The contents of these slides should not be construed as legal advice or a legal opinion on any specific fact or circumstance. The slides are intended for general purposes only, and you are urged to consult a lawyer concerning your own situation and any specific legal questions you may have. © Neal, Gerber & Eisenberg LLP 2012

THE NLRB HAS LOST ITS WAY:

WHAT’S AN EMPLOYER TO DO?December 5, 2012

Howard L. Bernstein Sonya RosenbergNeal, Gerber & Eisenberg LLPNeal, Gerber & Eisenberg LLP2 North LaSalle Street, Suite 1700 2 North LaSalle Street, Suite 1700Chicago, Illinois 60602 Chicago, Illinois 60602312/269-8447 312/827-1076 hbernstein@ngelaw.com srosenberg@ngelaw.com

Purpose of the Program

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Update on recent significant developments at the NLRB.

Discussion of NLRB decisions and the impact on employers.– Social Media Policies– Confidentiality of Investigations– Employment-At-Will Statements– Limiting Off Duty Access to Company Property– Regulating Other Employee Behavior

Purpose of the Program (Continued)

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Other NLRB actions and initiatives.– Notice Posting– “Quickie” Elections– Smaller Bargaining Units– New NLRB Website Targeting Union-Free Employees

A glimpse into the future.

The Starting Point

Section 7 of the National Labor Relations Act

Employees have the right to self-organization, to form,

join, or assist labor organizations, to bargain collectively

through representatives of their own choosing, and to

engage in other concerted activities for the purpose of

collective bargaining or other mutual aid or protection,

and shall also have the right to refrain from any or all

such activities.

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“Concerted Activity”

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Undertaken by two or more employees. Undertaken by one employee on behalf of others. Undertaken by one employee to enforce rights

under a Union contract. Undertaken by one employee to attempt tp enlist

support of others.

“Mutual Aid and Protection”

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More Money Better Benefits Safe Workplace Job Security Prevent Discrimination Other terms or conditions of employment

Examples of Protected Concerted Activity

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Discussing terms and conditions of employment. Soliciting others to join in action. Distributing materials. Engaging in a work stoppage, refusal of overtime,

even engaging in a strike. Complaining – even to outsiders – about the

company, its managers and supervisors, or about working conditions.

Balancing of Protected Concerted Activity with Legitimate Business Interests

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Interference with work. Interference with employer’s legitimate interest. Protection of employer’s property interests.

“Has the NLRB lost its balance?”

Recently, the NLRB General Counsel (Chief Prosecutor) and

the NLRB have set out on a Mission to tip the balance

heavily in favor of employees and against employers

regarding Section 7 rights.

It’s weapon – a critical review of virtually every employers

rule or policy, including the most common, most long-

standing policies.

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The Key Inquiry

Will employees reasonably construe the rule or policy to prohibit Section 7 conduct?

Will the rule or policy reasonably tend to

“chill” employees in the exercise of their

Section 7 rights?

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How does the NLRB Decide is the Rule is Lawful?

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Does the rule explicitly (on its face) restrict Section 7 rights?

Unlawfully broad no solicitation / no distribution rule.

Ban on wearing Union buttons. Rule prohibiting employees from discussing

wages.

If not (if the rule is ambiguous or subject to several

interpretations), then a violation depends on a showing that:

A. A showing that the rule was promulgated in response to Union activity, or

B. The rule has been applied to restrict Section 7 rights , or

C. Employees would reasonably construe the language to prohibit Section 7 activity.

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Social media and the NLRB

Social media sites = modern-day water coolers Employers have responded with:

a) Nothing

b) Implementation of social media policies and practices

c) Disciplining employees for inappropriate posts

The NLRB has emerged as the unlikely lead player in shaping the developing law in the social media realm.

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NLRB’s Basic Take on Social Media

In the recent years, the Board has issued a number of complaints, memoranda, reports, and decisions relating to social media sites.

Common Theme:– The NLRB will strike down employers’ social media-

related policies and/or disciplinary actions that it deems to impede or chill employees’ Section 7 rights.

– Let’s look at some recent examples.

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Costco Wholesale Corp.(Sept. 7, 2012)

In its employee handbook, Costco had an “Electronic Communications and Technology Policy” which stated:

“Employees should be aware that statements posted electronically (such as online message boards or discussion groups) 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.”

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Costco Wholesale Corp. (cont.)

The Board held Costco’s policy to be unlawful, on reasoning that employees could reasonably construe it to prohibit NLRA-protected activities:– The policy’s broad prohibition against making “damaging statements”

“clearly” encompassed concerted communications protesting treatment of employees.

– Nothing suggested that Section 7-protected communications were excluded from the policy.

– As phrased, the policy had a reasonable tendency to inhibit employees’ protected concerted activities.

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Karl Knauz Motors Inc. (Sept. 28, 2012)

Robert Becker, a salesman at Knauz BMW, posted pictures and comments about a car accident at a dealership owned by Knauz BMW.

The accident resulted from a customer letting his 13-year-old son sit in the driver’s seat. The teen stepped on the gas pedal and drove the car down an embankment into a pond.

Becker posted pictures of the accident on his Facebook page, with thse comments:

– “This is your car: This is your car on drugs.”

– “The kid drives over his father’s foot and into the pond in all of about 4 seconds and destroys a $50,000 truck. OOPS!”

Becker was terminated.

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Karl Knauz Motors Inc.

Knauz BMW maintained a “courtesy rule” in its employee handbook, which stated:

“Courtesy is the responsibility of every employee. Everyone is expected to be courteous, polite and friendly to our customers, vendors and suppliers, as well as to their fellow employees. No one should be disrespectful or use profanity or any other language which injures the image or reputation of the Dealership.”

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Karl Knauz Motors Inc. (cont.)

The NLRB deemed this rule unlawful, on reasoning that:

– Employees could reasonably construe the rule’s prohibitions as encompassing Section 7 activity.

– Employees would reasonably assume that Knauz BMW would regard statements of protest or criticism as rule violations.

– Nothing in the rule (or elsewhere in the handbook) could reasonably suggest that protected communications are excluded.

Note: The NLRB reasoned that had the Company only encouraged employees to be courteous, the rule would have been deemed lawful. But, the NLRB deemed that the rule went beyond “the positive aspirational language” to affirmatively, inappropriately proscribing messages and communications potentially critical of the Company.

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Karl Knauz Motors Inc. (cont.)

Interestingly, the NLRB held that Becker’s termination did not violate the NLRA:

– Becker was discharged solely because of his postings about the car accident.

– These postings were “obviously” unprotected, as they did not involve any discussion of terms or conditions of employment.

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Dish Network (November 14, 2012)

Dish Network’s Social Media Policy provided:

“You may not make disparaging or defamatory comments about DISH Network, its employees, officers, directors, vendors, customers, partners, affiliates or our, or their, products/services. … Unless you are specifically authorized to do so, you may not participate in these activities with DISH Network resources and/or on Company time …”

The ALJ held this policy to be in violation of the NLRA because prohibitions against “disparaging or defamatory comments” and ban of such social media discussions during “Company time” could be reasonably interpreted to interfere with Section 7 activities.

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Employer-Conducted Investigations

In another recent, controversial decision – Banner Health System (July 30, 2012) – the NLRB weighed in on employer-conducted investigations, specifically whether employers may require that interviewed employees maintain confidentiality of the matter(s) being investigated.

The NLRB held that employers may not maintain such a requirement, absent a legitimate business justification that would outweigh the employees’ right to engage in protected activities.

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Banner Health System (cont.)

Banner Health System’s HR consultant routinely asked employees not to discuss a matter that was being investigated with other employees while the investigation was ongoing.

The NLRB held that such a generalized, blanket confidentiality rule was outweighed by the employees’ NLRA rights.

A different result may be reached in certain other, specific situations, e.g., where: an investigation witness requires protection, evidence is in danger of being destroyed, or there is a danger of fabrication.

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Top 3 Investigation Tips

1. Avoid knee-jerk reactions (including as to negative or seemingly inappropriate employee postings on social media sites).

2. Conduct a prompt and thorough investigation, being cognizant of any confidentiality-related considerations and instructions.

3. Above all, approach each situation thoughtfully and on its individual facts.

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Employee-At-Will Statements

Example

“Your employment with the XYZ Company is “At Will” and can be terminated either by you or the company at any time for any reason., with or without notice. Nothing in this handbook (or offer letter) is intended to create any employment contract or to guarantee employment for any term. No company officer, agent, supervisor or manager can change the employment at will relationship. By accepting employment and by signing a copy of this handbook (offer letter) you agree that your employment is at will.”

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UNLAWFUL

1. Not unlawful on its face, BUT

2. Unlawful because employees could reasonably construe the language to prohibit the Section 7 activity – collective bargaining – which changes the “at will” relationship to a contractual relationship and because the acknowledge-ment can be construed by the employee as a waiver of that right.

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Result

At-Will statements may still be lawful if carefully drafted so that employees cannot “reasonably construe” the statement or the acknowledgement as a waiver of their right to engage in collective bargaining.

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Limiting Off Duty Employee Access

Can an employer lawfully prohibit employees who are off duty from returning to the workplace?

“An employee is not to enter the facility or remain anywhere on Company property, including parking lots, cafeteria, break rooms, or locker rooms, unless the employee is on duty or scheduled to work.”

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OLD APPROACH

1. Limits access solely with respect to the interior of the facility and other working areas.

2. Doesn’t limit access to non-work areas such as parking lots, break rooms, lock rooms, etc. unless there is a legitimate business reason for limiting access to those areas.

3. Applies to off duty employees seeking access to the facility for any reason and not just employees engaging in union activity.

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NEW TWIST ON THE OLD APPROACH

Ban all access to working areas for any purpose.

OR

Permit access to working areas for all purposes (except for narrowing drawn specific expectations for special circumstances not subject to employer discretion).

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Regulating Other Employee Behavior

Rule against “refusal to follow reasonable work directive or undermining the Company, management or employees.”

Found unlawful. Could be reasonably constructed to prohibit Section 7 activity – disagreeing with management and encouraging other employees to disagree.

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Rule against walking off the job or leaving the plant without permission.

Rule against engaging in or participating in any interruption of work.

Found Unlawful. Section 7 rights include the right to engage in a work stoppage or strike (absent a no strike clause in a union contract)

Board concluded that employees would reasonably interpret these rules to prohibit strikes and work stoppages.

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What’s an Employer to Do?

1. Review your handbook and polices.

2. Revise or eliminate rules that clearly prohibit or interfere with Section 7 rights.

3. Revise rules that could reasonably be construed to interfere with Section 7 rights – if you can.

4. Add specific disclaimers, but …

5. But, don’t panic – assess the risk of non-compliance with the difficulty of compliance.

6. Wait and watch.33

Some Recent Changes in NLRB Rules and Procedures That Will Impact Union Organizing Drives

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Notice Posting “Quickie” Elections Smaller Bargaining Units New NLRB Website Targeted at Unorganized

Employees

Notice Posting – Starting April 30, 2012 (Postponed)

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1. Eliminates Most Disputes Over Voter Eligibility Until After Election.

2. Almost No Right To Pre-Election Hearing.

3. Decisions Made By Regional Director With Almost No Review By NLRB.

“Quickie Elections” New NLRB Rules Effective April 30, 2012 (Postponed)

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RESULT = Elections in 25 Days Or Less From Date Petition Is Filed

Little Time To Learn About Activity, Learn About Union, or Educate Employees.

“Quickie Elections”

And It Gets Worse!

NLRB decision in Specialty Healthcare and Rehabilitation, 357 NLRB No. 83

The petitioned for unit is always “an appropriate unit” of the employees in that unit share a community of interest.

If the other party argues for a broader unit, that party has the burden of showing an overwhelming community of interest among the groups.

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The New NLRB Website

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www.nlrb.gov/concerted-activity

Gives “typical” (?) examples of “protected concerted activity”

– Employee fired after raising safety concerns.

– Employees fired after writing letters protesting wage cuts

– Employee fired for discussing her wages with another employee

– Employees fired for walking off the job to protest a new employer policy.

– Employee fired for Facebook posting criticizing her superior.

Encourages employees to contact the NLRB.

A Glimpse into the Next Four Years

What should employers expect to see?– Under the second Obama administration,

expect to see a strong, government-sanctioned commitment to supporting employees, including through new legislation and aggressive enforcement and liberal interpretation of labor and employment laws.

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Federal Agencies – NLRB and EEOC

NLRB– Will continue to maintain a broad, expansive view and interpretation

of employees’ Section 7 rights.– Increased scrutiny of employer policies.– Continued initiatives to make it easier for workers to organize.

EEOC– Hiring policies and hiring / recruitment-related discrimination.– Protecting immigrant workers.– Addressing “emerging issues” (AADA, LGBT coverage under Title

VII, pregnancy).– More focus on retaliation.– More focus on harassment.

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Federal Agencies (cont.) – DOL

Wage and Hour Division:

– Increased focus on employee misclassification.

• “Right to Know” regulations: employee v. independent contractor classifications

– “Plan, Prevent, Protect” regulatory actions to require employers to develop programs to address employment law compliance issues.

– Increased monetary penalties for noncompliance.

OFCCP

– Increased emphasis on affirmative action.

– Potential rule changes.

– More aggressive audits.

OSHA– Increased emphasis on employee safety.

– Proposal to require injury and illness prevention programs.

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Other Issues

Immigration:– Revive immigration reform.

– Increased workplace enforcement efforts and audits.

Health Care:– Patient Protection and Affordable Care Act.

– Expect regulations to implement the law.

– Employers must ensure compliance with law.

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Questions - Discussion

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