NLRB Rejects Employer's Attempt to Limit Rights Under the NLRA

Background

The company's new system, called “Total Solution Management (TSM),” created an internal process that began with an investigation, went to mediation and then on to a final arbitration, if necessary. It was introduced three days after an NLRB conducted an election, in which employees split 22-to-22 on the question of joining the International Brotherhood of Teamsters represent them. In the event of a tie vote, the union loses.

Nevertheless, the union filed charges with the NLRB, alleging that the new grievance policy and firings constituted unfair labor practices. The ALJ ordered Supply Technologies to discontinue its new grievance system at all four locations and to offer reinstatement to the 20 discharged employees with full back pay. Supply Technologies, LLC, and Teamsters Local 120, NLRB Case No. 18-CA-19587.)

It is well-settled that Section 7 of the NLRA protects the rights of employees to utilize the NLRB processes, including the right to file unfair labor practice charges. Any employer rule or policy that unduly interferes with or restricts that right is generally found to be unlawful. In determining if a company rule or policy, like the mandatory TSM arbitration policy in this matter, unlawfully interferes with the employee's Section 7 right to access to its processes, the Board looks first at whether the rule or policy explicitly prohibits or restricts such protected activity. If so, the rule or policy will be found to be unlawful.

If, however, the rule or policy does not explicitly restrict Section 7 activity, it may, nonetheless, still be found to be unlawful if the employees would reasonably construe the language or the rule or policy to prohibit Section 7 activity, the rule was promulgated in response to union activity or the rule has been applied to restrict the exercise of Section 7 rights. In this case, according to the ALJ, a fair reading of the TSM grievance arbitration policy did not disclose any express prohibition on an employee's right to file a charge with the Board.

The employer had argued that under the TSM policy, the employees had the unfettered right to file a charge or complaint with a government agency, such as the NLRB. However, as the ALJ noted, while the employees may have the right to file such a charge, they would also be required to waive any right to any remedial relief that they might otherwise be able to obtain ' rendering meaningless any rights the employees purportedly had to file charges with the Board or other government agencies.

The ALJ also noted other provisions in the TSM policy suggesting that the employees could not bring any governmental claims. One provision stated in clear and unambiguous terms that “the only claims” employees can bring against the respondent outside the TSM policy are “criminal claims and claims for workers' compensation or unemployment compensation benefits.”

Conspicuously missing from the list of exclusion to the TSM programs were claims that employees might wish to file with a government agency such as the NLRB. The fact that the word “only” in the above-referenced language was highlighted in boldface type, strongly suggested, according to the ALJ, that only those three types of claims were exempt or excluded from the coverage of the TSM arbitration program.

Bottom Line

Most employers would like to avoid litigation with their employees. Whenever a lawsuit is filed by an employee against a current or former employer, it almost always becomes a significant problem for the employer in terms of cost, loss of productivity and uncertainty. To avoid those problems, many employers have begun requiring their employees to use arbitration to resolve any and all employment disputes. While the use of arbitration in this manner works well for many employers, this decision should serve as a reminder that there are some claims, like those under the NLRA that cannot be corralled into arbitration, and an unwitting attempt to do so, can lead, as in this case, to further problems.

Kevin McCormick, a member of this newsletter's Board of Editors, is a Partner in the Baltimore office of Whiteford Taylor Preston, LLP. He provides advice and counsel to public and private employers on all phases of the employment relationship to ensure compliance with applicable laws, avoid costly litigation, and, when necessary, successfully defend against individual and/or governmental challenges to those employment policies and procedures.

On June 2, 2011, an NLRB Administrative Law Judge (ALJ) found that parts supplier Supply Technologies, LLC unlawfully required employees to sign up for a comprehensive grievance and arbitration system that would eliminate their rights under the NLRA ' and then discharged 20 employees when they refused to do so.

Eighteen of the discharged employees were Hmong refugees and two were Spanish-speaking immigrants, all employed at the Ohio-based company's Minneapolis warehouse. Four testified at the administrative law hearing that they did not fully understand the documents explaining the new system and were concerned that they were signing away rights. All four said that they were escorted out of the building and were told to leave immediately after they refused to sign the documents.

In his decision, the ALJ found that the documents describing the program were confusing and inconsistent ' at one point, making patently clear that the only claims expressly exempt from the company's procedure are those involving workers' compensation claims, unemployment claims and criminal claims; and, at another point, assuring employees that they could file other claims with government agencies, but that they would waive any rights to remedies that might result for these claims.

Background

The company's new system, called “Total Solution Management (TSM),” created an internal process that began with an investigation, went to mediation and then on to a final arbitration, if necessary. It was introduced three days after an NLRB conducted an election, in which employees split 22-to-22 on the question of joining the International Brotherhood of Teamsters represent them. In the event of a tie vote, the union loses.

Nevertheless, the union filed charges with the NLRB, alleging that the new grievance policy and firings constituted unfair labor practices. The ALJ ordered Supply Technologies to discontinue its new grievance system at all four locations and to offer reinstatement to the 20 discharged employees with full back pay. Supply Technologies, LLC, and Teamsters Local 120, NLRB Case No. 18-CA-19587.)

It is well-settled that Section 7 of the NLRA protects the rights of employees to utilize the NLRB processes, including the right to file unfair labor practice charges. Any employer rule or policy that unduly interferes with or restricts that right is generally found to be unlawful. In determining if a company rule or policy, like the mandatory TSM arbitration policy in this matter, unlawfully interferes with the employee's Section 7 right to access to its processes, the Board looks first at whether the rule or policy explicitly prohibits or restricts such protected activity. If so, the rule or policy will be found to be unlawful.

If, however, the rule or policy does not explicitly restrict Section 7 activity, it may, nonetheless, still be found to be unlawful if the employees would reasonably construe the language or the rule or policy to prohibit Section 7 activity, the rule was promulgated in response to union activity or the rule has been applied to restrict the exercise of Section 7 rights. In this case, according to the ALJ, a fair reading of the TSM grievance arbitration policy did not disclose any express prohibition on an employee's right to file a charge with the Board.

The employer had argued that under the TSM policy, the employees had the unfettered right to file a charge or complaint with a government agency, such as the NLRB. However, as the ALJ noted, while the employees may have the right to file such a charge, they would also be required to waive any right to any remedial relief that they might otherwise be able to obtain ' rendering meaningless any rights the employees purportedly had to file charges with the Board or other government agencies.

The ALJ also noted other provisions in the TSM policy suggesting that the employees could not bring any governmental claims. One provision stated in clear and unambiguous terms that “the only claims” employees can bring against the respondent outside the TSM policy are “criminal claims and claims for workers' compensation or unemployment compensation benefits.”

Conspicuously missing from the list of exclusion to the TSM programs were claims that employees might wish to file with a government agency such as the NLRB. The fact that the word “only” in the above-referenced language was highlighted in boldface type, strongly suggested, according to the ALJ, that only those three types of claims were exempt or excluded from the coverage of the TSM arbitration program.

Bottom Line

Most employers would like to avoid litigation with their employees. Whenever a lawsuit is filed by an employee against a current or former employer, it almost always becomes a significant problem for the employer in terms of cost, loss of productivity and uncertainty. To avoid those problems, many employers have begun requiring their employees to use arbitration to resolve any and all employment disputes. While the use of arbitration in this manner works well for many employers, this decision should serve as a reminder that there are some claims, like those under the NLRA that cannot be corralled into arbitration, and an unwitting attempt to do so, can lead, as in this case, to further problems.

Kevin McCormick, a member of this newsletter's Board of Editors, is a Partner in the Baltimore office of Whiteford Taylor Preston, LLP. He provides advice and counsel to public and private employers on all phases of the employment relationship to ensure compliance with applicable laws, avoid costly litigation, and, when necessary, successfully defend against individual and/or governmental challenges to those employment policies and procedures.