NLRB Upholds Legality of Facebook Firing

The NLRB issued its decision today in Karl Knauz Motors, Inc. Readers will recall that the employee at Knauz’s BMW dealership filed a charge alleging that he had been unlawfully terminated for engaging in NLRA-protected activity when he was fired for comments he’d made on his Facebook page. The employee-salesman first posted critical comments about the dealership’s plans for a big sales event. Shortly thereafter, the employee posted pictures of a small vehicle accident involving a customer at the Range Rover dealership next door, which was also owned by Karl Knauz. The employer fired the salesman when a competitor reported the photographs.

An ALJ determined that the employee had engaged in protected concerted activity when he posted about the sales event. He was not engaged in protected activity when he posted the accident pictures because, “It was posted solely by [the employee], apparently as a lark, without any discussion with any other employee of the Respondent and had no connection to any of the employees’ terms and conditions of employment.”

The Board’s decision, dated September 28 and released today, found that the termination did not violate the NLRA because the activity was not concerted or protected. This is a small victory for employers–but a victory, nonetheless. There has been a great deal of activity at the NLRB in the recent weeks and we can expect more in the weeks to come.

A Good Week for California’s Pro-Labor Movement

Last week was a busy one at the Governor’s office, where Governor Jerry Brown signed into law no less than three new laws with a pro-labor, pro-employee theme. The first two laws were a package deal, making California is the first State to enact legislation that prohibits employers and educators from requesting employees’ and students’ social-networking passwords. Gov. Brown announced that he’d signed the twin bills into law via a Twitter post on Thursday.
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California is the second State after Delaware to prohibit universities and colleges from requiring students to turn over their passwords to their social-networking accounts. It is the third State, following Maryland and Illinois, to enact similar legislation providing these privacy protections to employees and applicants. And similar legislation is pending in several States. New Jersey’s version of the Facebook-privacy law was released by a Senate committee at the end of September.

The day after Gov. Brown signed the bills into law, he signed a third bill, which declared May to be Labor History Month. What, you ask, does this actually mean? Well, it means that school districts in the State will commemorate the month with educational exercises intended to teach students about the role of the labor movement in California and across the country.

The bill extends Labor History Week into a full month and moves the observation from the first week of April to the month of May. According to the Sacramento Bee, many of California’s school districts are on spring break the first week of April, and supporters of the bill said the rest of the month is busy for students because they are preparing for statewide tests.

I think it’s safe to say that last week was a good week for the pro-labor movement in California.

Sticks ‘n Stones May Break Your Bones, But Workers Can Defame You

The NLRB continues to whittle away the ability of employers to manage the operations of their businesses. In the past two years, the NLRB and its Acting General Counsel have issued a slew of opinions and advisory memoranda in which they’ve proclaimed various workplace rules to be in violation of the NLRA. Many of the rules they’ve found to be unlawful have been standard issue in workplaces around the country for many years. And many employers (and employers’ lawyers) believe that the NLRB’s interpretation of the Act is alarmingly overbroad.

The latest decision that threatens the workplace as we know it was issued last week, on September 7. In Costco Wholesale Corporation, Case 3A-CA-012421, 358 NLRB No. 106, Chairman Pearce and Members Griffin and Block overturned the ruling of an Administrative Law Judge. There were several workplace rules at issue in the case but the one of particular interest to me read as follows:

[S]tatements posted electronically . . . that damage the Company, defame any individual or damage any person’s reputation, or violate the policies outlined in the Costco Employee Agreement may be subject to discipline, up to and including termination of employment.

When I read that prohibition, I am inclined to give it a pretty high grade. What I like most about the provision is that it requires actual harm to occur. It does not prohibit employees from engaging in social-media in a way that may cause harm or that may damage the reputation of the company or others. It requires that some harm actually occur before a violation will be found.

Alas, the NLRB and I apparently use a different grading scale because the Board found that the policy was, indeed, overly broad in violation of the Act. The Board’s analysis, as it always does, turns on whether the policy would reasonably tend to chill employees in the exercise of their Section 7 rights.

The Board found that this policy would chill such speech because its “broad prohibition” clearly encompasses concerted communications protesting the company’s treatment of its employees. In other words, the NLRB concluded that employees would likely construe the rule as prohibiting them from speaking negatively about the Company.

So how could the rule be fixed? Well, the Board implied that there may be two ways to improve it, if not correct it entirely. First, the Board indicated yet again that disclaimer language may have saved the policy. If there had been some language explaining that the rule did not apply to protected activities, that may have helped. (No guarantee, of course, nor was there any sample language provided).

Second, the Board indicated that the rule should have been limited to acts that fall outside the protections of the NLRA, such as conduct that is “malicious, abusive, or unlawful.” I could almost laugh out loud at this suggestion. Almost.

In my opinion, a policy should never hinge on intent. Who’s to say what the “real” reason is when an employee posts a negative comment about his employer? Maybe it’s malice. Maybe it’s stupidity. Maybe he’s having a really bad day and just wants to take it out on somebody or something other than himself. Who knows? Not me and, I suggest, not his employer. Let’s not play Backseat Psychic, shall we? Leave the intent-based restrictions to my colleagues who practice criminal law.

If there’s one thing I’d give the NLRB, it’s consistency. If a workplace rule attempts to regulate employees’ online activities, it’s a safe bet that the Board is going to be skeptical of it, at the least. Even if the rule prohibits employees from harming their employer, the Board may find it to violate the NLRA. Harm away, employee. Harm away.

Is the NLRB In Need of a Dictionary?

A recent decision by the NLRB has many employers (and their lawyers) up in arms. It has left me wondering whether maybe the Board needs a dictionary. Blacks-Law-Dictionary.jpg

In Banner Health Systems, 358 NLRB 93 (2012), the Board held that an employer’s instruction to employees to keep information confidential during an internal investigation violated the employee’s Section 7 rights under the NLRA. In that case, an employee filed an internal whistleblower complaint about instructions he’d received from his supervisor that the employee felt would endanger patients. An HR consultant told the employee not to discuss the matter with co-workers while it was being investigated.

The ALJ held that this prohibition did not violate the NLRA but the NLRB disagreed.
As the basis for its finding, the NLRB found that, although an employer could require its employees to maintain the confidentiality of an investigation, it must first determine whether that step is really necessary. The Board held that, to make this determination, an employer must first look at whether: (1) witnesses were in need of protection; (2) evidence was in danger of being destroyed; (3) testimony was in danger of being fabricated; and (4) there was a need to prevent a cover-up.

So, dear readers, have you ever conducted an internal investigation in the workplace? An “investigation,” by its very definition, implies that there is a suspicion and/or report of wrongdoing. (You don’t say that you’re going to “investigate” whether an employee put in all-star effort to exceed his sales quota last month, do you?). If you are conducting an investigation of any kind and under any circumstances, I would argue that, at the very least, the last three questions suggested by the Board will be answered in the affirmative.

If you didn’t care whether the to-be-questioned witnesses got together and matched their stories up in advance, you wouldn’t call it an investigation, would you? You’d call it conversation. Heck, you may even call it party talk, or dinner-table chit-chat but you would not call it an “investigation.”

But you needn’t take my word for it. Black’s Law Dictionary, defines the word, investigate as follows:

To inquire into (a matter) systematically; to make (a suspect) the subject of a criminal inquiry

Legal Extortion of Employers With the FLSA

Continuing the FLSA theme from last week, today’s post is about the impact of a recent decision by the 5th Circuit in Martin v. Spring Break Productions, LLC, No. 11-30671 (5th Cir. July 24, 2012). The relevant facts of the Martin decision are very simple. Employees filed a grievance with their Union, in which they alleged that they had not been paid for all time worked. The Union investigated the claims but concluded that it could not determine whether or not the employees had worked on the days alleged. The Union and the employer entered into a settlement agreement to resolve the dispute.

The agreement recognized that “disputes remain[ed] between the parties as to the amounts that may be due.” Despite the disputes, the agreement prohibited the employees from pursuing future legal action against the employer after receiving their settlement payments. The agreement was not signed by, nor was it intended to be signed by the employees themselves but, instead, by the Union on the employees’ behalf. The agreement expressly provided that the Union had the full power and authority to enter into the settlement on the employees’ behalf.

Before the agreement was signed by the Union, the employees filed suit in California state court. The employer removed the suit to federal court. The court dismissed the claims based on the settlement agreement. The employees appealed the decision to the U.S. Court of Appeals for the Fifth Circuit, where they made two arguments with respect to the settlement agreement.

First, the employees argued that the agreement was not enforceable against them because they had not signed it and never agreed to it. The employees did not dispute that they’d received “full payment” for their claims pursuant to the agreement or that they’d cashed the checks they’d received pursuant to the agreement. The 5th Circuit quickly rejected this part of the employee’s argument and found, instead, that they were bound by the decision of its Union, which had been recognized as the exclusive representative of the bargaining unit.

Second, the employees argued that, even if the agreement was binding on them, the release that it contained was invalid because individuals may not privately settle FLSA claims. This argument was predicated on a decision by the 11th Circuit in 1982, Lynn’s Food Stores, Inc. v. United States. In that decision, the court held that FLSA claims may not be settled without the approval of the Department of Labor or a court. The dispute arose as a result of a U.S. DOL investigation and the employees, who did not speak English and who had not consulted with an attorney, did not know that the DOL had determined they were owed back wages.

The 5th Circuit held that the rationale of Lynn’s Food Stores did not apply to the facts before them. Instead, the court held, a private compromise of claims under the FLSA is permissible where there exists a bona fide dispute as to the hours worked or compensation due. In that context, a release of party’s rights under the FLSA is enforceable.

The potential impact of the Martin decision is expansive, particularly in light of the Third Circuit’s holding in Genesis Health Care (which currently is on appeal to the U.S. Supreme Court), that an FLSA collective action is not mooted when an employer pays the full amount claimed. Now, it seems that there is at least the possibility that an employer can prevent a collective action altogether if it tenders a payment to the employee pursuant to a settlement agreement, provided the amount of wages owed is a bona fide issue of dispute and that the employee is represented by counsel.

This is particularly important when an employer receives a demand letter from an employee’s lawyer, threatening suit unless the employer agrees to pay the employee an amount of allegedly unpaid wages. Previously, the employer could (and often times would) pay the employee at least some portion of the demand and the parties would memorialize their agreement in writing. The employer would then keep its proverbial fingers crossed in the hopes that the employee would not file a lawsuit seeking the remaining amount of claimed wages. If, however, the employee did later sue, the employer would not have had much hope of having the suit dismissed due to the settlement agreement. In other words, the Martin decision, at least potentially, helps to remove one way in which employees (and employees’ lawyers) use the courts as a way to exact legal extortion to receive as much money as they want to claim they are owed.

The NLRB’s New Webpage Targets Your Employees

Twitter was atwitter yesterday and today with news of the NLRB’s new webpage, titled Protected Concerted Activity. The introductory text on the page states:

The law we enforce gives employees the right to act together to try to improve their pay and working conditions or fix job-related problems, even if they aren’t in a union. If employees are fired, suspended, or otherwise penalized for taking part in protected group activity, the National Labor Relations Board will fight to restore what was unlawfully taken away.

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Talk about some great marketing! It seems pretty clear that the message is targeted to non-unionized employees. It’s also evident that the NLRB is attempting to promote itself as the defender of all things wrong in the workplace. The image of NLRB as warrior may be a bit more romantic than the image that comes to my mind but c’est la vie.

This newest online marketing campaign should not come as a surprise. The Board’s efforts to require employers to post similar information in the workplace have been stymied by the courts, so why wouldn’t it take a different avenue? And Internet-based marketing is nothing new to the Board; you may recall my previous post about the love affair between unions and social media.

To say that the NLRB is being proactive about spreading its message to the non-unionized workplace is, perhaps, a bit of an understatement. Employers should be aware of these efforts but should not turn and run. To do so would be to admit defeat and it’s far too soon for that! Remember, so far, the efforts have been unsuccessful–unionized employees make up just 7 percent of the private-sector.

The NLRB Is Laughing All the Way to the Bank

NLRB’s Acting G.C. Lafe Solomon issued his third report on social media today. (PDF).

And what a fervor it caused! What a frenzy! Twitter was all atwitter with excitement over the promise of some meaningful guidance on the interplay between the National Labor Relations Act (NLRA), and employers’ social-media policies. I think it’s safe to say that the tone around the blogosphere will slowed significantly by morning.

Why? Well, primarily because we’ve actually read the report. And, folks, the news is not good. In short G.C. Solomon has made one thing clear–if you are an employer, there is just about no way you can draft a policy that addresses employees’ off-duty use of social media that you can feel confident will not potentially run afoul of the NLRA. Or at least of Mr. Solomon’s interpretation of the NLRA.

My natural optimism prevents me from reviewing in detail the multitude of provisions that Mr. Solomon found to violate the NLRA. My fellow e-law bloggers, no doubt, will pick up my slack here. I’ll give you just one so you have a little taste. Here’s the first provision addressed in the memo that, according to Mr. Solomon, violates the NLRA :

[If you mention your employer or your employment in an online post,] don’t release confidential guest, team member orcompany information.

Yes. You heard me right. That provision was found to be overly broad in violation of the NLRA. Oh, brother. Boy, oh boy! The NLRB is just killing it, right?!? It publishes three “reports,” none of which are binding, none of which constitute precedent of any sort, and none of which have been reconciled by the smartest minds around. It could be said, in other words, that the three reports are worth a whole lot of nothing.

Yet, these three little reports arguably have caused more uproar than the last three employment-law decisions issued by the U.S. Supreme Court. They have effectively prevented numerous employers from implementing a social-media policy. They have, if nothing else, gotten our attention.

I, for one, am ready to move on. Unless and until the General Counsel publishes a report that a lawyer of average intelligence can translate into something useful, I am no longer interested. And what’s the consequence of this brazen disregard? Not much. As I’ve posted previously, the risk of having a policy that is later found to be in violation of the NLRA is that you would have to change your policy and put up a posting about the change.

In the meantime, I’ll continue to draft policies that come from the right place (i.e., education and prevention as primary goals), are only as restrictive as they need to be (i.e., no vague or overly broad language), and tie in other applicable workplace policies (e.g., anti-harassment, workplace violence, and reference requests). I’m willing to bet that I’ll be in a small group and, if that’s the case, the NLRB will be laughing the whole way to the bank.

New NLRB Memo on Social-Media Policies

Acting General Counsel to the NLRB, Lafe Solomon, issued today his third report on social media (pdf). The report addresses 7 recent cases. In 6 of the 7, Solomon determined that the employer’s social-media policy was, at least in part, in violation of the NLRA. But in one case, he determined that the social-media policy complied with the NLRA!

Rejoice all of you employers who have worried so about avoiding the scrutiny of the NLRB over social-media policies! You now have a sample to follow! The report included the policy in its entirety. Now there can be no further reason to delay drafting that social-media policy, if ever one existed in the first place.

Federal Judge Invalidates NLRB Union Election Rule

At our Annual Employment Law Seminar, we discussed the NLRB’s adoption of its so-called “quickie-election” rules, which were adopted in December 2011, following the Obama Administration’s failure to obtain passage of the “Employee Free Choice Act,” a statute designed to promote union organizing by providing for fast elections when a union files a petition for certification.

The new administrative rules are designed to speed the election process. While they are not as draconian as the proposed Employee Free Choice Act, they were intended to, and would have, cut the time from the filing of a petition to an election in half. So-called “quickie elections” favor unions because they limit the time an employer has to respond to union propaganda about the alleged benefit to employees from joining a union.

On Monday, May 14, 2012, a federal judge ruled in favor of the U.S. Chamber of Commerce’s request that the quickie elections rules be invalidated. Although a number of issues were raised in the case concerning the NLRB’s rule making power, the court ruled only on the question of whether a quorum was present when the Board adopted the rules.

The quorum issue is more complex that would appear on its face. The Board sometimes acts through “electronic” proceedings. One Board member, Brian Hayes, the Board’s sole Republican, did not take part in the December 16, 2011 NLRB electronic vote to adopt the final rule. Hayes only had a matter of hours to vote on the rule since it was posted for final action on the day it was adopted. The court ruled that since Hayes did not affirmatively take a position on the proposed rules, nor indicate that he was abstaining, there was no indication that he participated in the decision. Without his participation, the Board lacked the required quorum.

In response to the decision issued, the NLRB has suspended the implementation of the rule changes. NLRB chairman, Mark Gaston Pearce, said the Board is reviewing the Court decision but is “determined” to move forward with the rule changes adopting the “quickie election” process. In a related development, acting General Counsel, Lafe Solomon, withdrew the guidance to regional offices he issued concerning the new election procedures. As a result, the Regional offices will follow the election process and practices prior to the revised rules until further notice. Up to 150 election petitions are affected by the suspension of the quickie election rules.

Surely, this is not the end of the story. We’ll keep you posted as the law continues to evolve.