The NLRB Gives All Employers Cause For Concern

Wednesday, August 15, 2012 - 12:23

 

A newly activist National Labor Relations Board (the “NLRB” or the “Board”) has given all employers – whether or not their workplaces are unionized – reason to pay close attention to its activities. While many of its initiatives will be subject to heated challenge in the courts, employers are well advised to keep apprised of these developments.

 

NLRB’s Focus On Social Media Activities: The Latest

Several recent Administrative Law Judge (“ALJ”) decisions have addressed the legality of employer action with respect to employees’ use of social media. In Karl Knauz Motors, Inc., 2011 WL4499437 (NLRB Div. of Judges Sept. 28, 2011), an ALJ found that a car dealership did not unlawfully terminate an employee for his Facebook postings, finding that discharging the employee for posting photos of a car accident that had occurred at an adjacent dealership that was also owned by his employer did not constitute protected activity under the National Labor Relations Act (the “NLRA” or the “Act”). Nonetheless, the ALJ found that the employer’s policy was overbroad and could potentially chill protected activity because it prohibited employees from giving “unauthorized interviews” to third parties and stated (in a separate clause) that “[n]o one should be disrespectful or use profanity or any other language which injures the image or reputation of the Dealership.”

In G4S Secure Solutions (USA) Inc., 2012 WL 1065721 (NLRB Div. of Judges Mar. 29, 2012), an ALJ examined a security company’s social media policy, which provided that employees were not permitted to “comment on work-related legal matters without express permission of the Legal Department.” Although the policy included a disclaimer stating that it should not be interpreted to interfere with employees’ rights under Section 7 of the NLRA, the ALJ found that employees could reasonably interpret the prohibition to chill protected activity because the term “legal matters” was not defined in the policy.

In yet another Facebook-related ruling, an ALJ found that a retail store unlawfully terminated three employees who complained about their manager on Facebook. After the employees were admonished by the manager for closing the store early because they felt unsafe walking home at the set closing time, the employees complained about the manager on their Facebook pages. In Design Technology Group, LLC, 2012 WL 1496201 (NLRB Div. of Judges Apr. 27, 2012), the ALJ ruled that terminating the employees six days after the posts were made constituted an unfair labor practice. Notably, the ALJ also ordered that the employees be reinstated to their positions.

Further development in this emerging area of law occurred with the Board’s release of two reports focusing on social media issues. On January 25, 2012, the NLRB issued the agency’s second report (the “January Report”) regarding the interaction between the NLRA and workers’ use of social media. The January Report highlighted fourteen social media cases that had been considered by the general counsel’s office that reflected two main themes: whether social media policies are NLRA-compliant and when employee discipline based on social media postings violates the Act. The Board’s third report concerning this topic followed on May 30, 2012 (the “May Report” and, collectively with the January Report, the “Reports”), this time focusing exclusively on the social media policies of seven different employers. The Reports can be accessed through the NLRB website at https://www.nlrb.gov/publications/operations-management-memos.

The Board’s guidance draws a distinction between protected social media posts, in which employees discuss shared concerns over terms and conditions of employment, and those that amount to mere “individual gripes.” For example, in a case discussed in the January Report, an employee of a veterinary hospital was angry over the promotion of a coworker and expressed her frustration in a Facebook posting. Three coworkers who were her Facebook “friends” responded, complaining about the woman who got the promotion and the employer’s mismanagement. The Board determined that the termination of these employees violated the NLRA.

But in another situation, an employee of a home improvement store was not found to be engaged in protected activity when, upset after being reprimanded by her supervisor, she posted on Facebook using an expletive and the name of the store. Four individuals, one of them a coworker, “liked” the status, while two other individuals commented on it. A half hour later, the employee posted again and stated that the employer did not appreciate its employees. This time, no coworkers responded. The Board concluded that these Facebook postings were “merely an expression of an individual gripe” and were not protected concerted activity. The company’s decision to discharge the employee after making these comments, therefore, did not violate the NLRA. Crucial to the Board’s decision were the observations that the employee “had no particular audience in mind when she made that post, the post contained no language suggesting that she sought to initiate or induce coworkers to engage in group action, and the post did not grow out of a prior discussion about terms and conditions of employment with her coworkers.” These factors provide helpful guidance for employers considering discipline in response to employees’ social media posts. Employers should examine each situation carefully to determine if facts exist evidencing group action.

The examples in the Reports also illustrate the close scrutiny that the Board will apply to social media policies prohibiting employee discussions online. The Board has made clear that employers must avoid creating policies that may interfere with an employee’s rights under Section 7. In assessing the lawfulness of an employer policy, the NLRB considers whether (a) an employee would reasonably understand the policy to prohibit activities protected under Section 7, (b) the policy was created in response to union activity or (c) the rule is applied in a manner that restricts Section 7 rights. Policies that “contain no limiting language or context that would clarify to employees that the rule does not restrict Section 7 rights” will be deemed unlawful.

The highlight of the May Report is the inclusion of Walmart’s social media policy as a model policy that the Board found to be lawful. The May Report observes that Walmart’s policy included sufficient examples of “clearly illegal or unprotected conduct, such that they could not reasonably be construed to cover protected activity.” Thus, for example, the policy advises employees to be “respectful” and “fair and courteous” when posting comments, complaints, photos or videos online, and it specifically identifies types of prohibited posts, such as “offensive posts meant to intentionally harm someone’s reputation or 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.” Similarly, the rules protecting Walmart’s confidential information and trade secrets were not overly broad because they included language limiting the scope of protected information. When adopting or modifying a social media policy, employers are well-advised to consider the provisions of the Walmart policy, given that it now has the imprimatur of the NLRB.

In light of the NLRB’s recent reports and recent decisions, employers must be careful to ensure that their policies regarding social media activities do not impose an undue burden on employees’ theoretical Section 7 rights and consider whether and when disparaging remarks made online by an employee may be protected. When drafting social media policies, employers must keep in mind that simply prohibiting disparaging comments or unprofessional communications will run afoul of the NLRB’s strong views. As the Walmart example illustrates, however, the use of context and specific examples in a policy will likely improve its compliance with the NLRA. Further, employers should note that a disclaimer will not automatically cure an otherwise deficient policy.

Arbitration Agreements May Violate The NLRA

In a decision at odds with the strong public policies underlying the consistently pro-arbitration rulings of the United States Supreme Court, the NLRB ruled in D.R. Horton, Inc. and Michael Cuda, 357 NLRB No. 184 (Jan. 3, 2012) that employers cannot force employees to sign arbitration agreements waiving their right to bring joint, class or collective actions. Specifically, the NLRB found that an employer violates the NLRA when, as a condition of their employment, it requires employees to sign an arbitration agreement precluding them from filing class or collective claims addressing their wages, hours or other working conditions in any forum. The NLRB ruled that the arbitration agreement prohibited the exercise of substantive rights protected by the NLRA – the employees' Section 7 rights to engage in "collective activities" for "mutual aid and protection" – and that there was no conflict between the NLRA and the Federal Arbitration Act (the “FAA”) under the circumstances of the case before it. While the NLRB’s ruling seems on its face to contradict the Supreme Court’s decision in AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011), which held that the FAA prohibits states from conditioning the enforceability of certain arbitration agreements on the availability of classwide arbitration procedures, the NLRB distinguished AT&T Mobility and the Supreme Court's earlier decision in Stolt-Nielsen v. Animalfeeds Int’l Corp., 130 S. Ct. 1758 (2010), on the basis that “[n]either involved the waiver of rights protected by the NLRA or even employment agreements.” The NLRB further noted that AT&T Mobility “involved a conflict between the FAA and state law, which is governed by the Supremacy Clause, whereas the present case involves the argument that two federal statutes conflict.” D.R. Horton has appealed the NLRB’s decision to the United States Court of Appeals for the Fifth Circuit.

NLRB Posting Requirement Stayed Pending Litigation

The NRLB's new posting requirement, which would require employers to post workplace notices informing employees of their right to organize under the NLRA, has been temporarily enjoined by the United States Court of Appeals for the District of Columbia. Employers were originally expected to comply with the new rule by November 14, 2011, but the effective date has been pushed back several times due to various legal challenges. These pending lawsuits argue that the NLRB lacks statutory authority to mandate a notice posting and impose penalties for non-compliance. Due to the imposition of the stay, employers need not post the notice pending the court’s hearing of appeals regarding the posting requirement.

Board's Actions Reflect Outreach To Non-Union Employees

Each of the NLRB initiatives discussed above reflects the Board's increasing focus on reaching out to nonunionized workforces to advise them of and protect their potential Section 7 rights. Furthering these efforts, the NLRB recently unveiled a new website targeting such individuals. As with the Board's other recent actions, this “education” campaign may reasonably be expected to lead to an increase in claims asserted under the NLRA.

Kevin B. Leblang heads the Employment Law department at Kramer Levin Naftalis & Frankel LLP and concentrates exclusively on representing management on employment law litigation and advisory matters. He counsels employers on matters ranging from the adoption and application of employee relations policies to the evaluation and minimization of litigation risks of employment decisions. He also represents management clients in litigations before federal and state courts, administrative agencies and arbitrators. Mr. Leblang has extensive experience litigating claims alleging all forms of discrimination, breach of contract and the myriad of tort claims arising out of the employment relationship. He also has extensive experience advising and litigating in the rapidly growing field of employee non-competition law.

Robert N. Holtzman is a Partner at Kramer Levin Naftalis & Frankel LLP. Mr. Holtzman concentrates exclusively on representing management in employment law matters. He regularly counsels employers regarding the full range of issues that touch upon or concern the employment relationship, including investigations of discrimination and whistleblower complaints, negotiation of employment and separation agreements, non-competition agreements and other restrictive covenant issues, design and implementation of appropriate policies and practices, and advice concerning employment issues that arise in connection with corporate transactions.

Please email the authors at kleblang@kramerlevin.com or rholtzman@kramerlevin.com with questions about this article.