related case, the OGC concluded that a policy forbidding employees from using company logos and photographs of the Employer’s store, brand, or product, without written authorization also violated the NLRA. The OGC said this provision could prevent an employee from engaging in protected activity such as posting a picture on a social media site that showed the employee peacefully picketing in front of the employer’s place of business or wearing a shirt with a company logo while protesting terms and conditions of employment. The one case where the OGC concluded there was no violation involved a provision in an employer’s policy that prohibited employees from pressuring their coworkers to connect or communicate with them via social media. The Board stated that the rule was “sufficiently

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specific,” applied only to “harassing conduct,” and could not be reasonably interpreted to restrict employees from discussing various terms and conditions of employment. Significance The cases discussed in this memorandum, as well as the four cases discussed in our earlier Memorandum 11-156, present a fairly good picture of the NLRB’s position on employees’ use of social media, and where in the agency’s view that activity is protected concerted activity under the NLRA. From an employer perspective, it is helpful to know where the agency is coming from. At the same time, it is important to note that for now these are simply agency interpretations of the law. Over time, as cases work their way up through the courts, we will see definitive rulings that will test the legal strength of these interpretations. As always, EEAC will continue to closely monitor and report on further developments of interest as they occur. Questions concerning this memorandum should be directed to Judy Lampley at 202-629-5696.



11-156 August 12, 2011 To: EEAC Members From: Jeffrey A. Norris President Re: NLRB Issues “Advice” Memos on Factors Agency Will Consider in

Determining Whether Objectionable Social Media Postings by Employees Constitute Protected Concerted Activity

A few months ago, EEAC reported on an unfair labor practice complaint brought by the National Labor Relations Board (NLRB) against a company for terminating an employee who posted derogatory comments about her supervisor on her personal Facebook page. Because the case settled, the question of what types of objectionable workplace-related social media activity by employees might be considered to be “protected concerted activity” under the National Labor Relations Act (NLRA) was left unresolved.1 Since then, however, the NLRB’s Office of General Counsel (OGC) has issued a number of so-called “Advice Memoranda” that provide guidance to NLRB field offices as well as employers on the factors that the agency will consider when determining whether employees were engaging in protected concerted activity when involved in social media activity that violates their employer’s policy. The four relevant Advice Memoranda are available on the NLRB’s website at http://www.nlrb.gov/cases-decisions/advice-memos. Background The National Labor Relations Board (NLRB) is the five-member quasi-judicial agency created by Congress in 1935 to enforce the NLRA, the nation’s basic labor-management relations law. Among other things, the NLRB conducts secret ballot union representation elections and adjudicates charges of NLRA-prohibited unfair labor practices. The NLRB is divided into two parts — the 5-member Board and its support staff, and the Office of the General Counsel (OGC). Within the OGC is the Division of Advice, whose

1 See EEAC Memoranda 10-224 (December 3, 2010) and 11-059 (March 25, 2011).

http://www.nlrb.gov/cases-decisions/advice-memos



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purpose is to provide guidance to NLRB field offices on emerging legal issues. When a charge is filed with a field office on which the field officers need guidance, the Division of Advice will issue an “Advice Memorandum.” Depending upon the conclusion drawn in the memorandum, the field office then determines whether a complaint will be filed against the company involved.

“Protected Concerted Activity” The heart of the NLRA is Section 7, which guarantees the right of employees to form or join labor organizations, bargain collectively through designated representatives, and engage in other protected concerted activity “for the purpose of collective bargaining or other mutual aid or protection.”2 Section 8(a)(1) of the NLRA in turn provides that employers commit unfair labor practices if they “interfere with, restrain, or coerce employees in the exercise of their rights guaranteed in Section 7.”3 The NLRA does not define the terms “concerted” or “protected” activity, or “mutual aid or protection.” Rather, over the years, cases decided by the NLRB and the federal courts have ruled that to be “concerted,” the activity engaged in must include other employees or be authorized by other employees, and typically does not occur where an employee has acted solely on his or her own. Concerted activity also has been found where the employee’s action is a “logical outgrowth” of previous group activity,4 or anticipates group participation in the future.5 Moreover, in order to fall within Section 7’s protection, it is not enough that the employee’s activity be “concerted” — it also must be “protected.” To be “protected,” the conduct engaged in must be for the purpose of collective-bargaining or other “mutual aid or protection.” The U.S. Supreme Court has held that the term “mutual aid or protection” should be defined broadly to include “matters of common concern,”6 and goes beyond activities linked directly with self-organization and collective-bargaining.7 The activity, however, must have a substantial connection to concrete employment interests relating to specific terms and conditions of employment.8 Protected activity also has been found where the employee’s activity was focused on concerns for customers or other employees.9 While some communications among employees can be identified fairly easily as protected concerted activity (for instance, discussions about pay, hours, or benefits), an 2 29 U.S.C. § 157. 3 29 U.S.C. § 158(a)(1). 4 Every Woman’s Place, Inc., 282 N.L.R.B. 413 (1986). 5 Meyers Industries, Inc., 281 N.L.R.B. 882 (1986). 6 N.L.R.B. v. Washington Aluminum Co., 370 U.S. 9 (1962). 7 Eastex, Inc. v. N.L.R.B., 437 U.S. 556 (1978). 8 Eastex, Inc. v. N.L.R.B., 437 U.S. 556 (1978). 9 Five Star Transportation, 349 N.L.R.B. 8 (2007), enforced 522 F. 3d 46 (1st Cir. 2008).

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employee’s negative comments about his or her employer or supervisor are less easily categorized as such. Especially relevant in the social media context, the NLRB has taken the position that the method by which employee activity is communicated is irrelevant to whether the activity is concerted and protected. The Board asserts that the NLRA’s protections apply to all forms of communication — verbal, written hard copy or electronic.10

The American Medical Response Complaint Late last year we reported that the NLRB had opened a new legal front in the context of employees’ use of social media as it relates to their jobs by accusing an employer of violating the NLRA by firing an employee who after working hours posted negative comments about her supervisor on her personal “Facebook” page. Specifically, the Board alleged that the company engaged in unfair labor practices by (1) maintaining a posting policy that interfered with the right of employees to act in concert for their mutual aid and protection, and (2) by terminating the employee for engaging in the “protected concerted activity” of communicating with fellow employees about her supervisor.11 As already mentioned, the case settled before there was any determination, and therefore employers were not provided with any clear guidance on where the line gets drawn for disciplining employees because their social media use may violate employer policy. When viewed in the context of the four advice memos discussed below, however, it would appear the key distinguishing factor the NLRB will look at in determining whether protected concerted activity took place is if the employee’s social media comments solicited support and additional negative comments about the employer from coworkers. Advice Memos Analyze Four Different Factual Circumstances Involving Employee’s Use of Social Media, Finding No Concerted Activity in Any of Them The four Advice Memoranda discussed below were issued as the result of field office inquiries regarding charges in which individuals were alleging 8(a)(1) violations by their employers. As discussed in more detail below, in all four cases, the OGC concluded that the employees had not been engaged in protected concerted activity and, therefore, their employers had not violated the NLRA when disciplining them for violating employer policy. In each case, the OGC used the traditional test for determining concerted activity. Namely, is the activity “engaged in with or on the authority of other employees, and not solely by and on behalf of the employee himself?” The advice memos clarify that comments made

10 Timekeeping Systems, 323 N.L.R.B. 244 (1997). See also Konop v. Hawaiian Airlines, 302 F. 3d 868 (9th Cir. 2002), cert. denied, 537 U.S. 1193 (2003). 11 See EEAC Memorandum 10-224.


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solely by and on behalf of the employee him- or herself are not concerted, and that mere griping is not protected. JT’s Porch Saloon & Eatery, Ltd. In JT’s Porch Saloon & Eatery, Ltd., the complainant worked as a bartender for the restaurant, but occasionally helped out the wait staff. He previously had complained to a fellow bartender about the restaurant policy of not allowing the bartenders to share in the wait staff tips. Months later, in answer to a question from his step-sister on his Facebook page about how his night at work had been, he complained that he had not had a raise in five years and was doing the wait staffs’ work without the benefit of sharing in the tips. He also called the restaurant’s customers “rednecks” and stated that he hoped “they choked on glass as they drove home drunk.” There was no evidence, however, that he discussed these Facebook postings with coworkers, and no coworkers commented on the postings. He was fired after the restaurant became aware about the postings on grounds of making negative comments about the restaurants’ customers. The OGC’s Advice Memorandum concluded that the complainant’s Facebook postings did not constitute protected concerted activity, reasoning that there was no discussion with or response from coworkers about the postings, and that there had been no attempt to initiate a meeting or group action among the employees to complain about the tip policy or to take the complaint to management. The OGC found that the employee was merely responding to a question about how his night at work had gone and that his Facebook posting was not an outgrowth of his prior conversation with a fellow bartender about the tip policy. Martin House The complainant in Martin House was employed at a residential facility for homeless people as a recovery specialist. While working a night shift, she engaged in a conversation on her Facebook page with two friends, neither of whom were coworkers, in which she made disparaging remarks about the mental condition of the facility’s residents. She was fired when her employer found out on grounds that her comments were not “recovery oriented,” and that her talking about the residents’ conditions should not be for her own personal amusement. The employer also expressed privacy and confidentiality concerns with regard to the postings and noted that the postings were made during work hours when the employee should have been performing work-related duties. As was the case in JT’s Porch, the OGC found that the charging party had not engaged in protected concerted activity, concluding that the employee was merely talking with her personal friends about what was happening at work that evening and that her Facebook comments did not even mention any terms or conditions of employment. Moreover, the OGC said she had not

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discussed the posts with any coworkers, nor had they responded to her posts, and that she was not “seeking to induce or prepare for group action, and her activity was not an outgrowth of the employee’s collective concerns.” Wal-Mart In Wal-Mart, the complainant was an in-store customer service employee. After having an “interaction” with the store’s new assistant manager, he posted a number of comments on his Facebook page including the following: “Wuck Falmart! I swear if this tyranny doesn’t end in this store they are about to get a wakeup call because lots are about to quit.” The posts were read by at least four Facebook friends, who were also coworkers, and who responded with sympathetic postings such as “hang in there” and “what’s got you so wound up.” Upon learning of the postings, the store manager filed a disciplinary report and gave him a one-day paid suspension. The OGC once again concluded that there was insufficient evidence to believe that the complainant had engaged in protected concerted activity. According to the Advice Memorandum, his conduct was simply “an expression of an individual gripe” and contained no language indicating that he was attempting to initiate or induce group activity among his coworkers. Furthermore, the OGC described the coworkers’ comments as simply emotional support in response to a coworker’s expressions of frustration. Lee Enterprises The complainant in Lee Enterprises was employed as a reporter for one of the company’s newspapers in Tucson covering the crime and public safety beat. During the term of his employment, he posted numerous sarcastic and callous comments on Twitter about the high level of crime in Tucson, such as “What?!?!? No overnight homicide? WTF? You’re slacking Tucson.” Despite being warned about the inappropriateness and offensiveness of the tweets, he continued to post additional and similar inappropriate tweets and eventually was terminated because of it. Again, the OGC concluded that the complainant had been terminated because of misconduct that did not involve protected concerted activity and thus he was not protected by the NLRA. There was no evidence that his tweets involved his terms or conditions of employment nor was he “[seeking] to involve other employees in issues related to employment.” Significance Although employers still have no definitive legal guidance as of yet on when social media postings by employees that violate employer policy may cross the line into protected

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concerted activity under the NLRA, the NLRB has provided more guidance on what it will consider in determining whether to charge an employer with an unfair labor practice. Accordingly, factors an employer may want to consider in deciding whether to discipline an employee include the following:

• Did the posting actually include negative comments about the employer, the supervisor, or the employee’s working conditions?

• Did other employees of the company respond to the negative comments or was the

employee’s posting an outgrowth of previous employee group discussion or activity?

• Were the coworkers’ responses also negative and/or critical of the employer, supervisor, or working conditions?

If the answer to these questions is yes, employers may want to proceed with caution as the NLRB is likely to take the position that it could constitute protected concerted activity. EEAC will continue to closely monitor and report on further developments of interest related to this emerging area of employment law. Questions concerning this memorandum should be directed to Judy Lampley at 202-629-5696.


11-059 March 25, 2011 To: EEAC Members From: Jeffrey A. Norris President Re: NLRB Challenge to Employer’s Social Media Policy Ends in Settlement,

but Issue Is Not Going Away Several months ago, EEAC reported on a formal complaint brought by the National Labor Relations Board (NLRB) against an employer accusing the company of violating federal labor law by firing an employee who posted derogatory comments about her supervisor on her personal “Facebook” page during off work hours.1 Specifically, the complaint in American Medical Response of Connecticut, Inc. (AMRCI), alleged that the employer had committed unfair labor practices under the National Labor Relations Act (NLRA) by interfering with an employee’s right to engage in “protected concerted activity,” and in so doing raised the important issue of whether and to what extent the legal principles that have been developed under the pre-Internet NLRA now apply in the social media context. A definitive ruling on this question will have to wait for another day, however, because the NLRB and AMRCI have settled the complaint, with AMRCI agreeing to revise its “overly-broad” blogging and Internet posting policy to ensure that the policy does not in any way restrict employees from discussing their wages, hours, or working conditions with coworkers and others. Regrettably, the settlement provides little guidance for employers seeking to craft social media policies that protect the company interests while not running afoul of the NLRA. That said, the issue certainly is not going away, and EEAC members are well-advised to continue reviewing both the scope and enforcement of their Internet and social media policies in light of the employee protections contained in the NLRA.

1 See EEAC Memorandum 10-224 (December 3, 2010).


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The text of the settlement agreement along with a press release issued by the NLRB are available online at http://www.minnesotaemploymentlawreport.com/NLRB%20Facebook%20 Settlement.pdf and http://www.nlrb.gov/news/settlement-reached-case-involving-discharge-facebook-comments. Background The NLRB’s complaint in this case was precipitated by a charge filed with the Board’s Regional Director by the employee’s union alleging that the company had committed unfair labor practices. After investigating the charge, the NLRB brought a formal complaint against the company alleging unfair labor practices. According to the complaint, employee Dawnmarie Souza was asked by her supervisor to prepare a report responding to a customer complaint about her work. In response, Souza requested union representation for an investigative interview that she believed would result in disciplinary action against her. Her union claims that the company denied her request, insisted that she complete the incident report, and threatened to discipline her because of her request for union representation. After work on the same day she made her request for union representation, Souza posted negative comments about her supervisor on her home computer’s Facebook page, reportedly stating that, “Love how the company allows a 17 (code for a psychiatric patient) to be a supervisor,” and referring to her supervisor as “scumbag as usual.” Her Facebook comments drew support and additional negative comments about the supervisor to her webpage from her coworkers. AMRCI found out about the postings, and, concluding they violated company policy, fired Souza. AMRCI’s blogging and Internet posting policy specifically prohibited employees “from making disparaging, discriminatory or defamatory comments when discussing the Company or the employee’s superiors, coworkers and/or competitors.” The company’s Standards of Conduct policy also prohibited an employee from exhibiting “rude or discourteous behavior to a client or coworker.” The NLRB complaint claimed that AMRCI engaged in unfair labor practices by (1) maintaining an Internet posting policy that interfered with the right of employees to act in concert for their mutual aid and protection, and (2) by terminating Souza for engaging in the “protected concerted activity” of communicating with fellow employees about her supervisor.2

2 Please refer to EEAC Memorandum 10-224 for a more in-depth discussion of protected concerted activity.

http://www.minnesotaemploymentlawreport.com/NLRB%20Facebook%20Settlement.pdf

http://www.minnesotaemploymentlawreport.com/NLRB%20Facebook%20Settlement.pdf

http://www.nlrb.gov/news/settlement-reached-case-involving-discharge-facebook-comments

http://www.nlrb.gov/news/settlement-reached-case-involving-discharge-facebook-comments


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Settlement Offers Little Additional Guidance The settlement agreement reached between the Board and AMRCI last month requires the company to post a notice stating that the company will not do anything to interfere with employees’ rights to form, join or assist a union; to bargain collectively through a representative chosen by employees; to act together with other employees for their mutual benefit and protection; or to choose not to engage in any of these protected activities. The notice also states that AMRCI will not discharge or discipline an employee due to union activities or because the individual discusses his or her wages, hours or working conditions outside of the workplace. The notice also states that AMRCI may not maintain or enforce any rules in its employee handbook, or elsewhere, that “improperly restrict [an employee’s] right to engage in union activities or to discuss [his or her] wages, hours and working conditions with [his or her] fellow employees and others” whether at, or away from, work. Looking Ahead As we pointed out in our earlier memo, the Board’s complaint in this case opened a new legal front in the widespread use of social media as it relates to the employment context. Although the case settled before a definitive ruling was rendered, the issue is almost certain to come up again in another setting. Accordingly, employers may want to review their relevant policies to ensure that there are no prohibitions or restrictions that could be interpreted as discouraging employees or interfering with their rights to discuss wages, hours, and working conditions with others. As an additional precaution, employers may want to include a disclaimer to the effect that nothing in the company’s policies is meant to interfere with the employees’ rights under the NLRA. Questions concerning this memorandum should be directed to Judy Lampley at 202-629-5696.


10-224 December 3, 2010 To: EEAC Members From: Jeffrey A. Norris President Re: National Labor Relations Board Accuses Employer of Violating Federal

Labor Law by Firing Employee Who Posted Negative “Facebook” Comments About Her Supervisor

The National Labor Relations Board (NLRB, or Board), the independent federal agency that enforces the country’s basic labor-management law, has opened a new legal front in the widespread use of social media as it relates to the employment context by accusing an employer of violating the National Labor Relations Act (NLRA) by firing an employee who posted negative comments about her supervisor after working hours on her personal “Facebook” page. The Board’s complaint directly challenges the extent to which an employer can lawfully maintain and enforce policies that restrict employees from placing disparaging comments about company supervisors on personal social media websites. The action by an NLRB Regional Director in issuing a complaint in American Medical Response of Connecticut, Inc. (AMRCI),1 alleging that the company committed so-called unfair labor practices, appears to be the first instance in which the requirements of the 75-year-old NLRA have been applied in the context of contemporary social media communications, and seems to run counter to court and arbitrator rulings to date that have upheld the termination of employees for insubordinate postings on their personal social media websites.2 While the case at this stage represents only the accusation of an NLRB Regional Director based upon evidence that has not yet been tested in litigation, the Board’s complaint raises the important issue of whether and to what extent the legal principles that have been developed under the pre-internet NLRA apply in the social media context. Needless to say, the ultimate answer to this question has major implications for how companies — both unionized and non-union — draft and enforce their online and social media policies.

1 Case No. 34-CA-12576 (filed October 27, 2010). 2 See, for example, EEAC Memorandum 10-118 (June 25, 2010).


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Background The Board’s complaint in this case was precipitated by a charge filed with the Regional Director by the employee’s union alleging that the company had committed unfair labor practices. According to the NLRB’s complaint, AMRCI employee Dawnmarie Souza was asked by her supervisor to prepare a report responding to a customer complaint about her work. In response, Souza requested union representation for an investigative interview that she believed would result in disciplinary action against her. Her union claims that the company denied her request, insisted that she complete the incident report, and threatened to discipline her because of her request for union representation. On the same day she made her request for union representation, Souza posted negative comments about her supervisor on her home computer’s Facebook page, reportedly stating that, “Love how the company allows a 17 (code for a psychiatric patient) to be a supervisor,” and referring to her supervisor as “scumbag as usual.” Her Facebook comments drew support and additional negative comments about the supervisor to her webpage from her coworkers, and as a result of these postings, which the company believed violated company policy, Souza was terminated. AMRCI’s blogging and Internet posting policy specifically prohibits employees “from making disparaging, discriminatory or defamatory comments when discussing the Company or the employee’s superiors, coworkers and/or competitors.” The company’s Standards of Conduct policy also prohibits an employee from exhibiting “rude or discourteous behavior to a client or coworker.” Specifically with respect to Souza’s Facebook posting, the formal complaint against AMRCI brought by the Board’s Regional Director alleges that the company engaged in unfair labor practices under the NLRA by (1) maintaining a posting policy that interfered with the right of employees to act in concert for their mutual aid and protection, and (2) by terminating Souza for engaging in the “protected concerted activity” of communicating with fellow employees about her supervisor. The NLRB Complaint Process Importantly, the NLRB does not have independent authority to bring a complaint against an employer for alleged unfair labor practices. As mentioned above, the Regional Director filed his formal complaint after investigating a charge by Souza’s union that the company committed unfair labor practices by refusing to allow Souza to have a union representative present at an expected disciplinary hearing, and threatening to discipline her for making the request. The filing of a formal complaint by the NLRB is the first step in what can be a protracted process. Accordingly, it may be quite some time before there is a final ruling by the full five-

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member Board. Under NLRB procedures, it is the responsibility of the NLRB General Counsel, acting through the agency’s Regional Directors, to determine whether or not there is a reasonable factual basis to believe that an unfair labor practice has been committed. In this case the Hartford Regional Director concluded that such evidence existed and thus issued the complaint described above. The next step in the process is a hearing before an NLRB Administrative Law Judge (ALJ), which currently is scheduled to begin on January 25, 2011. In this proceeding, the Board’s General Counsel serves in the role of prosecutor, and the company will be entitled to introduce evidence in its own defense. At some future point after conclusion of the hearing, the ALJ will issue his or her findings of fact and a Decision and Order, and either party then has the right to appeal the ALJ’s decision to the full five-member NLRB. The Board at some future point will issue its own final administrative determination. This decision then can be appealed by the losing party to the federal courts. The NLRA and “Protected Concerted Activity” The NLRA was enacted in 1935 and has been amended several times since.3 The heart of the Act is Section 7, which provides that employees have the right to form or join labor organizations, bargain collectively through designated representatives, and engage in other protected concerted activity “for the purpose of collective bargaining or other mutual aid or protection” (emphasis added).4 The NLRA also protects the right of employees to refrain from such activities if they wish. The law thus regulates both employer and union conduct with respect to protecting the rights of unionized and non-unionized employees. Employers and unions commit an unfair labor practice if they “interfere with, restrain, or coerce employees in the exercise of their rights guaranteed in Section 7.”5 There are two issues raised by the complaint in this case: (1) did the company terminate Souza for engaging in a protected concerted activity, and (2) was the company’s blogging and internet posting policy so overbroad that it interfered with the right of company employees to act together in concert for their mutual aid or protection? Was Souza Terminated for Engaging in “Protected Concerted Activity”? The ultimate answer to this question has two components: (1) Was Souza’s Facebook posting concerted or individual activity?; and (2) If concerted, was her Facebook posting protected activity?

3 For additional background on the NLRA, please see EEAC Memorandum 10-148 (August 6, 2010). 4 29 U.S.C. § 157. 5 29 U.S.C. § 158(a)(1).


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Concerted Activity

The NLRA does not define the terms “concerted” or “protected” activity, or “mutual aid or protection.” Rather, over the years, cases decided by the NLRB and the courts have reasoned that to be “concerted,” the activity engaged in must include other employees or be authorized by other employees, and typically does not occur where an employee has acted solely on his or her own. Concerted activity also has been found where the employee’s action is a “logical outgrowth” of previous group activity,6 or anticipates group participation in the future.7 In Timekeeping Systems, Inc., for example, the NLRB determined that concerted activity existed when an employee emailed his coworkers about a proposed change in a company vacation policy in order to arouse support for his opposition to the proposal.8 Similarly, in Citizens Investment Services Corp., a senior financial employee’s email complaints to coworkers and management, as spokesperson for the other employees, was considered to be concerted activity.9 Applying these principles to the instant case, the primary question will be whether Souza’s Facebook postings merely reflected her own individual views regarding her supervisor, or whether they instead constituted a call to collective action? In addition, even assuming the initial comments reflected her personal views, did the fact that coworkers later came to her support convert what might have otherwise been an unprotected individual action into a protected concerted one?

Protected Activity In order to fall within the Section 7 guarantees, it is not enough that the employee’s activity be “concerted” — it must also be “protected.” To be “protected,” the conduct engaged in must be for the purpose of collective bargaining or other “mutual aid or protection.” The U.S. Supreme Court has held that the term “mutual aid or protection” should be defined broadly to include “matters of common concern,”10 and goes beyond activities linked directly with self-organization and collective-bargaining.11 The activity, however, must have a substantial connection to concrete employment interests relating to specific terms and conditions

6 Every Woman’s Place, Inc., 282 N.L.R.B. 413 (1986). 7 Meyers Industries, Inc., 281 N.L.R.B. 882 (1986). 8 323 N.L.R.B. 244 (1997). 9 324 N.L.R.B. 316 (2004), enforced 430 F. 3d 1195 (D.C. Cir. Ct. 2005). 10 N.L.R.B. v. Washington Aluminum Co., 370 U.S. 9 (1962). 11 Eastex, Inc. v. N.L.R.B., 437 U.S. 556 (1978).

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of employment.12 Protected activity also has been found where the employee’s activity was focused on concerns for customers or other employees.13 While some communications among employees can be identified fairly easily as protected concerted activity (for instance, discussions about pay, hours, or benefits), an employee’s negative comments about his or her employer or supervisor are less easily categorized as such. In Konop v. Hawaiian Airlines, the U.S. Court of Appeals for the Ninth Circuit determined that an employee’s remark about the company’s president was protected activity even though it contained “intemperate, abusive or insulting language.”14 The NLRB, as well, has found employee comments that referred to supervisors in derogatory terms and described management as “hypocritical,” “despotic,” and “tyrannical” to be protected concerted activity.15 According to the Board, “unpleasantries uttered in the course of otherwise protected concerted activity do not strip away the Act’s protection.”16 On the other hand, in Five Star Transportation, the Board found that an employee’s comments made to his employer (a public school) and the school board, about the school being “substandard” and one that employs alcohol abusers, were not protected. In the Board’s view, these comments were not sufficiently related to terms and conditions of employment to constitute protected activity for mutual aid or protection. The NLRB and the courts appear to agree that statements made that are maliciously false will not be considered to be protected activity.17 Activity also has been found not to be protected where the activity was abusive;18 was unlawful, violent, in breach of contract or collective-bargaining agreement, or disparaging of an employer’s product; 19 or impaired production or discipline.20 As noted earlier, the NLRA was enacted in 1935, well before the advent of electronic communications such as emails, blogs, and web page postings. In both Timekeeping Systems and Konop, however, the NLRB and the Ninth Circuit recognized that the method by which employee activity is communicated is irrelevant to whether the activity is concerted and

12 Eastex, Inc. v. N.L.R.B., 437 U.S. 556 (1978). 13 Five Star Transportation, 349 N.L.R.B. 8 (2007), enforced 522 F. 3d 46 (1st Cir. 2008). 14 302 F. 3d 868 (9th Cir. 2002), cert. denied, 537 U.S. 1193 (2003). 15 U.S. Postal Service, 241 N.L.R.B. 389 (1979); Harris Corp., 269 N.L.R.B. 733 (1984); Timekeeping Systems, 323 N.L.R.B. 244 (1997). 16 Timekeeping Systems, 323 N.L.R.B. 244 (1997). 17 TNT Logistics North America, Inc., 347 N.L.R.B. 55 (2006); petition for review granted, remanded, 513 F.3d 600 (6th Cir. 2008). 18 N.L.R.B. v. City Disposal System, Inc., 465 U.S. 822 (1984). 19 N.L.R.B. v. Washington Aluminum Co., 370 U.S. 9 (1962). 20 N.L.R.B. v. Motorola, Inc., 991 F.2d 278 (5th Cir. 1993).

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protected. The NLRA’s protections apply to all forms of communication — verbal, written hard copy or electronic.21 Was the Company’s Blogging and Internet Posting Policy Overbroad? In addition to contending that Souza’s termination was unlawful, the Board’s complaint in this case also alleges that the company’s blogging and internet posting policy was so broad that it had the effect of “interfering with, restraining and coercing employees in the exercise of the rights guaranteed in Section 7 of the Act….” In other words, the Board contends the policy was so inclusive that it had the effect of discouraging employees from pursuing their mutual aid and protection through collective action. Here again, the Board will be called upon to apply settled principles in a new context. As a general rule, employers typically are afforded considerable latitude in restricting non-work related activity during company work hours, on company property, and/or using employer-provided equipment.22 The issue involved in American Medical Response is whether these same rules can be extended to off-duty conduct on the Internet. In NLRB v. Motorola, the Fifth Circuit explained that employer policies that govern conduct of employees during the work day are reasonable if they are necessary to avoid “impair[ing] production or discipline.”23 Furthermore, in Martin Luther Memorial Home, Inc., the NLRB upheld a company policy that prohibited employees from “using abusive or profane language in the presence of, or directed toward, a supervisor, another employee,… or any other person on company property.” (Emphasis added.)24 The Board concluded that the employer’s policy was lawful because it was intended to maintain order in the workplace and did not explicitly or implicitly prohibit Section 7 activity. Company policies with reasonable restrictions on posting confidential company information, trade secrets, and confidential information about other employees’ pay and benefits also have survived NLRB scrutiny.25 In Cast-Matic Corp., the company maintained a policy stating that company records and information, as well as customer and supplier information, were confidential and employees were prohibited from disclosing such information to any unauthorized person, inside or outside the company.26 The Board concluded that the policy was lawful because it did not restrict employees from discussing the terms and conditions of their

21 Timekeeping Systems, 323 N.L.R.B. 244 (1997); Konop v. Hawaiian Airlines, 302 F. 3d 868 (9th Cir. 2002), cert. denied, 537 U.S. 1193 (2003). 22 Guard Publishing Co., 351 N.L.R.B. 70 (2007). 23 991 F. 2d 278 (5th Cir. 1993). 24 Martin Luther Memorial Home, Inc., 343 N.L.R.B. 646 (2004). 25 N.L.R.B. v. Brookshire Grocery Co., 919 F. 2d 359 (5th Cir. 1990); Lafayette Park Hotel, 326 N.L.R.B. 824 (1998). 26 350 N.L.R.B. 94 (2007).

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employment and hence did not interfere with their ability to work together for their mutual benefit. Nevertheless, overly-broad employer policies that “unreasonably tend to chill employees in the exercise of their § 7 rights,” or reasonably are construed to do so, generally will be considered to be unfair labor practices.27 In Brockton Hospital v. N.L.R.B., for example, the hospital’s confidentiality policy prohibited employees from discussing any information concerning patients, nurses, doctors, or hospital operations, either inside or outside the hospital, except strictly in connection with hospital business. The D.C. Circuit held the policy to be overly broad because “it would have a tendency to cause nurses who read it to believe it restricted [their] right to discuss hours, wages, and other terms and conditions of employment.”28 When this case eventually reaches the Board, the question will be whether prohibiting employees from posting on their personal Facebook pages comments that are disparaging, discriminatory or defamatory toward the company, superiors or coworkers would “have a tendency to cause [them] to believe that it restricts their right to discuss…[their] terms and conditions of employment.” Significance If the administrative hearing in this case proceeds on schedule, and if the losing party chooses to appeal to the full Board (which seems likely), it will be several months at minimum before we have a full-Board determination. In the meantime, EEAC members are well-advised to review both the scope and enforcement of their internet and social media policies in light of the NLRA protections described in this memorandum. This is true whether your company is union, non-union, or both, because the NLRA protections apply to all covered employers, regardless of their union status. For example, before disciplining an employee for violating your applicable policy, is it possible that the employee’s conduct could be considered a protected, concerted activity? Was it undertaken for the benefit of the individual employee alone, or could it be construed as being directed at some collective action with other employees? Was the activity related in some fashion to employment conditions? In addition, it may be wise to examine the scope of the policy’s prohibitions, particularly if they apply during non-working time and/or at offsite locations. Is the policy limited to the use of company equipment, or does it apply also to communications on private electronic equipment? Finally, and most importantly, can the restriction reasonably be interpreted as limiting the right of employees to communicate with one another, on their own time, about their

27 Lafayette Park Hotel, 326 N.L.R.B. 824 (1998); Martin Luther Memorial Home, Inc., 343 N.L.R.B. 646 (2004). 28 294 F. 3d 100 (D.C. Cir. 2002); cert denied, 537 U.S. 1105 (2003).

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working conditions? If so, you might want to modify the policy to make clear that its purpose is to maintain order in the workplace. We will continue to track the progress of this case as it winds its way through the NLRA administrative enforcement process and report on further developments as they occur. Questions concerning this memorandum should be directed to Judy Lampley or Jeff Norris at 202-629-5650.


16-202 October 14, 2016 To: EEAC Members From: Joe Lakis President Re: EEAC’s Brief in Epic Systems v. Lewis Urges Supreme Court To Rule That

Arbitration Class Waivers Do Not Violate the NLRA EEAC has filed a “friend-of-the-court” brief with the Supreme Court urging the Justices to review and reverse a federal appeals court ruling that invalidated a company’s arbitration agreement because it did not allow wage claims to be brought on a class or collective basis. Our brief in Epic Systems v. Lewis urges the High Court to review and reverse a decision by the Seventh Circuit Court of Appeals1 that relied on the rationale articulated previously by the National Labor Relations Board (NLRB) that a class waiver contained in an arbitration agreement violates the National Labor Relations Act (NLRA). We argue that the NLRB’s so-called “D.R. Horton” anti-class waiver rule conflicts with the Federal Arbitration Act (FAA), which the High Court repeatedly has interpreted as expressing a federal policy favoring the enforcement of mandatory arbitration agreements — including those containing class waivers. Our brief further points out that prior to the Seventh Circuit’s ruling in Epic Systems, every other federal appeals court to have considered the question had rejected the NLRB’s contention that the NLRA confers a non-waivable, substantive right to access class procedures, thus overriding the FAA’s command that arbitration agreements are to be enforced as written.2 A copy of EEAC’s brief to the Supreme Court in Epic Systems is available online at http://www.eeac.org/briefs/EpicSystemsvLewis.pdf.

1 See EEAC Memorandum 16-121 (June 17, 2016). 2 They include the Second, Fifth, and Eighth Circuits. See EEAC Memoranda 13-017 (January 25, 2013), 13-182 (September 13, 2013), and 13-239 (December 6, 2013). More recently, however, the Ninth Circuit issued a ruling agreeing with the Seventh Circuit. See EEAC Memorandum 16-187 (September 23, 2016). The widening Circuit split increases the likelihood that the Supreme Court will take up the issue.







http://www.eeac.org/briefs/EpicSystemsvLewis.pdf

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Background Enforced by the NLRB, the National Labor Relations Act establishes the rights of employees to engage (or refrain from engaging) in union organizing and collective bargaining activities with their employers.3 Section 7 of the NLRA guarantees the right of employees to engage in protected concerted activity “for the purpose of collective bargaining or other mutual aid or protection.”4 Section 8(a)(1) of the NLRA prohibits employers from interfering with, restraining, or coercing employees in the exercise of their Section 7 rights.5 A separate federal law, the Federal Arbitration Act, provides that agreements to arbitrate are to be enforced to the same extent, and subject to the same defenses, as any other contract. Thus, only generally applicable contract defenses — such as fraud or illegality, for instance — may be used to invalidate an arbitration agreement. The Supreme Court has consistently interpreted the FAA as expressing a federal policy favoring arbitration of disputes generally, including employment-related claims. In addition, the Court has held on a number of occasions that an arbitration agreement is not unenforceable simply because it contains a class waiver provision restricting access to class procedures.6 In AT&T Mobility LLC v. Concepcion,7 for instance, the High Court invalidated a 2005 California Supreme Court ruling that conditioned the enforceability of an arbitration agreement on the availability of class-wide arbitration as inconsistent with, and thus preempted by, the FAA. In reversing the California court’s rationale, the Supreme Court observed that class procedures interfere with many of the fundamental attributes of arbitration, such as allowing for efficient, streamlined procedures tailored to the particular type of dispute at issue. The NLRB’s Controversial D.R. Horton Decision Despite the High Court’s clear pronouncements upholding arbitration agreements containing class waivers, the NLRB takes the position that arbitration agreements containing class waivers violate the NLRA. In 2012, the NLRB ruled in D.R. Horton that an employment arbitration agreement containing a class waiver provision unlawfully deprives employees of their right under Section 7

3 For more information on the NLRA and the NLRB, please see EEAC Memoranda 16-099 (May 20, 2016) and 10-148 (August 6, 2010). 4 29 U.S.C. § 157. 5 29 U.S.C. § 158(a)(1). 6 See, e.g., EEAC Memoranda 15-256 (December 24, 2015); 13-128 (June 28, 2013); 11-087 (May 6, 2011); and 10-082 (May 7, 2010). 7 See EEAC Memorandum 11-087.








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of the NLRA to engage in protected concerted activity, finding that access to such procedures is a non-waivable, “substantive” right.8 Although the Fifth Circuit Court of Appeals reversed, finding that no court had ever interpreted the NLRA to impose a categorical prohibition on the enforcement of class waivers contained in arbitration agreements,9 the NLRB has continued to enforce its D.R. Horton ruling in other jurisdictions under its so-called “non-acquiescence” policy of disregarding adverse lower court rulings absent a definitive ruling by the Supreme Court.10 Epic Systems v. Lewis Jacob Lewis worked for Epic Systems Corporation (Epic) as a technical writer. In April 2014, Epic sent an email to staff advising that going forward all wage and hour disputes had to be submitted to binding, individual arbitration. The arbitration agreement, which employees were required to sign as a condition of employment, contained an express clause barring class, collective, and representative proceedings. Lewis subsequently brought a class-based lawsuit in federal court, accusing the company of unlawfully misclassifying employees under the Fair Labor Standards Act. Citing the agreement to arbitrate, Epic asked the trial court to dismiss the suit and order Lewis into individual arbitration. Deferring to the NLRB’s position on the question, the trial judge held that the class waiver was inconsistent with the NLRA’s “concerted activity” protections, finding that there was no conflict with the FAA because the FAA does not mandate enforcement of arbitration agreements that “conflict with substantive provisions” of other federal laws, like the NLRA. The Seventh Circuit, likewise according great deference to the NLRB’s position, affirmed on Epic’s appeal.11 Epic has now asked the Supreme Court to weigh in. EEAC’s Brief EEAC’s brief urges the Supreme Court to accept review of this case, arguing that the NLRB’s D.R. Horton rule is inconsistent with the Court’s repeated admonitions that rules imposing burdens on arbitration agreements that do not exist for other types of contracts are incompatible with, and thus displaced by, the FAA. We point out that the Seventh Circuit’s Epic Systems decision is an especially good candidate for review because it, as well as the Ninth Circuit’s more recent ruling in Morris v.

8 See EEAC Memorandum 12-006 (January 13, 2012). 9 See EEAC Memoranda 13-239 (December 6, 2013) and 15-231 (November 20, 2015). 10 See EEAC Memorandum 15-097 (May 15, 2015). 11 See EEAC Memorandum 16-121.






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Ernst & Young,12 have created a clear conflict in the lower federal courts on the enforceability under the NLRA of arbitration agreements containing class waivers. Our brief contends that without definitive guidance from the Supreme Court, the NLRB will continue to enforce the D.R. Horton rule under its policy of “non-acquiescence.” Thus, absent High Court review, employers with arbitration agreements containing class waivers face an unavoidable risk that those agreements will be invalidated by the NLRB. That, we argue, will discourage the use of arbitration, which, as the Supreme Court has well recognized, benefits employers and employees alike. For employees, we observe, the speed of resolving disputes through arbitration can be particularly advantageous, especially for those who will continue their employment well after their claims have been addressed. For employers, the well-known practical and financial advantages to arbitration are likely to disappear altogether if they are forced to submit to complex, class-based procedures, despite having expressly agreed to waive such procedures. In sum, our brief contends that the D.R. Horton rule creates a chilling effect on employers’ efforts to establish binding arbitration programs, making it extremely difficult to effectuate the aims and practical benefits underlying employment arbitration. Persistent questions in the courts regarding its validity threaten to deprive employers and employees of the many well-established benefits afforded by an arbitral forum, including speedier, less expensive resolution.

Questions concerning this memorandum should be directed to Rae Vann at 202-629-5650.

12 See EEAC Memorandum 16-187.



15-097 May 15, 2015 To: EEAC Members From: Joe Lakis President Re: NLRB Continues To Find Fault With Employment Arbitration Agreements As we have reported previously, the National Labor Relations Board (NLRB or Board) has taken an extremely dim view of mandatory employment arbitration agreements, despite a long line of recent decisions by the U.S. Supreme Court and federal appeals courts holding that mandatory arbitration agreements are generally enforceable. In early 2012, for example, in its highly controversial ruling in D.R. Horton, the Board found that the nation's basic labor law — the National Labor Relations Act (NLRA) — prohibits enforcement of arbitration agreements that limit collective or class action litigation about working conditions.1 Although the Board’s D.R. Horton ruling was subsequently reversed by the Fifth Circuit Court of Appeals,2 the Board, applying its so-called “non-acquiescence” doctrine (discussed in more detail below), has not backed down from its anti-arbitration position, and has even attempted to expand it. This EEAC memorandum provides an update on where we are today regarding the NLRB’s ongoing campaign to challenge mandatory employment arbitration agreements. Background The five-member NLRB is the quasi-judicial body responsible for interpreting and enforcing the National Labor Relations Act, the 80-year-old federal law that governs labor-management relations. The five current members, three Democrats and two Republicans, were all appointed by President Obama and confirmed by the U.S. Senate. As EEAC has been reporting, the so-called “Obama” Board has been drawing considerable attention by issuing a

1 See EEAC Memorandum 12-006 (January 13, 2012). 2 See EEAC Memorandum 13-239 (December 6, 2013).



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number of controversial decisions that purport to extend the reach of the NLRA well beyond the traditional union-management context.3 In January 2012, the NLRB issued its controversial decision in D.R. Horton, finding that a mandatory arbitration agreement containing a clause barring class-based or collective claims violated the NLRA and therefore was unenforceable.4 Section 7 of the NLRA gives employees the right to engage in concerted activity for their mutual aid and protection. In D.R. Horton, the Board reasoned that this includes the right to file collective or class action litigation about terms and conditions of employment. Thus, according to the Board, an employer violates the NLRA when it maintains a policy that would reasonably be construed to restrict the ability of employees to file collective or class action litigation regarding wages, hours, or other matters related to working conditions. Despite a long line of recent Supreme Court decisions interpreting the Federal Arbitration Act (FAA) to uphold the use of pre-dispute arbitration agreements so long as no substantive rights have been waived,5 the NLRB reasoned in D.R. Horton that the right to engage in collective action to address working conditions, including the right to file class action litigation, was a substantive right under the NLRA. On the employer’s appeal, the Fifth Circuit6 reversed the Board, characterizing its decision as effectively imposing an across-the-board ban on class waivers. The appeals court stressed the strong federal policy expressed in the FAA favoring arbitration, and also observed that there is nothing in the NLRA that expressly bars class waivers or overrides the FAA.7 The NLRB’s “Non-Acquiescence” Doctrine Although common sense would seem to dictate that the NLRB, as a federal agency, would honor rulings issued by the federal appeals courts, this is not the case. To the contrary, in Murphy Oil USA, Inc.,8 a decision issued in October 2014, the Board reaffirmed its holding in D.R. Horton by exercising its long-standing “non-acquiescence” doctrine. Under its non-

3 See, for example, EEAC Memorandum 15-061 (March 27, 2015). 4 See EEAC Memorandum 12-006. 5 See, for example, EEAC Memoranda 14-047 (March 7, 2014), 13-128 (June 28, 2013), and 12-035 (February 17, 2012). 6 The NLRA grants parties aggrieved by an NLRB decision wide latitude in selecting a federal circuit court to review the decision, permitting review before the circuit in which the alleged unfair labor practice occurred, in the D.C. Circuit, or in any other circuit in which the employer “resides” or conducts business. In this case, the employer sought review in the Fifth Circuit, covering Louisiana, Mississippi, and Texas, as it conducts business in all three states. 7 See EEAC Memorandum 13-239. Several other federal appeals courts have also rejected the Board’s reasoning in D.R. Horton. See, for example, EEAC Memoranda 13-182 (September 13, 2013), 13-190 (September 27, 2013), and 14-098 (May 9, 2014). 8 361 NLRB No. 72 (October 28, 2014).











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acquiescence policy, the Board may refuse to abide by the holding of a Circuit Court in any future proceedings that do not involve the same parties. Under the logic of its non-acquiescence doctrine, the Board reasons that it does not have to abide by adverse rulings by one or more Circuit Courts of Appeals with which the agency disagrees. Unless and until the U.S. Supreme Court issues a definitive ruling on the underlying issue, the Board reserves the right to exercise its non-acquiescence doctrine whenever it chooses. While the Board’s non-acquiescence doctrine is long standing, the federal courts have criticized it. For example, in discussing the doctrine, the Seventh Circuit referred to the Board’s “flagrant disregard of judicial precedent” as “well known.”9 Indeed, even Board members themselves have criticized the doctrine. Board member Harry Johnson, who dissented in the Murphy Oil ruling, accused the majority of “doubl[ing] down on a mistake that, by now, is blatantly apparent.” Board Continues To Expand Its D.R. Horton Doctrine In Murphy Oil, the Board not only reaffirmed its D.R. Horton decision by finding the employer’s mandatory arbitration agreement unlawful, it also found that the employer violated the NLRA by the mere attempt to enforce its arbitration agreement. The Murphy Oil case stemmed from a group of employees who had filed a collective action in federal court alleging violations of the Fair Labor Standards Act (FLSA) regarding payment of overtime and off-the-clock work. In response, the company filed a motion to compel arbitration and dismiss the lawsuit based on the mandatory arbitration agreement the employees had signed. After the employees brought an unfair labor practice charge with the NLRB alleging the arbitration agreement violated the NLRA, the question eventually ended up before the Board. In addition to finding the arbitration agreement unlawful, the Board also addressed the issue of whether Murphy’s attempts to enforce the agreement through legal filings constituted an independent violation of the NLRA. Under the Board’s reasoning, the company acted with an illegal objective when it sought to enforce its “unlawful” arbitration agreement. As a result, the Board found that Murphy’s motion to compel arbitration was a separate violation of the NLRA. In addition to ordering the company to cease and desist, the Board also ordered it to notify the court that it had withdrawn the arbitration agreement and that it no longer opposed the employees’ FLSA lawsuit.10

9 Nielsen Lithographing Co. v. NLRB, 854 F.2d 1063, 1066 (7th Cir. 1988). 10 Murphy Oil has appealed the NLRB’s ruling to the Fifth Circuit. See Murphy Oil USA, Inc. v. NLRB, No. 14-60800 (5th Cir. appeal docketed November 7, 2014).

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We should also point out that the NLRB’s Administrative Law Judges (ALJs), who initially hear and rule on disputes before they go to the full NLRB, are required to follow Board precedent unless the Board reverses itself or the Supreme Court rejects it. Since D.R. Horton was decided, ALJs have regularly found that mandatory arbitration agreements that limit the right to bring collective or class actions violate the NLRA. Moreover, by invoking its non-acquiescence doctrine in Murphy Oil, the Board has effectively precluded its ALJs from ruling to the contrary. Indeed, a recent case that illustrates the broad impact of the Board’s decision in Murphy Oil is Century Fast Foods, JD(SF)-17-15 (April 24, 2015). In this case, an employer operating several restaurant franchises maintained a mandatory arbitration agreement. In response to the Board’s complaint that its arbitration agreement violated the NLRA, the company argued that the Board had wrongly decided D.R. Horton and Murphy Oil. In response, the ALJ observed:

Unless there is an unexpected reversal by the Board on its views in these matters in the near future, it is reasonable to infer that the Board will continue on this path unless the Supreme Court overrules it, or until all Circuit courts disagree with the Board and its orders become unenforceable … Thus, employers — and their representatives — are by now on notice that the Board will continue to find these types of compulsory arbitration agreements and actions to enforce them unlawful.

The Number of Pending Cases Challenging Employer Motions to Compel Arbitration Is Growing Based on EEAC’s review of unresolved cases pending before the Board, we found more than 20 ALJ decisions that held that employers violated the NLRA by filing motions to compel arbitration. While these cases involve unfair labor practice charges filed in many regions of the country, more than half are pending in the Board’s two regional offices for California. Other ALJ decisions originated in the NLRB’s Oakland (2), Phoenix (2), New York (2), Denver (1), Saint Louis (1), and Philadelphia (1) regions. Attached to this EEAC memo is a chart that provides citations to these cases. Policies Regarding Confidentiality of Arbitration Proceedings at Risk? In our review of recent decisions issued by NLRB ALJs, we also observed that some cases have raised the issue of whether an employer can require that arbitration proceedings be kept confidential without violating the NLRA. In Ralph’s Grocery Company, JD(SF)-35-13 (July 31, 2013), for example, the employer maintained a mandatory arbitration agreement that included the following provision:

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Except and only to the extent it may be required by applicable law, the parties and the Qualified Arbitrator shall maintain the existence, content, and outcome of any arbitration proceedings held pursuant to this Arbitration Policy in the strictest confidence and shall not disclose the same without prior written consent of all the parties.

The ALJ found this policy to be overly broad, because employees could reasonably construe it as barring employee discussions of arbitration proceedings regarding terms or conditions of employment. Further, the ALJ found the language to be a barrier to employee initiation of group action because it precluded employees from “even telling each other they have initiated individual arbitration proceedings.” In Professional Janitorial Service of Houston, Inc., JD(NY)-28-14 (June 16, 2014), the employer maintained a mandatory arbitration policy that required all statements made or revealed during arbitration to be confidential, and prohibited both the company and employees from revealing any such statements or information except “on a ‘need to know’ basis or as permitted or required by law.” The ALJ found the provision unlawful because it limited the ability of employees to freely discuss wages and conditions of employment, noting that in an arbitration proceeding, an employee could learn a previously unknown facet of the employer’s employment policies. According to the ALJ, the NLRA protects the rights of employees to discuss their terms and conditions of employment “whether those terms are common knowledge, are set forth in a contract, or were discovered at arbitration proceeding.” Significance We are beginning to see the ripple effect from the Board’s insistence on adhering to its anti-arbitration position in spite of the rejection of that position by several different federal appeals courts. In addition to NLRB challenges to arbitration agreements, we are seeing an increasing amount of litigation challenging related issues such as employer motions to compel arbitration and confidentiality provisions. As a practical matter, we do not expect this trend to end, notwithstanding the headaches it is causing for many employers, unless and until the Supreme Court decides the matter or a new Board reverses course. As always, EEAC will continue to monitor these cases and report on further important developments as they occur. Questions concerning this memorandum should be directed to Mike Eastman at 202-629-5650.


ALJ Decisions Finding Employer Motions To Compel Arbitration Unlawful Charged Party Date Citation NLRB Region Leslie’s Poolmart, Inc.

1/17/14 JD(SF)-02-14 Los Angeles

Sprout’s Farmers Market

2/18/14 JD(ATL)-06-14 Los Angeles

CPS Security (USA), Inc.

2/11/14 JD(ATL)-04-14 Phoenix

Brinker International Payroll Co.

6/4/14 JD(NY)-27-14 Denver

The Neiman Marcus Group, Inc.


Bristol Farms 10/17/14 JD(SF)-51-14 Los Angeles Century Fast Foods, Inc.


Acuity Specialty Products, Inc.

7/21/14 JD(NY)-30-14 Oakland

Network Capital Funding Corp.

3/5/14 JD(ATL)-09-14 Los Angeles

AWG Ambassador, LLC

10/17/14 JD(SF)-52-14 Phoenix

Adriana’s Insurance Services, Inc.


Cellular Sales of Missouri, LLC

8/19/13 JD-57-13 St. Louis

JP Morgan Chase & Co.

8/21/13 JD(NY)-40-13 New York

Nijjar Realty, Inc. 12/4/13 JD(ATL)-31-13 Los Angeles Kenai Drilling Ltd. 4/13/15 JD(SF)-13-15 Los Angeles Flyte Tyme Worldwide

6/3/14 JD-31-14 Philadelphia

UnitedHealth Group, Inc.

8/5/14 JD(NY)-32-14 New York

Solarcity Corp. 3/31/15 JD(NY)-13-15 Oakland Covenant Care California


Ralphs Grocery Co. 7/31/13 JD(SF)-35-13 Los Angeles Fuji Food Products, Inc.



13-239 December 6, 2013 To: EEAC Members From: Joe Lakis President Re: Fifth Circuit Reverses NLRB, Rules in D.R. Horton That Arbitration Class

Waiver Does Not Violate Federal Labor Law In a welcome decision that should help preserve the continued vitality of employment arbitration as a fair and effective alternative to expensive court litigation, the U.S. Court of Appeals for the Fifth Circuit has reversed a controversial decision by the National Labor Relations Board (NLRB) that barred the use of class waivers in employment arbitration agreements. The appeals court concluded that the NLRB’s ruling in D.R. Horton was inconsistent with the Federal Arbitration Act (FAA). The Fifth Circuit’s decision in D.R. Horton, Inc. v. NLRB, No. 12-60031 (5th Cir. December 3, 2013), rejected the NLRB’s contention that arbitration class waivers impermissibly interfere with the right of employees to engage in protected concerted activity in violation of the National Labor Relations Act (NLRA). Agreeing with arguments put forth by EEAC in our friend-of-the-court brief,1 the court concluded that the NLRB’s no-waiver rule, though neutral on its face, effectively bars the enforcement of bilateral arbitration agreements, thus treating such agreements less favorably than other types of contracts — contrary to the aims and purposes of the FAA. The Fifth Circuit also concluded that the NLRB’s views were not entitled to deference, and in doing so has joined every other circuit court to have considered the issue. A copy of the Fifth Circuit’s D.R. Horton decision is available online at http://www.ca5.uscourts.gov/opinions/pub/12/12-60031-CV0.pdf.

1 See EEAC Memorandum 12-117 (June 15, 2012).


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Background The nearly 80-year-old NLRA establishes the rights of employees to engage (or refrain from engaging) in union organizing and collective bargaining activities with their employers.2 Section 7 of the NLRA guarantees the right of employees to engage in protected concerted activity “for the purpose of collective bargaining or other mutual aid or protection.” Section 8(a)(1) of the NLRA prohibits employers from interfering with, restraining, or coercing employees in the exercise of their Section 7 rights. The NLRA is enforced by the NLRB, a quasi-judicial entity whose five members are appointed by the President. The FAA provides that agreements to arbitrate are to be enforced to the same extent as any other type of valid contract. Two decades ago the U.S. Supreme Court ruled in Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991), that discrimination claims brought under the Age Discrimination in Employment Act (ADEA) can be subject to binding arbitration. The Court noted that by choosing arbitration, parties do not give up their substantive rights, but rather elect to have their claims heard in an arbitral forum instead of a court. In the years since Gilmer was decided, the High Court repeatedly has reaffirmed the strong federal policy established by the FAA favoring the enforcement of private arbitration agreements — including those in which the parties have agreed to forgo certain procedures, such as the ability to bring class-based claims. In Stolt-Nielsen v. Animalfeeds,3 for instance, the Court held that imposing class arbitration on parties who have not expressly agreed to authorize such procedures is inconsistent with the FAA. Similarly, in AT&T Mobility v. Concepcion,4 the Court invalidated a California state law that effectively made it much more difficult to enforce arbitration agreements containing class action waiver provisions than other types of contracts.5 The D.R. Horton Case D.R. Horton requires that its employees, as a condition of employment, agree to submit any workplace disputes to arbitration. The company’s arbitration agreement contains a class action waiver provision that bars an employee from bringing a class-type or collective claim on behalf of a group of employees. In 2008, Horton received a demand for arbitration from Michael Cuda on behalf of himself and a class of similarly situated employees alleging violations of the Fair Labor Standards Act (FLSA). The company refused, pointing to the class action waiver contained in the arbitration agreement. After Cuda filed an unfair labor practice charge, the Board’s regional

2 For a primer on the NLRA, please see EEAC Memorandum 10-148 (August 6, 2010). 3 See EEAC Memorandum 10-082 (May 7, 2010). 4 See EEAC Memorandum 11-087 (May 6, 2011). 5 See also American Express v. Italian Colors, analyzed in EEAC Memorandum 13-128 (June 28, 2013).





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director issued a complaint alleging that Horton’s arbitration agreement, by restricting class or collective claims, violated the NLRA. The case was heard by an administrative law judge, who ruled that while the class waiver itself was valid, to the extent that the arbitration agreement could lead employees “reasonably to believe that they cannot file charges with the NLRB,” it violated the NLRA. The dispute then went to the NLRB members for a final administrative determination. The Board concluded that the ability to file employment-related claims on a class or collective basis is protected conduct under Section 7, and that Horton’s arbitration agreement — which prohibited such activity — therefore violated the NLRA. In so ruling, the Board found that barring enforcement of agreements containing class action waivers did not impermissibly conflict with the FAA’s “pro-arbitration policy,” because such agreements interfere with NLRA substantive rights (emphasis added). Fifth Circuit: NLRB’s Ruling Conflicts With the FAA Final NLRB rulings can be appealed to the courts, and Horton exercised its right to appeal to the Fifth Circuit.6 A three-judge panel of the court reversed the Board in a 2 - 1 ruling.7 The court first acknowledged that the courts are to defer to the Board “when it interprets an ambiguous provision of a statute that it administers,” i.e., the NLRA. But the court observed that no deference is due, however, where the Board’s actions “potentially trench upon federal statutes and policies unrelated to the NLRA.” Here, the Fifth Circuit said there is no question that the NLRA was intended to strengthen employee bargaining rights by providing for collective activity, and that the Board and some courts have held that an employee’s right to pursue collective action is protected. At the same time, the court noted, no court has ever held that the NLRA prohibits the enforcement of class waivers contained in arbitration agreements. The panel majority explained that the Board’s position might carry sway were it not for the fact that the FAA “has equal importance” in resolution of the issue. Indeed, the court observed, the body of case law decided under the FAA “points us in a different direction than the course taken by the Board,” noting that the Fifth Circuit has held previously — consistent with Supreme Court precedent — that a party is not deprived of statutory rights as a result of binding arbitration, and the availability of class action procedures is not a substantive right in any event. Furthermore, under the FAA, arbitration agreements are to be enforced according to their terms, the appeals court said. The only exceptions to that rule are where (1) grounds exists for 6 The Fifth Circuit hears appeals from federal trial courts in Louisiana, Mississippi, and Texas. 7 Before addressing the merits, the court disposed of a number of ancillary issues pertaining to the Board’s general authority, which we do not discuss in this memo.

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invalidating the agreement, as would apply to any other type of contract; or (2) there is a conflict between the FAA and another statutory requirement that takes precedence. The Board argued that both exceptions apply to D.R. Horton’s agreement. The Fifth Circuit disagreed. First, the court pointed out that like the California law at issue in the Concepcion case, the Board’s decision effectively imposed an across-the-board ban on class waivers — the effect of which is to disfavor arbitration. It observed, “As Concepcion held as to class-wide arbitration, requiring the availability of class actions interferes with fundamental attributes of arbitration and thus creates a scheme inconsistent with the FAA.” The court then found that there is nothing in the NLRA to suggest that Congress intended it to bar class waivers or to override the FAA. Indeed, the court observed that even the Board itself acknowledged that there is a long and rich history of arbitration under the NLRA. “Having worked in tandem with arbitration agreements in the past, the NLRA has no inherent conflict with the FAA,” the appeals court found. It concluded by pointing out that every other federal appeals court that has weighed in on the issue “has either suggested or expressly stated that they would not defer to the NLRB’s rationale, and held arbitration agreements containing class waivers enforceable.” Significance The Fifth Circuit ruling in D.R. Horton is important because it confirms that the class waiver rule articulated by the NLRB is patently inconsistent with the Supreme Court’s jurisprudence endorsing arbitration as required under the FAA. We should point out, however, that despite federal court rulings to the contrary, NLRB administrative law judges are continuing to rely on the board’s questionable rationale to find violations of the NLRA based on the existence of an arbitration agreement containing a class waiver clause.8 The Board now has the option of asking the full Fifth Circuit to review the panel’s ruling. As always, we will continue to monitor and report on any further significant developments as they occur. Questions concerning this memorandum should be directed to Rae Vann or Mike Eastman at 202-629-5650. 8 See, e.g., Nijjar Realty, Inc. and Haro, NLRB Case No. 21--CA--092054 (ALJ December 4, 2013).


13-017 January 25, 2013 To: EEAC Members From: Jeffrey A. Norris President Re: Eighth Circuit in Owen v. Bristol Care Enforces Arbitration Agreement’s

Class Action Waiver Clause, Takes a Swipe at NLRB’s D.R. Horton Ruling The U.S. Court of Appeals for the Eighth Circuit has ruled, in a lawsuit brought under the federal Fair Labor Standards Act (FLSA), that a mandatory arbitration agreement containing a class action waiver is enforceable. In so ruling, the appeals court explicitly considered — and then flatly rejected — the reasoning applied by the National Labor Relations Board (NLRB) in its controversial 2012 decision in D.R. Horton, Inc., where the Board held that class action waivers violate the National Labor Relations Act (NLRA). The decision by the Eighth Circuit in Owen v. Bristol Care, Inc., No. 12-1719 (8th Cir. January 7, 2013), reverses a trial court ruling that relied on the NLRB’s Horton ruling in refusing to enforce arbitration of an FLSA claim because the arbitration agreement contained a class action waiver clause. Taking dead aim at the Horton ruling, the Eighth Circuit states unequivocally that it had no obligation whatsoever to defer to the NLRB, pointing to twenty years of U.S. Supreme Court precedent favoring the use of arbitration as an alternative to protracted and expensive court litigation. The Eighth Circuit’s decision in Owen v. Bristol Care is available online at http://www.ca8.uscourts.gov/opndir/13/01/121719P.pdf. Background The Federal Arbitration Act (FAA) requires courts to enforce agreements to arbitrate disputes, subject to only two exceptions: (1) where Congress clearly has barred arbitration of a particular claim, or (2) where the agreement is unenforceable on grounds that would invalidate any other type of contract, such as fraud, duress, or unconscionability.

http://www.ca8.uscourts.gov/opndir/13/01/121719P.pdf

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Ever since the U.S. Supreme Court ruled in Gilmer v. Interstate/Johnson Lane Corp.1 that arbitration agreements are valid as to employment discrimination claims, many employers have adopted employee dispute resolution (EDR) programs with a mandatory arbitration component as a means of resolving workplace disputes. In the more than twenty years since Gilmer, the U.S. Supreme Court has issued a string of subsequent rulings favoring arbitration, including several in the employment context.2 Because the law is now well-settled that employment arbitration agreements are enforceable under the Federal Arbitration Act, critics of mandatory arbitration have focused legal challenges on arguments that arbitration agreements are not enforceable because they are not valid contracts. For example, EEAC recently filed a friend-of-the-court brief urging the Supreme Court to reverse a ruling by the U.S. Court of Appeals for the Second Circuit that invalidated an arbitration agreement because it contained a class action waiver clause.3 The appeals court concluded that the clause prevented the plaintiffs from vindicating their statutory rights. In contrast, many other federal courts have upheld arbitration agreements containing class action waivers, including in the context of claims brought under the FLSA. For example, the Eleventh Circuit in 2005 upheld an arbitration agreement with a class action waiver clause in the case of Caley v. Gulfstream Aerospace Corporation, noting that “the fact that certain litigation devices may not be available in an arbitration is part and parcel of arbitration’s ability to offer simplicity, informality and expedition.”4 And in 2011, the Supreme Court itself in AT&T v. Concepcion struck down a state court decision making class action waiver clauses unenforceable.5 The NLRB’s D.R. Horton Decision Despite the twenty years of Supreme Court precedent favoring arbitration in the employment context, the NLRB threw arbitration opponents a lifeline last year when it ruled in D.R. Horton that the ability to file employment-related claims as a class was protected conduct under Section 7 of the National Labor Relations Act (NLRA).6 The NLRB concluded that an arbitration agreement containing a class action waiver unlawfully interfered with, restrained

1 500 U.S. 20 (1991). 2 See, for example, EEAC Memoranda 12-249 (December 28, 2012), 12-035 (February 17, 2012), 11-242 (December 23, 2011), 10-122 (July 2, 2010) and 01-063 (March 30, 2001). 3 See EEAC Memorandum 13-001 (January 4, 2013). 4 See EEAC Memorandum 05-251 (November 11, 2005). 5 See EEAC Memoranda 11-087 (May 6, 2011) and 11-110 (June 10, 2011). Plaintiffs’ lawyers continue to try to invalidate class action waivers on other grounds, however. See, for example, EEAC Memorandum 13-001. 6 See EEAC Memorandum 12-006 (January 13, 2012).













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and/or coerced employees seeking to assert their NLRA rights, creating another basis for opponents to attack the validity of an arbitration agreement.7 Owen v. Bristol Care Bristol Care, Inc. operates residential elder care facilities. Its employees must agree to resolve disputes with the company by binding arbitration, including any FLSA claims that may arise. Sharon Owen, a facility administrator, filed an FLSA lawsuit in federal court on behalf of herself and other current and former Bristol Care administrators, alleging that the company intentionally misclassified its administrators as “exempt” employees under the FLSA and required them to work more than 40 hours a week without overtime compensation. Bristol Care then asked the trial court to set the lawsuit aside and send the case to arbitration as required under the company’s arbitration agreement. The trial court refused, concluding that the class action waiver made the arbitration agreement invalid based on the reasoning used by the NLRB in D.R. Horton. Eighth Circuit Rejects D.R. Horton On Bristol Care’s appeal, the Eighth Circuit8 reversed, and ordered the trial court to send the case to arbitration. The appeals court set the background for its decision by first summarizing the relevant Supreme Court rulings, noting that the Federal Arbitration Act establishes a liberal federal policy favoring arbitration and requires courts to enforce arbitration agreements according to their terms unless Congress specifically has said otherwise. The Eighth Circuit then observed that nothing in the FLSA indicates that Congress intended to bar employees from either agreeing to arbitrate their FLSA claims or from agreeing to do so individually. The Eighth Circuit then turned to the NLRB’s decision in D.R. Horton, explicitly rejecting it for different reasons. First, the court said that D.R. Horton applies only to arbitration agreements that bar all protected concerted action. In contrast, the arbitration agreement involved in this case says specifically that it does not prevent an employee from filing an administrative complaint with the U.S. Department of Labor, which enforces the FLSA, or with the Equal Employment Opportunity Commission (EEOC), which enforces federal nondiscrimination laws.9

7 D.R. Horton has appealed the NLRB’s decision to the Fifth Circuit, and EEAC has filed an amicus curiae brief urging the court to overturn the NLRB’s decision. See EEAC Memorandum 12-117 (June 15, 2012). 8 The Eighth Circuit hears appeals from trial courts in Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota. 9 The Supreme Court ruled years ago that a mandatory arbitration agreement cannot interfere with an employee’s right to file an administrative complaint. See EEAC Memorandum 02-015 (January 18, 2002).



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Next, the Eighth Circuit stated that even if D.R. Horton addressed the type of class action waiver involved in this case, the court still would not have to follow the NLRB. Federal courts, the Eighth Circuit pointed out, are not obligated to defer to the NLRB’s interpretation of Supreme Court decisions. Noting that a number of other federal appeals courts previously have ruled that arbitration agreements containing class action waivers are enforceable in FLSA cases, the Eighth Circuit called these decisions “consistent with more than two decades of pro-arbitration Supreme Court precedent.” Significance

The Bristol Care case marks the first time to the best of our knowledge that a federal appeals court has commented on the NLRB’s D.R. Horton decision, and that commentary was anything but favorable. Even while the D.R. Horton decision itself is still on appeal in the Fifth Circuit, the Eighth Circuit has now rejected the NLRB decision out of hand, under the legal principle that federal courts do not have to defer to the decisions of a federal agency interpreting Supreme Court precedent. Questions concerning this memorandum should be directed to Ann Reesman or Rae Vann at 202-629-5650.


12-117 June 15, 2012 To: EEAC Members From: Jeffrey A. Norris President Re: EEAC’s Brief in D.R. Horton Urges Fifth Circuit To Reject Anti-

Arbitration Ruling Issued by National Labor Relations Board EEAC has filed a friend-of-the-court brief with the U.S. Court of Appeals for the Fifth Circuit urging the court to overturn an anti-arbitration ruling issued earlier this year by the National Labor Relations Board (NLRB), that if allowed to stand will have a chilling impact on mandatory arbitration agreements designed to resolve employment disputes. The NLRB is the five-member quasi-judicial agency that enforces the National Labor Relations Act (NLRA). Our brief to the appeals court in D.R. Horton, Inc. v. National Labor Relations Board, No. 12-60031 (5th Cir. 2012), reiterating the arguments we made in an earlier brief filed with the NLRB prior to its issuing a ruling,1 contends that the Board erred in finding that D.R. Horton violated the NLRA by requiring employees to agree to submit their disputes to binding arbitration on an individual, not class-wide, basis. We contend the Board’s ruling is in direct conflict with U.S. Supreme Court precedent interpreting the Federal Arbitration Act (FAA) as supporting a strong federal policy favoring arbitration of private disputes. By ruling that a mandatory arbitration agreement which contains a clause barring class-based or collective claims violates the NLRA, we point out that the NLRB’s decision subjects any employer to potential liability under the NLRA simply by requiring its employees to submit to individual, as opposed to class, arbitration, in direct conflict with the FAA. A copy of EEAC’s brief to the Fifth Circuit is available on our website at http://www.eeac.org/web/amicus/index.asp.


http://www.eeac.org/web/amicus/index.asp


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Background The NLRA is the almost 80-year-old federal law that establishes the rights of employees to engage (or refrain from engaging) in union-organizing and collective-bargaining activity.2 Section 7 of the NLRA guarantees the right of employees to engage in protected concerted activity “for the purpose of collective bargaining or other mutual aid or protection.” Section 8(a)(1) of the law in turn prohibits employers from interfering with, restraining, or coercing employees in the exercise of their so-called Section 7 rights. The Federal Arbitration Act provides that agreements to arbitrate are to be enforced to the same extent, and subject to the same defenses, as any other type of contract. Only generally applicable contract defenses — such as fraud, duress, or unconscionability — can be used to invalidate an arbitration agreement. The U.S. Supreme Court repeatedly has reinforced the strong federal policy established by the FAA favoring arbitration generally, as well as specifically in the context of class action waiver provisions.3 Just last year in AT&T Mobility v. Concepcion, for instance, the High Court struck down a California state law that effectively rendered unenforceable arbitration agreements that contained class action waiver provisions. The Court pointed out that efforts to bar class action waivers, or stated another way to impose class arbitration on parties who have not expressly agreed to such procedures, stand in direct conflict with the FAA.4 The D.R. Horton Case D.R. Horton requires its employees, as a condition of employment, to agree to submit their workplace disputes to arbitration. The arbitration agreement contains a class action waiver provision that bars the pursuit of class-wide or collective claims on behalf of a class or group of employees in a single arbitration proceeding. On February 13, 2008, the company received a demand for arbitration on behalf of Michael Cuda and a class of similarly-situated employees alleging violations of the Fair Labor Standards Act (FLSA). D.R. Horton refused to arbitrate the FLSA claims on a class-wide basis, however, pointing to the class action waiver contained in the arbitration agreement. Cuda then filed an unfair labor practice charge with the NLRB, which issued a complaint alleging that the arbitration agreement violated the NLRA by restricting class or collective claims.

2 See EEAC Memorandum 10-148 (August 6, 2010) for additional background on the NLRA. 3 See, for example, EEAC Memoranda 12-035 (February 17, 2012), 11-242 (December 23, 2011), 10-122 (July 2, 2010), and 09-078 (April 10, 2009). 4 See EEAC Memorandum 11-087 (May 6, 2011). See also Stolt-Nielsen v. Animalfeeds, analyzed in EEAC Memorandum 10-082 (May 7, 2010).










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The matter proceeded to hearing before an Administrative Law Judge (ALJ), who ruled that the class action waiver did not violate the NLRA because (1) the U.S. Supreme Court has permitted mandatory arbitration of employment claims in unionized and non-unionized settings; (2) there are no Board decisions barring the use of class action waivers; and (3) the Supreme Court has made clear that a party cannot be required to submit to class arbitration unless that party has agreed to do so. The ALJ did find, however, that the agreement could lead employees “reasonably to believe that they cannot file charges with the NLRB” in violation of their Section 7 rights. The case then went to the full NLRB, which eventually ruled that the ability to file employment-related claims on a class or collective basis was protected conduct under Section 7, and the arbitration agreement — which prohibited such activity — unlawfully interfered with, restrained and/or coerced employees seeking to assert their NLRA rights.5 D.R. Horton appealed the NLRB’s decision to the Fifth Circuit.6 EEAC’s Brief EEAC’s brief first stresses that the U.S. Supreme Court has held consistently that the FAA requires that private arbitration agreements be enforced consistent with the parties’ wishes and expectations. Therefore, where the parties have agreed to expressly waive the availability of certain procedures, such as class-wide arbitration, the FAA mandates that the agreement be enforced as written. The NLRB’s D.R. Horton decision undermines this well-established legal principle, we argue. Our brief observes further that parties to arbitration agreements often agree to streamlined procedural mechanisms, including agreeing to forgo class or collective arbitration. By doing so, we point out, the parties do not give up any substantive rights; rather, they merely agree to limit the procedures available to them in arbitration. Indeed, we note, neither the FLSA (on which Cuda’s underlying claim was based) nor the NLRA create a non-waivable right to bring class action claims, and several federal courts, including the Fifth Circuit itself, have refused to invalidate limitations on class action procedures on that basis.7 Perhaps most importantly, we argue that the NLRB’s ruling undermines most, if not all, of the practical benefits that inure to employers and employees alike by agreeing to arbitrate workplace disputes. EEAC’s brief points out that for employees, the relative speed of resolving disputes through arbitration can be particularly advantageous, especially for those who will continue their employment well after their claims have been addressed.

5 The Board’s decision is analyzed in EEAC Memorandum 12-006 (January 13, 2012). 6 The Fifth Circuit hears appeals from federal trial courts in Louisiana, Mississippi, and Texas. 7 See Carter v. Countrywide Credit Indus., 362 F.3d 294 (5th Cir. 2004).


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The advantages that both employees and employers gain by arbitration are likely to disappear, our brief argues, if employers are forced to submit to complex, class-based procedures, regardless of whether the parties have expressly agreed to waive such procedures. Looking Ahead Even if the Fifth Circuit ultimately reverses the NLRB’s D.R. Horton ruling, it will be binding on the Board only within that court’s jurisdiction. Given the NLRB’s current makeup, there is every reason to believe the Board will stick to its position in D.R. Horton as cases arise in other jurisdictions. Accordingly, the issue is not likely to be finally resolved unless and until it reaches the Supreme Court. Questions concerning this memorandum should be directed to Rae Vann at 202-629-5624.


12-006 January 13, 2012 To: EEAC Members From: Jeffrey A. Norris President Re: National Labor Relations Board Rules in D.R. Horton That Class Action

Waiver Provisions in Mandatory Arbitration Agreements Are Unlawful The National Labor Relations Board (NLRB), the independent federal agency that enforces the National Labor Relations Act (NLRA), has issued a controversial ruling holding that a mandatory arbitration agreement which contains a clause barring class-based or collective claims violates the NLRA. The NLRB’s January 3, 2012 decision in D.R. Horton, Inc., which is subject to appeal to a federal appeals court, has significant implications for employers — union or non-union — that utilize mandatory arbitration agreements to resolve employee disputes where the agreement contains a class action waiver clause. As such, unless overturned, the ruling is likely to have a negative impact on the use of arbitration as an alternative to court litigation. Important to note, the Board’s ruling in D.R. Horton runs counter to a growing line of cases decided by the U.S. Supreme Court in recent years holding that rules (1) making it harder to enforce arbitration agreements as compared to other types of contracts and/or (2) purporting to impose class arbitration on parties who have not expressly agreed to be bound by such procedures directly conflict with the Federal Arbitration Act (FAA), and therefore are invalid. A copy of the NLRB’s decision in D.R. Horton is available online at http://mynlrb.nlrb.gov/link/document.aspx/09031d458079f1de/e6f3b0759d2b6e3d3c3b8dcde3c4a1262bd8923. Background The 76-year-old National Labor Relations Act (NLRA) guarantees the right of employees (among other things) to engage in protected concerted activity “for the purpose of collective bargaining or other mutual aid or protection.”1 The NLRA also prohibits employers from

1 29 U.S.C. § 157.

http://mynlrb.nlrb.gov/link/document.aspx/09031d458079f1de/e6f3b0759d2b6e3d3c3b8dcde3c4a1262bd8923

http://mynlrb.nlrb.gov/link/document.aspx/09031d458079f1de/e6f3b0759d2b6e3d3c3b8dcde3c4a1262bd8923

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interfering with, restraining, or coercing employees in the exercise of these rights.2 To be considered “concerted,” the activity must involve other employees advocating for a mutual benefit, rather than be directed by a single person for his or her own personal reasons. The NLRA is enforced by the NLRB, which has the authority to issue final administrative determinations in disputes that arise under the NLRA.3 Under the Federal Arbitration Act (FAA), agreements to arbitrate are to be enforced to the same extent, and subject to the same defenses, as any other type of contract. Accordingly, only generally applicable contract defenses — such as fraud, duress, or unconscionability — can be used to invalidate the terms of an arbitration agreement. As mentioned above, the U.S. Supreme Court has issued a series of rulings in recent years interpreting the scope of the FAA and the validity of mandatory arbitration in various contexts, repeatedly adopting a strong pro-arbitration stance. For example, the High Court recently spoke directly on the enforceability of mandatory arbitration agreements containing class action waiver provisions in Stolt-Nielsen v. Animalfeeds, where it held that imposing class arbitration on parties who have not expressly agreed to authorize such procedures is inconsistent with the FAA.4 In another recent case, the Court reinforced that principle in AT&T Mobility v. Concepcion, where the Court invalidated a California state law that imposed heightened enforceability standards, as compared to other types of contracts, on mandatory arbitration agreements containing class action waiver provisions.5 Reaffirming the strong public policy favoring arbitration, the Court said that efforts to impose class arbitration on parties who have not expressly agreed to such procedures undermines the “fundamental attributes” of arbitration, contrary to the FAA.6 The D.R. Horton Case D.R. Horton, a nationwide homebuilder, requires its employees, as a condition of employment, to submit any workplace disputes to arbitration. The arbitration agreement contains a class action waiver provision that bars class-wide or collective claims brought on behalf of a class or group of employees in a single arbitration proceeding.

2 29 U.S.C. § 158(a)(1). 3 See EEAC Memorandum 10-148 (August 6, 2010) for more information on the NLRB and the NLRA’s enforcement procedures. 4 See EEAC Memorandum 10-082 (May 7, 2010). 5 See EEAC Memorandum 11-087 (May 6, 2011). 6 See also EEAC Memorandum 11-110 (June 10, 2011) for a discussion of more pro-arbitration rulings.





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On February 13, 2008, the company received a demand for arbitration on behalf of Michael Cuda and a class of similarly-situated employees alleging violations of the Fair Labor Standards Act (FLSA), the federal law setting minimum wage and overtime requirements. Invoking the class action waiver contained in the arbitration agreement, D.R. Horton informed the complainants that it would not arbitrate their FLSA claims on a class-wide basis. Cuda then filed an unfair labor practice charge with the NLRB, alleging that the arbitration agreement violated the NLRA by restricting class or collective claims. After the Board’s General Counsel issued a formal complaint against D.R. Horton, the case was heard by an NLRB Administrative Law Judge (ALJ), who ruled that the agreement did not violate the Act because (1) the U.S. Supreme Court has permitted mandatory arbitration of employment claims in unionized and non-unionized settings; (2) there are no Board decisions barring the use of class action waivers; and (3) the High Court’s recent decision in Stolt-Nielsen makes clear that a party cannot be required to submit to class arbitration unless that party has agreed to do so.7 The ALJ’s decision then went to the Board, which in June of 2011 invited interested parties to file friend-of-the-court briefs on the issue of whether D.R. Horton, by “maintaining and enforcing” its mandatory arbitration agreement containing a class action waiver, violated the NLRA.8 NLRB: Prohibiting Employees From Arbitrating Their Claims Collectively Violates the NLRA In reversing the ALJ, the NLRB first found that the ability to file employment-related claims on a class or collective basis is protected conduct under the Act, and that the agreement — which prohibits such activity — unlawfully interferes with, restrains and/or coerces employees seeking to assert their NLRA rights. The Board also held — on what it characterized as an issue of first impression — that barring enforcement of arbitration agreements containing class action waivers does not impermissibly conflict with the FAA “or undermine the pro-arbitration policy” on which that law is based, because such an agreement “interferes with substantive statutory rights under the NLRA, and the intent of the FAA was to leave substantive rights undisturbed.”

7 The ALJ did find that the agreement violated a separate provision of the NLRA because it could be read by employees as restricting their right to complain to the NLRB about suspected violations. That aspect of the ruling is not discussed further herein. 8 EEAC joined in an amicus curiae brief with the HR Policy Association, the Society for Human Resource Management (SHRM), the California Employment Law Council, and the Employers Group in urging the Board to adopt the ALJ’s ruling. See EEAC Memorandum 11-149 (August 5, 2011).


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Filing a Collective or Class Action Constitutes Protected Concerted Activity The Board points out that the NLRA’s right to engage in concerted activity for the “mutual aid and protection” of employees long has been interpreted to include employee efforts to improve working conditions through collective or class action litigation. Indeed, said the Board, when Congress enacted the NLRA in 1935, it sought to address the “inequality of bargaining power” between unorganized workers and employers “organized in the corporate form” by establishing a right to association. The ability to pursue claims on behalf of a class of employees is just as much a concerted action as would be a worker strike for fair wages and overtime, the NLRB observed. In addition, according to the decision, concerted activity for the mutual aid or protection of employees likely is most effectively asserted through collective action, where unnamed class members are assured greater protection against retaliation than a named plaintiff in an individual lawsuit. In a footnote, the Board observes that the risk of unlawful retaliation “is virtually unique to employment litigation compared, for example, to securities or consumer fraud litigation.” It goes on to say later in the opinion that where employees are required to sign an agreement containing a class action waiver as a condition of employment, “there is an implicit threat” that if they fail to do so, they will not be hired or will be fired. Where the employer is sued by a class, the named plaintiffs protect the unnamed class members from that risk.

Restraining the Exercise of Protected Concerted Activity Violates the Act The ruling continues that because the right to pursue workplace grievances collectively is protected concerted activity under the Act, and arbitration agreements containing class action waivers infringe on that right, they unlawfully “interfere with, restrain, or coerce employees” in the exercise of their NLRA rights. Relying on NLRB cases decided over six decades ago, the Board found that outlawing these types of agreements “lies at the core of the prohibitions” contained in the Act. The Board rejected D.R. Horton’s contention that the agreement in question does not violate the NLRA because it in no way limits or restricts the right of employees to bring their complaints to the union, to discuss issues with one another or even “pool resources” to hire an attorney, pointing out that the mere fact some forms of concerted activity are allowed provides no defense to barring other forms of equally protected concerted conduct.

Barring Class Action Waivers Under the NLRA Does Not Conflict With the FAA With respect to the key issue of whether barring class action waivers in the NLRA context impermissibly conflicts with the FAA, the Board found no conflict. It concluded that upholding the right of employees to engage in concerted activity on a collective basis under the NLRA does not interfere with the FAA’s policy “permitting” enforcement of private arbitration

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agreements. Even assuming there was a conflict, the NLRB goes on to say, its interpretation nevertheless “represents an appropriate accommodation of the policies underlying the two statutes.” The FAA, the Board observed, was enacted in 1935 to reverse judicial bias against private arbitration and to prevent courts from treating agreements to arbitrate less favorably than other types of contracts. But while the FAA “permits the enforcement of private arbitration agreements,” those agreements are still subject to the same defenses as other contracts. Applying the NLRA to the arbitration agreement at issue in this case “is to treat it no worse than any other private contract that conflicts with Federal Labor Law,” and thus does not subject such agreements to requirements that are not applied to other types of agreements. For instance, the Board explains, if D.R. Horton required its employees to agree not to sue the employer in court on a class or collective basis, such a requirement would violate the NLRA, even absent an arbitration clause. The issue is not whether employees subject to the arbitration agreement can vindicate their statutory rights under the FLSA as required by the FAA, the Board said. Rather, the question is whether the bar on class or collective actions violates substantive rights under the NLRA. Because the arbitration agreement interferes with substantive NLRA rights, and “the intent of the FAA was to leave substantive rights undisturbed,” there is no conflict in the Board’s conclusion that the agreement is unenforceable. The Board downplayed the relevance of the Supreme Court’s decision in Concepcion to this case, reasoning that the issues in that case were far more significant than they are here: whereas tens of thousands of potential claimants might be covered by the arbitration agreements California attempted to outlaw there, in this case, “only agreements between employers and their employees are at stake.” According to the Board, “the average number of employees employed by a single employer is 20” and employment-related class action litigation “involves only a specific subset of an employer’s employees.” Therefore, in the Board’s view, class-based employment arbitration is “far less cumbersome and more akin to an individual arbitration proceeding” in terms of cost, risk, speed and the like than the consumer claims at issue in Concepcion. As to the strong federal policy favoring arbitration, the Board asserts that its holding is not anti-arbitration at all, and in any event implicates only a very small percentage of cases. It points out that “employee” as defined by the NLRA excludes certain categories of workers, such as supervisors, independent contractors and domestic service employees, so arbitration agreements covering them would not implicate NLRA rights. In addition, according to the NLRB, an agreement that requires employees to arbitrate their claims on an individual basis but permits them to pursue class or collective actions in court, for instance, would not implicate the NLRA.

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Significance The NLRB’s ruling in D.R. Horton impacts every employer subject to the NLRA, whether presently unionized or not. Non-union employees seeking to establish a union are protected by the NLRA no less than those that already belong to a union. Thus, the Board’s decision affects any arbitration agreement by an NLRA-covered employer that restricts class action procedures. Because a discrimination-free workplace ostensibly is a “term or condition of employment” that employees have a right to challenge collectively under the NLRA, arguably any arbitration agreement that contains a class action waiver could be challenged under the D.R. Horton rule, even if it only applies to EEO claims. Indeed, keep in mind that the underlying claim in this case involved an FLSA violation. To the extent that the Board’s D.R. Horton decision is inconsistent with the longstanding federal policy expressed in the FAA favoring arbitration of private disputes — and reaffirmed repeatedly in recent years by the High Court — that question will have to be resolved ultimately in the courts. As previously mentioned, the Board’s ruling is appealable to a federal court of appeals, and EEAC will continue to track and report on further developments. Questions concerning this memorandum should be directed to Rae Vann at 202-629-5650.


11-149 August 5, 2011 To: EEAC Members From: Jeffrey A. Norris President Re: EEAC Joins With Other Employer Groups in Urging NLRB To Rule That

Mandatory Arbitration Agreements Containing Class Action Waiver Provisions Do Not Violate the National Labor Relations Act

EEAC, joining the HR Policy Association, the Society for Human Resource Management (SHRM), the California Employment Law Council, and the Employers Group, has filed a “friend-of-the-court” brief with the National Labor Relations Board (NLRB) in a case with potentially significant implications for companies that have mandatory arbitration agreements containing class action waiver provisions. In D.R. Horton, Inc., the NLRB filed an unfair labor practices complaint accusing the company of violating the NLRA by (1) requiring employees to agree to submit their disputes to binding arbitration on an individual, not class-wide, basis; and (2) writing the arbitration agreement in such a manner as to lead workers to “reasonably believe” they were barred from filing unfair labor practice charges with the NLRB. The NLRB has now asked for briefs from interested parties on the issue of whether mandatory arbitration agreements containing class action waiver provisions — including those covering only non-NLRA claims arising in a non-union setting — impermissibly interfere with employees’ rights under the NLRA. Our joint brief argues that the NLRB cannot condition enforcement of a valid mandatory arbitration agreement on the availability of class arbitration procedures, pointing out that the Federal Arbitration Act (FAA) — as interpreted by the U.S. Supreme Court — requires enforcement of such agreements in accordance with their terms. We contend that the NLRB’s attempt to circumvent the FAA in such a manner would undercut the strong and longstanding federal policy favoring private arbitration. A copy of our brief is available online at http://www.eeac.org/web/amicus/index.asp.

http://www.eeac.org/web/amicus/index.asp

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Background The National Labor Relations Act (NLRA), which is enforced by the NLRB, is the federal law that establishes the rights of employees to engage (or refrain from engaging) in union-organizing and collective-bargaining activities with their employers.1 Under the Federal Arbitration Act, agreements to arbitrate are to be enforced to the same extent, and subject to the same defenses, as any other type of contract. Only generally applicable contract defenses — such as fraud, duress, or unconscionability — can be used to invalidate an arbitration agreement. The U.S. Supreme Court has issued a series of rulings over the years interpreting the scope of the FAA and the validity of mandatory arbitration in various contexts, repeatedly adopting a decidedly pro-arbitration stance.2 In fact, the High Court recently spoke directly to the enforceability of mandatory arbitration agreements containing class action waiver provisions. In Stolt-Nielsen v. Animalfeeds,3 the Court held that imposing class arbitration on parties who have not expressly agreed to authorize such procedures is inconsistent with the FAA. This principle was reinforced in the Court’s subsequent decision in AT&T Mobility v. Concepcion,4 where it invalidated a California state law that imposed heightened enforceability standards, as compared to other types of contracts, on mandatory arbitration agreements containing class action waiver provisions. Reaffirming the strong public policy favoring arbitration, the High Court said in Concepcion that efforts to impose class arbitration on parties who have not expressly agreed to such procedures undermines the “fundamental attributes” of arbitration contrary to the FAA. The D.R. Horton Case D.R. Horton requires that, as a condition of employment, employees agree to submit their workplace disputes to arbitration. The arbitration agreement contains a class action waiver provision that bars the pursuit of class-wide or collective claims on behalf of a class or group of employees in a single arbitration proceeding. On February 13, 2008, D.R. Horton received a demand for arbitration on behalf of Michael Cuda and a class of similarly-situated employees alleging violations of the Fair Labor Standards Act (FLSA). Invoking the class action waiver contained in the arbitration agreement, D.R. Horton refused to arbitrate the FLSA claims on a class-wide basis.

1 For more information on the NLRA and the Board, please see EEAC Memorandum 10-148 (August 6, 2010). 2 For a detailed discussion of these cases, please refer to EEAC Memorandum 11-110 (June 10, 2011). 3 See EEAC Memorandum 10-082 (May 7, 2010). 4 See EEAC Memorandum 11-087 (May 6, 2011).





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Cuda filed an unfair labor practice (ULP) charge with the NLRB, which in turn issued a complaint alleging that the class action waiver contained in the arbitration agreement violated the NLRA. After a hearing, an NLRB Administrative Law Judge (ALJ) ruled that the class action waiver did not violate the Act because (1) the Supreme Court has permitted mandatory arbitration of employment claims in unionized and non-unionized settings; (2) there are no Board decisions barring the use of class action waivers; and (3) the Supreme Court’s recent decision in Stolt-Nielsen makes clear that a party cannot be required to submit to class arbitration unless that party has agreed to do so. The ALJ did find, however, that the agreement violated the Act because it could be read by employees as restricting their right to complain to the NLRB. On June 16, 2011, the Board invited interested parties to weigh in on whether D.R. Horton, by “maintaining and enforcing” its mandatory arbitration agreement containing a class action waiver, violated the NLRA. It did not invite comment regarding whether or not the agreement, as the ALJ concluded, could reasonably be read by employees as prohibiting them from filing charges with the NLRB. Our Joint Brief Our joint brief points out that the U.S. Supreme Court has held that the FAA requires that mandatory arbitration agreements be enforced according to their terms, even those that preclude the availability of class-wide arbitration procedures. We note that the High Court repeatedly has affirmed the strong public policy favoring arbitration generally, and as recently as this year in Concepcion made clear that parties to a valid arbitration agreement cannot be forced to arbitrate claims on a class-wide or collective basis without expressly agreeing to do so. The NLRB, we contend, is bound by that interpretation and cannot be permitted to circumvent the FAA. We argue next that the mere existence of a class action waiver in an arbitration agreement does not constitute an unfair labor practice, observing that the Supreme Court long held that requiring employees to submit to arbitration does not deprive them of their substantive statutory rights. Here we note that even the NLRB’s own General Counsel, in a June 16, 2010 memorandum (“GCM 10-06”) issued to the Board’s staff, said that “no issue cognizable under the NLRA is presented” by an employer’s requirement that its employees submit their non-NLRA claims to arbitration on an individual, rather than class-wide, basis. To the extent that GCM 10-06 has not been rescinded and remains in effect, we contend, the Board is bound by that interpretation. Furthermore, at least one federal district court has held that class action waivers contained in mandatory arbitration agreements do not violate the NLRA.5

5 Slawienski v. Nephron Pharma. Corp., No. 1:10-CV-0460, 2010 U.S. Dist. LEXIS 130365 (N.D. Ga. Dec. 9, 2010).

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Finally, our brief asserts that banning class action waivers not only would significantly increase the cost of arbitration but also would defeat most, if not all, of the practical benefits of arbitration over litigation. Taking the decision as to whether class arbitration is permitted out of the hands of the parties and instead allowing the Board to dictate the terms of such private agreements, we argue, would be contrary to the strong federal policy favoring arbitration and a disservice to the interests of employers and employees alike. Questions concerning this memorandum should be directed to Rae Vann at 202-629-5624.


15-011 January 16, 2015 To: EEAC Members From: Joe Lakis President Re: National Labor Relations Board Wrapped Up 2014 With Flurry of

Controversial Actions EEAC reported recently on a controversial decision (Purple Communications) issued by the National Labor Relations Board (NLRB or Board) in which it ruled that an employer who permits employees to access its email and other electronic communications systems for work-related reasons must also allow such access for non-work purposes.1 The NLRB is the quasi-judicial body responsible for interpreting and enforcing the National Labor Relations Act (NLRA). Purple Communications, however, was not the only controversial action taken by the Board before it wrapped up its 2014 calendar year. In December alone, the Board finalized new rules designed to significantly speed up the union election process, and issued decisions further expanding the reach of the NLRA far beyond its traditional limits. This EEAC memorandum provides a high level summary of some of the most important (and controversial) December developments. Background The primary duties of the NLRB are to conduct union elections, certify bargaining representatives, and adjudicate allegations that an employer or union has committed unfair labor practices. While often thought of as a statute that addresses issues related strictly to labor unions, the NLRA’s core protections, governing the right of employees to act collectively to improve working conditions, apply to most U.S. workers regardless of any union presence. The NLRB is comprised of five Members, appointed by the President and confirmed by the U.S. Senate. By tradition, three Members of the Board are of the same political party as the President. All of the current Board members, three Democrats and two Republicans, were

1 See EEAC Memorandum 15-001 (January 5, 2015).


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appointed by President Obama. Members serve staggered five-year terms, meaning that one Member’s term expires each year. It is common practice for the NLRB to issue a large number of decisions immediately before the end of a Member’s term, and Democratic Member Nancy Schiffer’s term expired on December 16, 2014.2 True to form, December was a busy month at the Board, as evidenced by the 34 published decisions issued on Ms. Schiffer’s last two days as a Board Member. While many of these decisions involve relatively routine cases, a number were controversial. “Quickie” Election Rules To Significantly Speed Up Union Representation Elections The NLRB develops policy almost exclusively by adjudicating individual cases that have first been heard by an Administrative Law Judge (in the case of unfair labor practice cases) or one of the NLRB’s Regional Directors (in the case of election proceedings). In a break from tradition, however, during the Obama Administration the Board has attempted to utilize formal rulemaking on two priority issues. The first attempt at rulemaking would have required virtually every private sector workplace to post a notice of labor rights. That rulemaking was struck down by two separate federal appeals courts, which ruled that the NLRB exceeded the scope of its authority in issuing the rule.3 The second attempt at rulemaking began with a 2011 proposal to revise dozens of rules governing the procedures under which the Board conducts union elections. The Obama Board has long sought to reduce the time for union elections under a belief that the current system provides too many inefficiencies and opportunity for delay, even though the median time for an election is only 38 days. Not surprisingly, the changes clearly are intended to assist union organizing drives. Although those rules were finalized in late 2011, a federal court ruled that the revisions were invalid because the Board did not follow proper rulemaking procedures. The Board re-proposed the rules in early 2014,4 and published a final rule on December 15, 2014.5 Among the many controversial aspects of the new rule are:

• A requirement to hold a pre-election hearing within 8 days of a union asking for an election;

• The employer must submit a statement of position before the hearing outlining any

objections to the election; arguments not included may be considered waived;

2 Former Member Schiffer’s replacement has already been confirmed and sworn in. 3 See EEAC Memoranda 13-097 (May 17, 2013), 13-123 (June 21, 2013), and 14-014 (January 17, 2014). 4 See EEAC Memorandum 14-040 (February 21, 2014). 5 79 Fed. Reg. 74,307 (December 15, 2014).





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• Eliminating the right to a pre-election appeal; • Providing the union with employee phone numbers and email addresses in addition to

home addresses early in the campaign period; and

• Deferring many contested issues until after the election is held. The new election rules are scheduled to go into effect on April 14, 2015, but have already been challenged in two separate lawsuits. On January 5, 2015, a coalition of business groups filed a challenge in the federal district court for the District of Columbia. Meanwhile, on January 13, 2015, the Associated Builders and Contractors along with two Texas-based associations filed suit in the federal district court for the Western District of Texas.6 Decisions Focus on Unlawful Employer Policies and Expanded Board Jurisdiction The NLRB issued 40 published decisions in December, 34 of which were issued on the last two days of Member Schiffer’s term. At least six of those decisions are controversial. Of greatest concern to EEAC members are four decisions that demonstrate the significantly increased scrutiny that is being given to employer policies that the Board believes violate the NLRA.

Employee Right To Use Employer Provided E-mail In a case that we have already reported on, the Board held in Purple Communications that employees have a right to use employer-provided email systems for personal communications, including union organizing, subject to some narrow exceptions and limitations.7

Wage Discussions Inherently Protected The NLRB has long held that an employer violates the NLRA by instructing employees not to share their wage information with each other. In Alternative Energy Applications, Inc., 361 NLRB No. 139 (Dec. 16, 2014), the Board found that an employer had unlawfully given an employee such an instruction. The decision focused on the employer’s alleged retaliatory discharge of an employee for sharing wage information. Typically in a discharge case, an employer must be found to have terminated an employee for engaging in activity that is both protected and concerted. Dissenting 6 Chamber of Commerce, et al. v. NLRB, No. 1:15-cv-00009 (D.D.C.) (filed January 5, 2015); Associated Builders and Contractors of Texas, Inc., et al. v. NLRB, No. 1:15-cv-00026 (W.D. Texas) (filed January 13, 2015). 7 See EEAC Memorandum 15-001.


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Member Miscimarra noted that while there was evidence that the employee may have talked about his wages, and engaged in protected activity, there was no evidence that he did so to initiate or prepare for group action or otherwise act concertedly. The Board majority, however, ruled that such an analysis is unnecessary because wage discussions are “inherently concerted.”

Employer Policies Cannot Bar Disrespectful Conduct In a case scrutinizing several employer policies, Lytton Rancheria of California,8 the Board split over whether a policy barring disrespectful conduct violated the NLRA. The employer’s policy stated that “insubordination or other disrespectful conduct (including failure to cooperate fully with Security, supervisors, and managers)” may result in disciplinary action, up to and including separation from employment. While the decision indicates that the Board would have found the employer policy lawful if it merely prohibited insubordination, the majority found that the prohibition of disrespectful conduct would be reasonably construed by employees as prohibiting activity protected by the NLRA. For example, the decision reasoned that collectively complaining about a supervisor’s arbitrary conduct or jointly challenging an unlawful pay scheme would reasonably be viewed as disrespectful and thus in violation of the policy, even though such actions are protected by the NLRA.

Employers Must Exercise Caution When Reminding Employees About Harassment Policies in Proximity to Union Organizing Campaign

While the NLRB has been more closely scrutinizing all manner of employer policies in recent years, it is especially skeptical of employer policies adopted or expanded upon during, or in close proximity to, a union campaign. In 2010, the NLRB issued a controversial decision finding that an employer violated the NLRA when it posted a notice reminding employees about its anti-harassment policies. The Board stated that even though the employer had received complaints about employees harassing co-workers to sign union authorization cards, the employer could not post a notice reminding employees about its zero tolerance anti-harassment policy unless it also noted that employees have the right to engage in persistent union solicitation even when it annoys or disturbs other employees.9 Now, in Care One at Madison Avenue, LLC,10 the Board considered a memorandum that an employer posted after a union election that the union lost by one vote. The memorandum was entitled “Teamwork and Dignity and Respect” and was accompanied by a copy of the employer’s preexisting Workplace Violence Prevention Policy. According to the memorandum, the employer had received reports of employees threatening co-workers, presumably related to

8 361 NLRB No. 148 (December 16, 2014). 9 Boulder City Hospital, Inc., 355 NLRB 1247 (2010). 10 361 NLRB No. 159 (December 16, 2014).

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positions taken during the union election. The memorandum reiterated the employer’s position that threats, intimidation, and harassment will not be tolerated and should be reported to management. According to the Board, the memorandum was developed in response to union activity and employees would reasonably construe it to prohibit such activity. In addition, the Board emphasized that it does not take employer claims of violence at face value when protected rights are implicated. Because the employer did not introduce any evidence that the threats referred to in the memorandum actually occurred or that it investigated such threats, the Board concluded the employer lacked a legitimate basis for issuing the memorandum.

NLRB Will Review More Workplace Disputes That Had Been Subject to Arbitration A common feature of collective bargaining agreements is a provision to arbitrate various types of workplace disputes, such as employee discipline and discharge. In this context, arbitration is a matter of interpreting the provisions of the collective bargaining agreement. While the NLRA authorizes the NLRB to pursue any unfair labor practice charge, the Board has established standards by which it will defer to arbitral decisions. As a threshold matter, the arbitral proceedings must appear to have been fair and regular, and all parties must have agreed to be bound by the agreement. Since 1984, the Board’s position has been that deferral is appropriate where the contractual issue is “factually parallel” to the unfair labor practice issue, the arbitrator was presented with facts relevant to resolving the issue, and the arbitrator’s decision is not “clearly repugnant” to the NLRA. In addition, under this standard, the party seeking to have the Board review a matter settled through arbitration had the burden of showing the standard had not been met. Last month, however, in Babcock & Wilcox Construction Co., Inc.,11 the NLRB adopted a new standard making it easier for the Board to review disputes that had been subject to arbitration. First, the Board has changed the burden of proof, so that the burden is on the party seeking deferral to the arbitral award. In such a case, the Board will defer if it is shown that the arbitrator was explicitly authorized to decide the unfair labor practice issue, the arbitrator was presented with and considered the statutory issue (or was prevented from doing so by the party opposing deferral), and Board law reasonably permits the award. In addition, the Board has also changed its standards for pre-arbitral deferral, meaning that the Board will not defer to the arbitral process unless the arbitrator was explicitly authorized to decide the unfair labor practice charge.

11 361 NLRB No. 132 (December 15, 2014).

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The practical significance of this change is that employers who have successfully resolved employment disputes through an arbitral process established in a collective bargaining agreement can expect to have to re-litigate a greater portion of cases before the NLRB. NLRB’s General Counsel Pursues Complaint Alleging that McDonald’s Corporate Office is Joint Employer with Franchisees Generally speaking, the term “joint employer” refers to two employers, unrelated to one another, that exercise some level of control over a single employee or groups of employees such that both entities are considered the employer, thereby triggering joint obligations and responsibilities under federal employment law. Earlier this year, the Board announced that it was considering adopting a new standard for determining whether two companies are joint employers and invited interested parties to submit briefs.12 Meanwhile, not waiting for the Board to decide whether it would maintain its current standard or make changes, the Board’s General Counsel and former union official Richard Griffin (D) announced on July 29, 2014 that he had authorized his staff to issue complaints in 43 unfair labor practice cases alleging that McDonald’s USA, LLC, committed unfair labor practices with respect to certain employees who engaged in protest activity. The announcement was significant because the General Counsel indicated that, absent settlement, he would pursue these cases against the particular employer-franchisee and McDonald’s USA, LLC as a joint employer. On December 19, Mr. Griffin announced that he had filed 13 complaints involving 78 charges against McDonald’s USA, LLC, McDonald’s USA franchisees, and/or McDonald’s franchisees and their franchisor, McDonald’s USA, LLC as joint employers in 13 NLRB regional offices. The Board announced that trials are set to begin in late March 2015. The litigation marks a significant departure from past precedent that had typically found that franchisors do not exercise the requisite degree of control over the employees of franchisees sufficient to meet a joint employer standard. The move is consistent, however, with a growing trend by some policymakers to seek to hold employers responsible for the compliance responsibilities with those companies with which they do business.13 Looking Ahead There is no reason to believe that the NLRB will not continue its expansionist posture in 2015, especially since the majority of the Members as well as the General Counsel are employee rights advocates and generally viewed to be strongly pro-union.

12 Browning-Ferris Industries of California, Case 32-RC-109684 (May 12, 2014). 13 See, for example, EEAC Memoranda 14-226 (November 7, 2014), 14-159 (August 8, 2014), and 10-163 (September 2, 2010).





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The current composition of the NLRB and the expiration of each Member’s term are as follows: • Harry Johnson (R), August 27, 2015 • Kent Hirozawa (D), August 27, 2016 • Phil Miscimarra (R), December 16, 2017 • Mark Pearce (D) (Chair), August 27, 2018 • Lauren McFerren (D), December 16, 2019 While Member Johnson’s term expires later this year, this will not affect the ability of the Democratic majority to continue to issue decisions throughout the remainder of the year and well into 2016. In addition, the Board has largely cleared out the backlog of cases that had to be re-decided after the Supreme Court ruled that the Board operated for seven months with Members who were not properly appointed.14 Consequently, Board Members will have more time to focus on new cases and their own priorities. Questions concerning this memorandum should be directed to Mike Eastman at 202-629-5650.

14 See EEAC Memorandum 14-134 (July 3, 2014).



14-053 March 14, 2014 To: EEAC Members From: Joe Lakis President Re: NLRB’s New General Counsel Outlines His Enforcement Priorities,

Including Right of Employee To Have Co-Worker Present During Investigatory Interview

Late last year, Richard F. Griffin was sworn in for a four-year term as the new General Counsel of the National Labor Relations Board (NLRB, or Board). The five-member NLRB enforces the National Labor Relations Act (NLRA), the 80-year federal law that governs labor-management relations. The General Counsel’s unreviewable prosecutorial discretion to bring enforcement actions on behalf of the Board gives the position an influential role in developing the agency’s policy positions. Mr. Griffin, who previously served as General Counsel of the International Union of Operating Engineers (IUOE) and on the board of directors for the AFL-CIO Lawyers Coordinating Committee, recently issued a memorandum to the NLRB’s regional offices outlining his enforcement priorities in the coming months. Because several of the issues flagged will impact all employers, union and non-union alike, we thought this development was worth bringing to your attention. For example, among the issues that Mr. Griffin indicates he is particularly interested in are: cases that involve the right of employees to have a co-worker present during certain investigatory interviews; personal use by employees of employer-provided e-mail; at-will employment policies; and mandatory arbitration agreements that include class action waivers. A copy of Mr. Griffin’s February 25 “Advice Memorandum” is available on the NLRB’s website at http://mynlrb.nlrb.gov/link/document.aspx/09031d45815e44c6.

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Background The NLRA delegates two primary functions to the Board: (1) the processing of union election petitions;1 and (2) the adjudication of so-called unfair labor practice charges.2 The NLRB’s General Counsel (GC) has unreviewable discretion to determine which charges should be prosecuted and the litigation strategy that will be used in prosecuting the case. Because the Board traditionally has developed its policy decisions through the adjudication of particular disputes rather than through rulemaking, this gives the General Counsel an especially important role in setting Board policy. Much of the General Counsel’s litigation authority is delegated to the NLRB’s 26 regional offices. When a region has a question about whether or how to pursue an alleged violation of the law, it can formally request an opinion from the General Counsel’s Division of Advice (Advice). In addition, the General Counsel makes clear that certain types of cases should always be submitted to Advice before the region acts. This message typically is communicated by way of periodic memos issued by the General Counsel to the regions that set forth the types of cases that should be submitted. Among the “standing” issues always appropriate for submission:

• Cases involving policy priorities of the General Counsel; • Cases where there is no clear Board precedent; • Cases requiring development of a legal strategy in light of adverse decisions in the

federal courts or new Board precedent; and • Cases presenting difficult legal questions.

With respect to the first bullet, it is common practice for a new General Counsel to issue a memorandum to the regions outlining his or her expectations for cases that must be submitted to Advice. This was the purpose of Mr. Griffin’s February 25 communication. GC’s Memo Flags Several Areas of Interest to All Employers Mr. Griffin’s Advice Memorandum includes more than two dozen types of cases that he expects the regions to submit for guidance, many of which are perennial categories involving nuanced matters of union organizing or collective bargaining negotiations. There are several categories of cases, however, that should be of interest to all EEAC members because of the impact they may have on compliance for a broad spectrum of employers.

1 See, for example, EEAC Memorandum 14-040 (February 21, 2014). 2 For a detailed primer on the NLRA, please see EEAC Memorandum 10-148 (August 6, 2010).



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Right To Be Accompanied by a Co-worker in Certain Investigatory Interviews One key category of cases flagged concerns the application of so-called “Weingarten” rights in non-union workplaces. Weingarten rights, named for the 1975 Supreme Court decision in NLRB v. J. Weingarten, Inc.,3 refer to the right of an employee to have a representative present in an investigatory interview conducted by an employer that could lead to discipline of the employee. The NLRB has long held that Weingarten rights apply to unionized workers, in effect allowing union members to have a union representative present in investigatory interviews. In contrast, the Board has vacillated on whether such rights apply in non-union settings, the Board’s position often depending on which political party controls the five-member majority. Many Board watchers had expected that the precedent currently in force, i.e., that Weingarten rights do not apply in non-union settings,4 would be a prime topic for reversal during the Obama Administration. By flagging this as a priority issue in his Advice Memorandum, Mr. Griffin now suggests that the time may have come. Among other things, application of Weingarten rights in non-union settings raises several concerns for employers, especially if the co-worker representative was involved in the matter under investigation by the employer.

Use of Employer E-Mail Systems for Non-Work Purposes Another priority of General Counsel Griffin is cases that involve whether an employer can restrict the personal use of company-provided e-mail systems. The NLRA protects the right of union and non-union workers alike to engage in protected concerted activity, and employer rules and policies that conflict with that right or that are applied in a discriminatory manner may be found unlawful. Although there is nothing that forbids an employer from having a rule that prohibits personal use of a company-provided e-mail account, in practice such a rule can be impractical to implement. For example, an employer who disciplined an employee for sending union-related e-mail might risk a charge that it unlawfully discriminated based on NLRA-protected activity. To provide some guidance to employers, the Board in 2007 set a standard that allows employers to permit some personal use of e-mail while crafting rules that prohibit other personal use, such as for commercial purposes or certain types of solicitations.5 Again, by flagging this topic, Mr. Griffin has raised the possibility of policy changes to this precedent that could be of concern to employers. For example, the General Counsel could seek an interpretation that a prohibition on all personal use of e-mail is presumptively unlawful.

3 420 U.S. 251 (1975). 4 See, for example, EEAC Memorandum 04-143 (July 1, 2004). 5 See Register-Guard, 351 NLRB 1110 (2007).


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Alternatively, the General Counsel might seek a rule requiring an employer to document the legitimate business reasons for any lines that the employer draws between permitted and prohibited personal use. Such changes in policy would complicate the ability of employers to craft and enforce company policy regarding use of company-provided e-mail systems.

At-Will Employment Policies The General Counsel’s Advice Memorandum also asks the NLRB regions to refer cases involving allegations that an employer maintains an unlawful employment-at-will policy. This is a prime example of where the NLRB in recent years has been focusing on employer rules and policies that it claims are overbroad, and therefore allegedly unlawfully interfere with the rights of employees to engage in protected concerted activity. In 2012, Advice issued two memoranda addressing whether employment-at-will policies were overbroad. Under the interpretation expressed in these memoranda, employment-at-will policies by themselves are not overbroad. Language in a policy stating that company officials do not have the authority to modify the employment-at-will policy also may be lawful. On the other hand, there is some Board precedent suggesting that asking employees to agree with a company employment-at-will policy might be unlawfully overbroad because it could be viewed as restricting the ability of employees to try to change the policy. Inclusion of the employment-at-will category indicates that the General Counsel is still taking a hard look at an issue that many employers consider to be outside the Board’s enforcement scope.

Mandatory Arbitration Agreements In an issue that we have discussed in previous EEAC memos, Mr. Griffin also directs the regions that certain cases involving mandatory arbitration agreements that contain a class action waiver prohibition be forwarded to Advice. In 2012, in D.R. Horton, the NLRB ruled that arbitration agreements containing class action waivers infringe on the NLRA-protected right to collectively pursue workplace grievances.6 This position is in direct tension with recent federal court interpretations of the Federal Arbitration Act that have affirmed the enforceability of mandatory arbitration agreements containing class action waivers.7

6 See EEAC Memorandum 12-006 (January 13, 2012). 7 See EEAC Memoranda 10-082 (May 7, 2010) and 11-087 (May 6, 2011).




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Although the NLRB’s D.R. Horton decision was recently reversed by the Fifth Circuit Court of Appeals,8 under the Board’s “non-acquiescence policy,” the agency appears to have no intention of changing its position unless and until ordered to do so by the U.S. Supreme Court.9 Looking Ahead EEAC will continue to monitor the issues we have flagged in this memorandum as they play out over the next several months, as well as identify any other enforcement focus by the NLRB on employment policies with broad impact, and will alert you to new developments of interest as they occur. Questions concerning this memorandum should be directed to Mike Eastman at 202-629-5650.

8 See EEAC Memorandum 13-239 (December 6, 2013). 9 See Network Capital Funding Corp. and Erik Papke, NLRB Case 21-CA-107219, March 5, 2014.



14-165 August 15, 2014 To: EEAC Members From: Joe Lakis President Re: NLRB Strikes Down Employer’s Data Protection Policy, Finds It Interferes

With Workers’ Labor Law Rights Just when we think the National Labor Relations Board (NLRB, or Board) must have reached its limit on issuing controversial rulings that are rewriting U.S. labor law at the expense of common sense, the agency once again has proven us wrong. In the latest example, the Board has ruled in a split decision that an employer’s data protection policy advising employees to maintain the confidentiality of private data collected from customers and employees violates the National Labor Relations Act (NLRA). The decision by the NLRB in Fresh & Easy Neighborhood Market, Nos. 31-CA-077074 and 31-CA-080734 (NLRB July 31, 2014), reasons that employees would construe the data protection rule, contained in a company ethics pamphlet, as forbidding them from discussing wages and working conditions. At minimum, the Fresh and Easy decision is potentially problematic for the many companies that have adopted data protection policies in an attempt to guard against disclosure of confidential data. As the dissenting Board member points out, the decision comes very close to being a mandate that any data protection policy contain an explicit exception for NLRA-protected speech or risk violating the law. The NLRB’s decision in Fresh and Easy is available online at http://mynlrb.nlrb.gov/link/document.aspx/09031d4581810441. Background The NLRB is the quasi-judicial federal agency that enforces the National Labor Relations Act (NLRA). The Board is made up of five members appointed by the President and confirmed by the U.S. Senate. Among other things, the Board conducts enforcement proceedings on charges of alleged violations of the NLRA, known as “unfair labor practices.”

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The core of the NLRA is Section 7, which guarantees the right of employees to form or join a union, bargain collectively through designated representatives, and engage in other “protected concerted activity.” Section 8(a)(1) of the NLRA in turn prohibits employers from interfering with, restraining, or coercing employees in the exercise of their Section 7 rights. These provisions of the NLRA apply to both unionized and nonunionized workplaces.1 Over the years, cases decided by the NLRB and the courts have reasoned that to be “concerted,” the activity engaged in must include other employees or be authorized by other employees, and typically does not occur where an employee has acted solely on his or her own. To be “protected,” the conduct engaged in must be either for the purpose of collective bargaining or for other “mutual aid or protection,” which has been defined broadly to include matters of common concern. Thus, the “protected concerted activity” covered by the NLRA includes the right of employees to discuss among themselves such topics as working conditions, terms and conditions of employment, pay, hours, and benefits.

Data Breach Risks Have Prompted Employers To Adopt or Strengthen Data Protection Policies

Potential data breaches — the theft or inadvertent disclosure of personal employee or customer data or other sensitive corporate information — are a matter of significant and growing concern for companies nationwide. Hardly a day goes by that there is not a new report of a significant data breach, either intentionally, by a hacker, or unintentionally due to someone’s carelessness. These data breach events have enormous potential consequences including identity theft, loss of employee or consumer confidence, and costly cleanup expenses.2 Such risks have led prudent employers to establish and install various mechanisms to try to prevent data breaches, including the adoption of strong policies to inform employees of their own responsibilities to protect confidential data. In some cases, companies are required to have data protection policies, for example in order to transfer data from the European Union (EU) in compliance with the EU Data Protection Directive,3 or to comply with state law requirements.4 The Fresh & Easy Neighborhood Market Case Fresh & Easy is a grocery store chain located in California. The company has a 20-page “Code of Business Conduct” covering primarily ethical matters such as “Personal and business integrity,” which includes the topics “Fraud, bribery and corruption,” “Conflicts of interest,”

1 See EEAC Memorandum 10-148 (August 6, 2010) for a detailed primer on the NLRA and its requirements. 2 See EEAC Memorandum 10-185 (October 1, 2010) for more information on the causes and costs of data breaches. 3 See EEAC Memorandum 13-099 (May 17, 2013). 4 The National Conference of State Legislatures maintains a website that provides more information on current and proposed data security laws at http://www.ncsl.org/research/telecommunications-and-information-technology/security-breach-notification-laws.aspx.




http://www.ncsl.org/research/telecommunications-and-information-technology/security-breach-notification-laws.aspx

http://www.ncsl.org/research/telecommunications-and-information-technology/security-breach-notification-laws.aspx

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“Insider dealing and market abuse,” “Gifts and improper payments,” and “Political activity.” The Code of Conduct also includes sections on “Intellectual Property,” “Responsible Use of Company IT,” “Confidentiality and Data Protection,” and “Accurate Accounting and Money Laundering.” The Code’s section on “Confidentiality and Data Protection” is designed to ensure that the personal data the company holds on consumers and employees is protected and handled responsibly. The section lists “Do’s” and “Don’ts” that generally reflect well-accepted principles of data protection,5 stating:

DO • Make sure any customer or staff information you collect, is relevant, accurate and, where

necessary, kept up to date. Keep it for no longer than necessary. • Keep customer and employee information secure. Information must be used fairly,

lawfully and only for the purpose for which it was obtained. • Ensure that data is appropriately and securely stored and disposed of. Be aware of the

risk of discussing confidential information in public places.

DON’T • Release information, without making sure that the person you are providing it to is

rightfully allowed to receive it and, where necessary, that it has been encrypted in accordance with Fresh & Easy policy.

The section also advises employees that if they are ever unsure about how to handle Fresh & Easy data, “be cautious and seek advice” from their line manager, Information Security, or the Legal Department. After the United Food and Commercial Workers Union — which has been conducting a union organizing drive at Fresh & Easy — filed an alleged unfair labor practice claiming the policy violated employees’ labor law rights, the Board’s General Counsel issued a formal complaint contending that the statement

“Keep customer and employee information secure. Information must be used fairly, lawfully and only for the purpose for which it was obtained.”



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violated the NLRA because employees would interpret that language as prohibiting them from discussing wages and other terms and conditions of employment with other employees or individuals, including union representatives. The case was first heard by a NLRB Administrative Law Judge (ALJ), who ruled for the company. Noting that the data protection policy was contained in a document addressing ethical issues and referred specifically to “collected” information, the ALJ concluded that employees would understand that it meant private customer and employee information such as customers’ credit information and employees’ social security numbers, medical information and other such information which is customarily maintained in employees’ personnel files, and that employees would not reasonably interpret the policy as prohibiting them from engaging in the kind of discussions of wages and working conditions that the NLRA protects. Split NLRB Rules Policy Violates the NLRA The case then went to a three-member panel of the NLRB, which reversed the ALJ and ruled 2 - 1 that the data protection policy violated the NLRA by interfering with employees’ Section 7 rights. The majority agreed with the Board’s General Counsel that employees would view the requirement to keep employee information secure as prohibiting the disclosure and discussion of wages and terms and conditions of employment. The majority disagreed with the ALJ’s conclusion that the company’s Code was primarily ethical in nature, observing that it also addressed some “broader work issues — e.g., information security, equal opportunity, and unacceptable behavior.” The majority also concluded that the policy language itself was much too broad, and easily could be read as covering any and all employee information. Moreover, the panel majority determined that the admonition requiring employees to use confidential information “only for the purpose for which it was obtained” made the situation even worse, since the “purpose for which it was obtained” likely would not include employee discussions of wages and work conditions, thus reinforcing the impression that that the policy prohibits such activity. Accordingly, the majority found that the policy infringed on employees’ Section 7 rights to discuss wages and working conditions, and ordered the company to rescind its data protection policy. Dissent: Majority Ruling Defies Common Sense The dissenting panel member would have concluded that given the context in which the company presented the data protection policy, coupled with a healthy dose of common sense, employees would not perceive the policy as restricting their NLRA-protected rights. On the contrary, he said, by the time employees get to the data protection policy on page 16 of the

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pamphlet, they are well aware that the Code addresses ethical issues and is not an employee handbook addressing wages and working conditions. The dissenting Board member also charged that the panel majority’s decision ignored Board precedent, which requires the Board to give employer rules a “reasonable reading,” to read rules in context, and to avoid presuming that a rule improperly interferes with NLRA-protected rights. Looking Ahead The NLRB’s ruling in Fresh & Easy is simply the latest in a string of rulings that are finding fault with long-standing, typical company policies and practices. For example, recent NLRB decisions have found NLRA violations in such common policies and practices as barring employees from talking to one another about an internal workplace investigation,6 disciplining an employee for making sexually offensive comments in opposing a union decertification campaign and then lying about it during the company’s internal investigation,7 and discharging an employee for cussing out a manager.8 In this case, the Board’s decision places in potential jeopardy most company data protection policies. The company now has the right to appeal the Board’s ruling to the appropriate federal court of appeals, although no appeal had been filed as of this writing. Questions concerning this memorandum should be directed to Ann Reesman at [email protected] or Mike Eastman at 202-629-5650.

6 See EEAC Memorandum 12-168 (August 31, 2012). 7 See EEAC Memorandum 12-197 (October 12, 2012). 8 See EEAC Memorandum 14-114 (June 5, 2014).





16-114 June 10, 2016 To: EEAC Members From: Joe Lakis President Re: National Labor Relations Board Adopts ALJ Ruling in Cooper Tire &

Rubber Co. Protecting Picketer Who Shouted Racial Epithets In a so-called “short form adoption,” the National Labor Relations Board (NLRB) has endorsed a decision by an Administrative Law Judge (ALJ) reinstating a picketing employee who had been fired for shouting racial epithets at African-American replacement workers because his taunts could not be shown to be threatening or violent. The Board’s decision in Cooper Tire & Rubber Co., 363 NLRB No. 194 (2016), puts this employer and others between a rock and a hard place regarding their legal obligations to prevent unlawful discrimination under Title VII of the Civil Rights Act while not interfering with protections given to employees under the National Labor Relations Act (NLRA). Because of its implications for Title VII compliance, EEAC had filed a “friend-of-the-court” brief with the NLRB in this case arguing that it should not put an employer in a position of having to choose between its obligations under Title VII and the NLRA by preventing the employer from enforcing its anti-harassment policy.1 Nevertheless, and perhaps not at all surprisingly, the current Board — which has been aggressively extending the reach of the NLRA in a series of controversial rulings2 — came down on the side of the NLRA. A copy of the NLRB’s Cooper Tire decision is available online at http://apps.nlrb.gov/link/document.aspx/09031d45820dd149. Background The National Labor Relations Act grants employees the right to “organize together and bargain collectively” with their employer, and to engage in other forms of “protected concerted activity” — including picketing — without unlawful interference.3 The NLRA is enforced by 1 See EEAC Memorandum 15-158 (August 14, 2015). 2 See, for example, EEAC Memorandum 16-099 (May 20, 2016). 3 See EEAC Memorandum 10-148 (August 6, 2010) for a detailed overview of the NLRA.

http://apps.nlrb.gov/link/document.aspx/09031d45820dd149




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the National Labor Relations Board, a quasi-judicial independent federal agency composed of five members appointed by the president and confirmed by the Senate. All four of the current Board members, three of whom are Democrats with strong ties to organized labor, were appointed by President Obama.4 When employees engage in NLRA-protected activities, employers generally cannot discipline them. However, nothing in the NLRA — which was enacted in 1935 — takes into account the potential conflict with other laws that also protect the rights of employees. One of these laws is Title VII of the 1964 Civil Rights Act, which prohibits an employer from discriminating on the basis of race, color, religion, sex, or national origin. Title VII generally requires an employer to take action when employees engage in unlawful harassment, or face liability for failing to do so. The Cooper Tire & Rubber Co. Case Cooper Tire & Rubber Co. manufactures automobile tires at three locations in the United States, including one in Findlay, Ohio. The company maintained and enforced a policy that prohibited unlawful harassment based upon race, color, religion, sex, age, or national origin. The policy further provided that “harassment will not be condoned nor tolerated under any circumstances, whether committed by Cooper employees, vendors, customers, or visitors” and that “any Cooper employees found to be harassing others will be subject to disciplinary action, up to and including discharge.” In 2011, negotiations over a new collective bargaining agreement broke down between Cooper Tire and the local union and the company locked out its Findlay employees. Cooper Tire continued production at its Findlay location, however, using replacement workers from both a third party and its non-union Tupelo, Miss., plant. Many of these replacement workers were African-American. The union set up a picket line and a picketing employee was videotaped making two racially harassing statements directed at the African-American replacement workers as they entered the facility. When the lockout ended, Cooper Tire terminated this employee for violating its anti-harassment policy. The union filed a grievance challenging the employee’s termination, and the dispute went to arbitration. The arbitrator upheld the termination, finding the racist statements were not protected under the NLRA because they increased the possibility of violence on the picket line. In the meantime, the union also filed an unfair labor practice charge with the NLRB. The NLRB regional director refused to defer to the arbitrator’s award upholding the discharge and instead issued a formal complaint alleging that Cooper Tire violated the NLRA by discharging the employee for engaging in NLRA-protected activity.

4 There is currently one vacancy on the five-member NLRB.

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The case went to a hearing before an NLRB ALJ, who sided with the regional director, finding that the NLRA protected the employee’s racist statements because they were not shown to be violent or threatening. In addition, the ALJ concluded that it was not appropriate to defer to the arbitrator’s award because the award was “repugnant to the [NLRA].” The ALJ then ordered Cooper Tire to reinstate the employee and awarded him back pay. NLRB Summarily Affirms the ALJ Decision On May 17, 2016, in a brief three-paragraph “short form adoption” decision, a three-member panel of the Board5 adopted the ALJ’s finding that the employee’s racist and offensive conduct was protected by the NLRA because it was not violent in character, was not accompanied by violent or threatening behavior, and did not raise a reasonable likelihood of imminent physical confrontation. According to the Board, this case was distinguishable from other cases involving racially offensive statements because here the statements were made after a closed van carrying the workers had passed. The Board also adopted, without any explanation, the ALJ’s finding that deferral to the arbitrator’s award was inappropriate because the arbitrator’s decision was “clearly repugnant” to the NLRA. Significance As EEAC argued in its “friend-of-the-court” brief filed with the Board in this case, even though NLRA rights might be involved — in this case, the right to participate in a union picket line — they should not prevail over the employer’s right to discipline an employee who engaged in offensive racially harassing behavior aimed at other employees. The NLRB saw it differently, however, essentially condoning racist taunts in the name of protecting NLRA rights. Looking ahead, Cooper Tire has the right to appeal the Board’s ruling to the appropriate U.S. Court of Appeals. EEAC will closely monitor and report on further developments as they occur. Questions concerning this memorandum should be directed to Lance Gibbons at 202-629-5650.

5 The NLRB often decides cases with a three-member panel, similar to the three-judge panel rulings issued by the federal appeals courts. In this case, the three-member panel was comprised of the three Democratic members: Chairman Mark Gaston Pearce and Members Kent Y. Hirozawa and Lauren McFerran.


14-114 June 6, 2014 To: EEAC Members From: Joe Lakis President Re: NLRB Rules Once Again That Profanity-Laden Verbal Assault by

Employee on Manager Is Protected Conduct Under Federal Labor Law Most folks would agree that an employer would be justified in firing an employee who engages in a profanity-laden and personal verbal assault on a manager. Not the National Labor Relations Board (NLRB, or Board), however. According to the Board, if the outburst occurs during a discussion of employment conditions, it is protected conduct under the National Labor Relations Act (NLRA), and insulates the employee from any discipline. Moreover, it does not matter if it happens in a union or non-union setting. In Plaza Auto Center, Inc.,1 a split Board, ruling for a second time in the case, applied a long-standing test to determine whether employee conduct is so egregious that it loses the protection of the NLRA, and concluded that a used car salesman’s cuss-filled rant at his bosses was protected. Under the rationale applied by the Board, it would appear that profanity, by itself, can never be sufficiently egregious so as to justify discharge of an employee otherwise engaged in protected conduct. Worth noting, the five-member NLRB, currently comprised entirely of appointees made by President Obama, ruled once again in favor of the employee in this case even though the liberal Ninth Circuit Court of Appeals, in a decision that EEAC reported,2 had reversed the Board’s first ruling on grounds that the agency misapplied the test and did not give adequate deference to the underlying ruling by an NLRB Administrative Law Judge which found the firing was justified. A copy of the NLRB’s opinion in Plaza Auto Center is available on the NLRB’s website at http://mynlrb.nlrb.gov/link/document.aspx/09031d4581728ab9.

1 Plaza Auto Center, Inc., 28-CA-022256 (NLRB May 28, 2014). 2 See EEAC Memorandum 12-008 (January 13, 2012).


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Background Under the NLRA, employees are guaranteed the right to engage in protected concerted activity, which generally includes discussions about working conditions among employees or between employees and management.3 Under a test first established by the NLRB in 1979,4 however, an employee can lose the protection of the Act even when otherwise engaging in protected activity if his or her behavior is considered to be egregious, including “opprobrious or abusive” conduct. Specifically, in deciding whether an employee’s egregious behavior loses the protection of the NLRA, the Board considers four factors:

1. the place of the discussion; 2. the subject matter of the discussion; 3. the nature of the employee’s outburst; and 4. whether the outburst was, in any way, provoked by an employer’s unfair labor practices.

Perhaps not surprisingly, although the test has been around since 1979, it has not necessarily been consistently applied. Plaza Auto Center, Inc. The case of Plaza Auto Center, Inc. involves the termination of a relatively new salesperson, Nick Aguirre, by a used car dealership. Shortly after he was hired, Mr. Aguirre made several inquiries about working conditions both to management and among other employees. This included inquiries related to breaks, restroom facilities, and compensation. Plaza’s typical response to these inquiries was that Aguirre was free to work elsewhere if he did not like working there. The situation came to a head after Aguirre informed his office manager that Plaza was improperly withholding minimum wage compensation from commissioned salespeople. He was called to a meeting with management, where his bosses criticized Aguirre’s negative attitude toward company policies and told him once again that if he did not trust the company, then he did not need to work there. During the course of the meeting Aguirre became increasingly upset, and directed numerous profanity-laden insults at management and told one sales manager present that “he was stupid, nobody liked him, and that everyone was talking about him behind his back.” Aguirre also told his bosses that if he was fired, they would “regret it.” There was conflicting testimony

3 For a primer on the National Labor Relations Act, see EEAC Memorandum 10-148 (August 6, 2010). 4 Atlantic Steel Co., 245 N.L.R.B. 814 (1979).


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regarding whether Aguirre threw his chair during the outburst or pushed it aside. In any event, Aguirre was discharged for his outburst. The case was first heard by an Administrative Law Judge (ALJ) who determined that Aguirre was engaging in protected conduct during his meeting with his bosses. Applying the four factor test outlined above, the ALJ determined that three of the four factors weighed in favor of protection: the place of discussion (and of the outburst) was in a private office, not in a place where it would disrupt the workforce; the subject matter of the meeting, concerning important terms and conditions of employment; and the outburst was provoked by the employer’s interfering with Aguirre’s protected right to ask about working conditions without repeatedly being invited to resign. The ALJ concluded that the remaining factor, however, weighed strongly against protection. As the Judge noted, Aguirre “repeatedly reviled [management] in obscene and personally denigrating terms accompanied by menacing conduct and language.” The ALJ also characterized the outburst as belligerent, physically aggressive, and menacing. All of this was enough to justify his discharge. Upon review, the NLRB reversed, finding among other things that Aguirre’s outburst was “brief” and did not constitute any “threat of physical harm.” Plaza appealed to the Ninth Circuit, which concluded that the Board erred in its application of the four factor test and failed to give sufficient deference to the ALJ’s factual and credibility findings.5 The appeals court also criticized the Board for seeming to adopt a rule requiring an outburst to be accompanied by physical force or at least threat of physical force to lose protection of the NLRA. NLRB Once Again Protects Profane Outburst Despite the Ninth Circuit’s admonition, the NLRB once again has ruled that Aguirre’s outburst could not have been menacing, physically aggressive, or belligerent, and that therefore it fell within the protection of the NLRA. Disagreeing with the ALJ’s findings, the Board found that Aguirre’s profane and derogatory outburst was instead a “spontaneous reaction” to the employer’s “provocative and unlawful statements.” In a strong dissent, Board Member Harry Johnson, a former management-side labor lawyer, stated that the majority has created a standard that will allow employees to curse, denigrate, and defy managers with impunity during the course of otherwise protected activity. He accused his colleagues of being out of touch with the realities of the American workplace, and for failing to recognize the legitimate reasons employers have for proscribing profane behaviors that could be viewed as harassing or bullying, could create a hostile work environment, or could be a warning sign of workplace violence.

5 See EEAC Memorandum 12-008.


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Significance It seems pretty clear that the NLRB, at least as currently comprised, is not likely to find that an employee has lost the protections of the NLRA for any profanity-laden screed, absent additional evidence of threatening conduct. That has unfortunate implications for employers that have adopted zero-tolerance policies with regard to any actions or statements that are perceived as threatening. Plaza has the right to appeal this latest ruling to the Ninth Circuit. EEAC will continue to track and report on further developments as they occur. Questions concerning this memorandum should be directed to Mike Eastman at 202-629-5650.


12-197 October 12, 2012 To: EEAC Members From: Jeffrey A. Norris President Re: NLRB Issues Another Controversial Ruling in Fresenius Inc., Finds

Employer Liable for Discharging Worker That Violated Company’s Anti-Harassment Policy

In yet another controversial decision, the National Labor Relations Board (NLRB) has ruled that an employer committed an unfair labor practice when it discharged an employee who made vulgar, offensive, and possibly threatening comments and who initially lied to management about making them. The Board found that the employee was engaged in protected union-related activity at the time he made the offensive comments, and that his employer violated his rights under the National Labor Relations Act (NLRA) by firing him. The NLRB’s decision in Fresenius USA Manufacturing, Inc., is the latest in a series of recent rulings by the NLRB that have applied the NLRA in a way that has created potential conflicts with employer policies designed to prevent employee misconduct. Just a few weeks ago, for example, we reported on another Board decision that called into question an employer’s ability to keep internal investigations confidential.1 Cases such as Fresenius illustrate how employers sometimes can get caught between a rock and a hard place when trying to meet their legal obligations, as well as the parochialism often displayed by federal enforcement agencies in enforcing their requirements to the exclusion of any other requirements that might apply. A copy of the Board’s decision in Fresenius is available online at http://mynlrb.nlrb.gov/link/document.aspx/09031d4580c6ad9a. Background It is a well-established principle that in order to minimize liability under Title VII and other anti-discrimination laws, not to mention simply good employment policy, employers


http://mynlrb.nlrb.gov/link/document.aspx/09031d4580c6ad9a


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should have a well-communicated anti-harassment policy that requires the employer to promptly investigate allegations of harassment and take immediate and appropriate corrective action where warranted. Even while acknowledging that an employer has a duty to comply with antidiscrimination requirements, the NLRB has, over the years, been especially protective of otherwise objectionable employee conduct if the conduct arguably is covered by the NLRA. The NLRA protects the rights of employees to engage in protected concerted activity for their mutual aid and protection. The scope of protected concerted activity is very broad and includes the right of employees to form, join, or assist a union as well as the right of employees to act together to improve working conditions.2 These rights apply to both union and non-union employees. Among the many ways an employer can commit an unfair labor practice under the NLRA is by disciplining or discharging an employee for engaging in protected concerted activity. Fresenius USA Manufacturing, Inc. Fresenius employee Dale Grosso anonymously scribbled comments on three union newsletters that were left in the employee break room in an attempt to encourage fellow employees to read the newsletters and ultimately support the existing union in the face of a scheduled “decertification” election.3 Specifically, he wrote respectively on each newsletter “Pussies, Please Read!”; “Hey cat food lovers, how’s your income doing?”; and “Warehouse workers, RIP.” Janet Buxbaum, a female warehouse worker, found the comments to be offensive and threatening, and reported them to management. She pointed to the Fresenius employee handbook’s statement regarding a safe work environment and voiced the opinion that “something needed to be done.” Several other female employees also complained that the comments were vulgar, offensive, and threatening. The company’s anti-harassment policy states that upon receiving a complaint or obtaining knowledge of alleged harassment, Fresenius will investigate and respond immediately. Under the policy, if harassment occurs, corrective action will be taken up to and including termination of the perpetrator. Consistent with that policy, on the day the complaints about the offensive comments were made, a company official met with the complaining employees and promised to investigate.

2 See EEAC Memorandum 10-148 (August 6, 2010) for a detailed primer on the NLRA and its requirements. 3 A decertification election is an election held by the National Labor Relations Board to determine whether or not an existing union is supported by a majority of employees. If the union loses the election, it is effectively ousted and cannot seek to represent the employees again for at least one year.


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Two weeks later, after an employee meeting, several female warehouse workers again expressed concern to company officials about the comments. Although Grosso initially denied writing the offensive comments, based on information that was offered by one of the complaining employees, he eventually acknowledged that he had written them. He was suspended pending further investigation, and ultimately terminated both for writing the offensive comments and initially lying about it. Grosso then filed an unfair labor practice charge, which the NLRB’s General Counsel (GC) prosecuted. An NLRB Administrative Law Judge (ALJ) found no violation, and the case went to the full NLRB for a final administrative determination. NLRB: Offensive Comments Were Protected Activity Under Federal Labor Law Reversing the ALJ, the Board concluded that Grosso was engaged in protected, concerted activity because his comments urged his co-workers to support the union in the upcoming decertification election. According to the Board’s GC, Fresenius as well as Grosso’s co-workers who complained all understood that the newsletter comments were related to the ongoing union decertification campaign. The Board first responded to the employer’s assertion that Grosso was terminated, in part, for his dishonesty about having written the comments. In a footnote, the Board asserted that Fresenius could not lawfully discipline Grosso on such grounds, stating that its precedents hold that an employee cannot be compelled to reveal his or her protected activity where the inquiry is “unrelated to the employee’s job performance or the employer’s ability to operate its business.” Consequently, even though the employer had a legitimate right to question Grosso, the NLRB said Grosso had a protected right “not to respond truthfully.” The Board next found that because Grosso was engaged in protected activity when he wrote the comments, the only relevant issue was whether his conduct was so egregious so as to lose the protection of the NLRA. In concluding that it was not, the Board relied on a line of earlier NLRB cases giving great latitude to employee use of profane or malicious language. The Board considered four factors in determining that Grosso’s comments all were either neutral or favored protection under the NLRA. First, the Board considered the location of the comments, the break room, to weigh in favor of continued protection or at minimum neutral. Second, the Board found the subject matter of the comments, urging support of the union, strongly favored protection. Third, the Board found that the nature of the outburst also favored protection because the comments seemed impulsive and were made in the context of a work site where profanity was commonly used without consequence. Finally, because the comments were not provoked, the Board found them to be neutral.

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The Board thus concluded that both Fresenius and other employees knew or should have known that “Grosso’s comments had nothing to do with harassment and everything to do with the upcoming decertification election.” Significance Perhaps not surprisingly, both given the current makeup of the NLRB4 and the fact that the next Congress is not likely to make any union-supported changes to the NLRA no matter who wins this fall’s Presidential election, the Board has ventured aggressively into new territory in an effort to expand employee rights, including the protection of employees’ social media use5 and sheltering employees from discipline for what otherwise would be considered misconduct. As a result, employers now must be sure to take NLRA considerations into account as they initiate investigations into employee misconduct and as they consider what appropriate corrective action to take. Questions concerning this memorandum should be directed to Mike Eastman at 202-629-5625.

4 The current Chairman of the NLRB is Mark Gaston Pearce. The other three Members are Richard F. Griffin, Jr., Sharon Block, and Brian Hayes. There is one vacancy. Chairman Pearce and Members Griffin and Block are Democrats. Member Hayes is the sole Republican on the Board. 5 See, for example, EEAC Memoranda 12-130 (July 6, 2012), 12-054 (March 16, 2012), and 11-164 (August 26, 2011).






12-008 January 13, 2012 To: EEAC Members From: Jeffrey A. Norris President Re: Ninth Circuit, Splitting With DC Circuit, Says Prof anity-Laced Verbal

Outburst Directed at Supervisor Can Fall Outside of NLRA’s Protection In a welcome and unexpected ruling, the normally pro-employee U.S. Court of Appeals for the Ninth Circuit, disagreeing with the conclusion reached by another federal appeals court in a similar case decided last year, has ruled that the National Labor Relations Board (NLRB) was wrong to order reinstatement of an employee who was fired after unleashing a profanity-laced outburst towards his supervisor. In Plaza Auto Center v. NLRB, Nos. 10-72728, 10-73125 (9th Cir. December 19, 2011), the Ninth Circuit concluded that the NLRB’s rationale was inconsistent with the agency’s own precedent. The court said that just because the verbal outburst did not include actual or threatened physical harm, aggression, or insubordination — which the NLRB said had to occur — the conduct was not automatically protected under the NLRA. In fact, the Ninth Circuit observed that “offensive and personally denigrating remarks alone [can] result in loss of [the NLRA’s] protection.” In a similar case that we reported on last year, a sharply divided D.C. Circuit upheld an NLRB ruling reinstating two employees who were fired after verbally abusing their supervisor.1 Unlike the Ninth Circuit here, the D.C. Circuit in that case did not find sufficient reason to disagree with the NLRB’s rationale. The Ninth Circuit’s decision in Plaza Auto Center is available online at http://www.ca9.uscourts.gov/datastore/opinions/2011/12/19/10-72728.pdf. Background Under the major federal EEO laws such as Title VII of the Civil Rights Act or the Americans with Disabilities Act (ADA), an employee who engages in misconduct such as verbal


http://www.ca9.uscourts.gov/datastore/opinions/2011/12/19/10-72728.pdf


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abuse of his or her supervisor is not protected under the law simply because of their membership in a protected class.2 The National Labor Relations Act (NLRA), however, has been interpreted to protect otherwise unacceptable conduct when it is exercised as concerted activity “for the purpose of collective bargaining or other mutual aid or protection.”3 Over the years, cases decided by the NLRB and the courts have reasoned that to be “concerted,” the activity engaged in must include other employees or be authorized by other employees, and typically does not occur where an employee has acted solely on his or her own. To be “protected,” the conduct engaged in must be for the purpose of collective bargaining or other “mutual aid or protection,” which has been defined by the U.S. Supreme Court to include “matters of common concern.”4 An employee who is otherwise engaged in NLRA-protected conduct may lose that protection if the conduct is determined to be outrageous. In the case where an employee’s spoken remarks are at issue, the NLRB typically considers and weighs the following four factors articulated in a 1979 ruling5 in determining whether the outburst falls outside the protection of the NLRA: 1) the location of the conduct; 2) the subject matter of the conduct; 3) the nature of the employee’s outburst; and 4) whether the outburst was, in any way, provoked by an employer’s unfair labor practice. Plaza Auto Center v. NLRB Nick Aguirre was hired as a used car salesman by Plaza Auto Center in August 2008 to work at three-day weekend tent sales. When Aguirre inquired during his first weekend shift, and again later at a weekly sales meeting, about bathroom and meal breaks, he was told to use whatever facilities he could find. Aguirre also was told that if he did not like the company’s policies, he was free to leave at any time. At a subsequent tent sales event, Aguirre engaged other Plaza salespersons in a discussion about breaks, as well as a discussion about the company’s compensation practices. Later, at a follow-up sales meeting, one of the salespersons raised the issue of compensation and was told that if the employees “did their jobs correctly and followed all of the procedures, they would make money.” On another occasion, Aguirre questioned his supervisors on the amount of a sales commission he had received, which he and other salespersons believed was below standard and unfair. Aguirre’s supervisors responded that his commission was low because he “had given the vehicle away almost for free.”

2 See, for example, EEAC Memorandum 08-191 (September 12, 2008). 3 For additional background on the NLRA, please see EEAC Memorandum 10-148 (August 6, 2010). 4 N.L.R.B. v. Washington Aluminum Co., 370 U.S. 9 (1962). 5 Atlantic Steel Co., 245 N.L.R.B. 814 (1979).



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At another sales meeting, Plaza informed its salespersons that it was going to deduct the repair costs for a damaged vehicle equally from each of their paychecks if no one admitted responsibility. Aguirre responded that it was unfair to charge only the salespersons and not all of the other employees with access to the vehicle as well. The Plaza representative then accused the sales force of being “negative” and stated that he had other salespersons he easily could hire to take their jobs. Aguirre continued to inquire about and research Plaza’s compensation practices, including how much the vehicles cost the dealership, and Plaza continued to respond by telling him he could look elsewhere for a job. Plaza finally confronted Aguirre in late October 2008 about his “negativity” and about asking too many questions, and told him that if he did not like the policies at Plaza he should not work there. Aguirre lost his temper and in a raised voice started berating his supervisor, using a variety of obscenities, calling him stupid, and telling him that nobody liked him and that everybody talked about him behind his back. He finished his tirade by telling Plaza that if they fired him, which they proceeded to do, they would regret it. Aguirre filed a labor law charge with the NLRB, and the Board’s General Counsel then brought a formal unfair labor practice complaint against Plaza. Following an evidentiary hearing, an NLRB administrative law judge (ALJ) ultimately concluded that even though Aguirre was engaging in protected activity at the time of his outburst, his obscene remarks and personal attacks on his supervisor caused him to lose the protection of the NLRA. The case then went before the full NLRB, which reversed the ALJ’s finding on the basis that Aguirre’s conduct was not so severe as to lose the protection of the NLRA. Ninth Circuit: Offensive and Denigrating Remarks Can Be Enough To Fall Outside the NLRA’s Protection Applying the “Atlantic Steel” four-factor test described above with respect to Aguirre’s outburst, the Ninth Circuit agreed with both the ALJ and NLRB with regard to factors one, two and four, concluding that all weighed in favor of the NLRA’s protection. With regard to the first factor, i.e., the location of the discussion, the appeals court found that the meeting at which Aguirre’s outburst took place was in the supervisor’s office, away from other employees. His supervisor was not embarrassed in front of other employees and Aguirre’s conduct did not affect employee discipline. Additionally, the subject matter of the discussion (factor two) revolved around Aguirre’s terms and conditions of employment, specifically, breaks and compensation. Even the discussions around the cost of the vehicles to Plaza, the court reasoned, were included in “terms and conditions of employment” as the topic was intertwined closely with Aguirre’s concerns about receiving poor compensation.

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The Ninth Circuit court also found that Aguirre’s outburst was provoked by Plaza’s unfair labor practices, namely, the dealership’s characterization of Aguirre’s questions and complaints about the terms and conditions of his employment as “a lot of negative stuff” and its suggestions that Aguirre and other sales persons look elsewhere for employment if they did not like Plaza’s policies. On the crucial third factor, however — the nature of Aguirre’s outburst — the Ninth Circuit did not agree with the NLRB. According to the court, the NLRB’s conclusion that Aguirre’s outburst was not outside the range of NLRA-protected conduct because it was brief and did not include actual or threatened physical harm, aggression, or insubordination, was in error. The court reasoned that under this interpretation, absent actual or threatened physical harm, an employee’s words alone would never warrant a loss of NLRA protection. The appeals court went on to point out that this interpretation was inconsistent with the NLRB’s own precedent where the Board has concluded on a number of occasions that an employee’s “offensive and personally denigrating remarks alone [could] result in loss of protection.”6 [Emphasis added.] The Ninth Circuit also chastised the NLRB for stating that it was adopting the ALJ’s credibility and factual findings regarding Aguirre’s conduct at the meeting where the outburst occurred, but conveniently ignoring the ALJ’s findings that Aguirre’s behavior was “belligerent,” “menacing,” and “at least physically aggressive if not menacing.” Ultimately, the Ninth Circuit concluded “that the Board erred in its initial assessment that the nature of Aguirre’s outburst weights in favor of protection” and that under the NLRB’s own precedent, “obscene, degrading, and insubordinate comments may weigh in favor of lost protection even absent a threat of physical harm.” Significance Many employers, given a legitimate concern about the possibility of workplace violence, have adopted a strict zero-tolerance policy with regard to any actions or statements that are perceived as threatening. The Ninth Circuit’s ruling in this case offers support for employers that have adopted such a policy. Questions concerning this memorandum should be directed to Judy Lampley at 202-629-5696.

6 Care Initiatives, Inc., 321 N.L.R.B. 144 (1996).


11-161 August 19, 2011 To: EEAC Members From: Jeffrey A. Norris President Re: Divided D.C. Circuit Upholds NLRB Ruling in Kiewit Power Constructors

Reinstating Employees Who Made Verbal Threats to Supervisor Despite the best efforts of employers to implement effective workplace violence prevention programs, every once in awhile we run across a development that serves to frustrate those efforts. In the latest instance, a divided U.S. Court of Appeals for the D.C. Circuit has upheld a ruling by the National Labor Relations Board (NLRB, or Board) that reinstated two electricians who were fired after verbally threatening their supervisor. The 2 - 1 decision by the D.C. Circuit in Kiewit Power Constructors v. NLRB, No. 10-1289 (D.C.Cir. August 3, 2011), upheld a determination by the Board overturning a well-reasoned decision by one of the agency’s Administrative Law Judges that had concluded the employees’ terminations were justified. Instead, the NLRB found, and the court majority acquiesced, that there were no direct threats of physical violence, and therefore the remarks made by the two electricians were protected conduct under the National Labor Relations Act (NLRA). In a strong dissent, Judge Karen LeCraft Henderson stated that “The Board’s reinstatement — seconded by my colleagues — of employees who openly challenge by threatening language lawful decisions of their employer compels me to observe: ‘So much for industrial peace.’” The D.C. Circuit’s decision is available online at http://www.cadc.uscourts.gov/internet/ opinions.nsf/5B8633A1B01516E8852578E10064B189/$file/10-1289-1322255.pdf. Background The National Labor Relations Act (NLRA), which is enforced by the five-member NLRB, guarantees the right of employees to form or join labor organizations, bargain

http://www.cadc.uscourts.gov/internet/opinions.nsf/5B8633A1B01516E8852578E10064B189/$file/10-1289-1322255.pdf

http://www.cadc.uscourts.gov/internet/opinions.nsf/5B8633A1B01516E8852578E10064B189/$file/10-1289-1322255.pdf

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collectively through designated representatives, and engage in other protected concerted activity “for the purpose of collective bargaining or other mutual aid or protection.”1 Over the years, cases decided by the NLRB and the courts have reasoned that to be “concerted,” the activity engaged in must include other employees or be authorized by other employees, and typically does not occur where an employee has acted solely on his or her own. To be “protected,” the conduct engaged in must be for the purpose of collective bargaining or other “mutual aid or protection,” defined by the U.S. Supreme Court as to including “matters of common concern.”2 An employee who is otherwise engaged in NLRA-protected conduct may lose that protection if the conduct is determined to be over the edge. In determining whether an employee’s remarks rise to this level, the NLRB typically considers and weighs the following four factors: 1) the location of the discussion; 2) the subject matter of the discussion; 3) the nature of the employee’s outburst; and 4) whether the outburst was, in any way, provoked by an employer’s unfair labor practice. Kiewit Power Constructors v. NLRB The affected individuals in this case were two electricians working for Kiewit on the construction of a turbine building and cooling tower. They were represented by the International Brotherhood of Electrical Workers (IBEW), and under the collective bargaining agreement (CBA) between the IBEW and the company, Kiewit was required to provide electricians on the job with a 30-minute lunch break. Although not required by the CBA, Kiewit also gave the electricians two 15-minute breaks, one in the morning and one in the afternoon. Because the normal break area was a distance from where they worked, the breaks typically exceeded 15 minutes because of the time it took the electricians to walk to the break area. Kiewit attempted to resolve the problem by requiring them to take their 15-minute breaks “in place,” in other words, at their workstations. The electricians refused, and continued to go to the normal break area. Kiewit then decided to issue verbal warnings to any workers who refused to “break in place.” When the field superintendent delivered this message to one of the electrical crews at the job site, however, the two electricians involved in this case responded to him that if they were laid off for taking the breaks where they preferred, “it’s going to get ugly and [the field superintendent] better bring [his] boxing gloves.” The field superintendent then exited the area without further incident.

1 For additional background on the NLRA, please see EEAC Memorandum 10-148 (August 6, 2010). 2 N.L.R.B. v. Washington Aluminum Co., 370 U.S. 9 (1962).


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After he reported the electricians’ outburst to his supervisor and the fact that the remarks were made in anger, and following consultation with other company managers, Kiewit made the decision to fire the two electricians. The IBEW filed a grievance on their behalf, but, after meeting with Kiewit managers, all parties agreed that the company’s termination of the employees had not violated the CBA. The two electricians then filed a complaint with the NLRB, which in turn brought unfair labor practice charges against Kiewit. The case was heard by a Board ALJ, who upheld the terminations, concluding that the employees’ remarks constituted threats of physical violence outside the protection of the NLRA. The case then went to the full NLRB, which reversed the ALJ and found that the employees’ outbursts were not actual threats of physical violence. Rather, said the Board, they were figures of speech and thus protected conduct under the NLRA, and ordered the employees to be reinstated. D.C. Circuit: Outbursts Were Protected Conduct Under the NLRA On Kiewit’s appeal, a divided three-judge panel of the D.C. Circuit affirmed. In looking at the 4-factor test used to determine whether an employee’s outburst loses the NLRA’s protection, the court said it was necessary to look at only two factors, since the parties had already agreed that the subject matter of the electricians’ remarks was protected and their outbursts were not in response to an unfair labor practice. We should point out that the standard of review applied by the D.C. Circuit in reviewing a determination by the NLRB requires the court to give the Board’s ruling a “very high degree of deference,” and allows reversal only if the court finds that the Board’s determination “has no rational basis” or “is unsupported by substantial evidence.”3 Here, said the court, the NLRB had found that the location of the outburst (the second factor), namely, at the job site and among other crew members, should be considered protected under the NLRA because Kiewit chose the setting in which to make its announcement and should have reasonably expected that employees would react and protest on the spot. According to the D.C. Circuit, this finding was not arbitrary or capricious. With regard to the nature of the electricians’ outbursts (the third factor), the court concluded that sufficient evidence and precedent existed to support the NLRB’s determination and that “given [the court’s] narrow standard of review, [the court] had no warrant for reversing the NLRB’s determination” that the electricians’ were “doing nothing more than disagreeing vehemently with Kiewit’s policy.” 3 United Steelworkers of Am. v. NLRB, 983 F.2d 240, 244 (D.C. Cir. 1993) (quoting United Mine Workers of Am., Dist. 31 v. NLRB, 879 F.2d 939, 942 (D.C. Cir. 1989).

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Dissent: “So much for industrial peace” In a vigorous dissent, Judge Henderson disputed the majority’s conclusion with respect to the third factor, stating that the NLRB’s ruling was unreasonable, capricious, and arbitrary in that it required threatening remarks to be accompanied by conduct suggesting a physical threat in order to fall outside the protections of the NLRA. She pointed out that such a finding was contrary to legal precedent and cited a number of D.C. Circuit cases in which the Board had “expressly disavowed any rule whereby otherwise protected activity ‘would shield any obscene insubordination short of physical violence,’”4 and that the Board had “rejected the ... argument that ... employees could not be dismissed unless they were involved in flagrant, violent, or extreme behavior.”5 Furthermore, Judge Henderson complained that the majority opinion and the Board both “cast aside” the ALJ’s “careful and detailed [evidentiary] findings” and relied solely on “Board decisions that treated threatening statements as protected.” Also, she argued that the context and factual situations in the decisions relied upon by the majority and the Board were quite different from those in this case. Indeed, the ALJ heard testimony from several witnesses and was able to assess the credibility and demeanor of those witnesses with regard to the context in which the words were spoken and how the remarks were perceived by the field superintendant at whom they were directed. The ALJ concluded that the words were, as perceived, threatening. Furthermore, Judge Henderson observed that although the majority recognized the importance of the context in which words are spoken, it chose to disregard that context in this case. Significance Because of concern about the possibility of workplace violence, many employers have adopted a strict zero-tolerance policy with regard to any actions or statements that are perceived as threatening, which is exactly how Kiewit responded in this case. By concluding otherwise, however, the NLRB and the D.C. Circuit have complicated the efforts of employers to enforce such policies. Questions concerning this memorandum should be directed to Judy Lampley at 202-629-5696.

4 Felix Indus., Inc. v. NLRB, 251 F.3d 1051, 1055 (D.C. Cir. 2001) (quoting Atlantic Steel Co., 245 N.L.R.B. 814, 817 (1979)). 5 Aroostook Cnty. Reg’l Ophthalmology Ctr. v. NLRB, 81 F.3d 209, 215 n.5 (D.C. Cir. 1996).