Claims of Protected Concerted Activity

Background Facts

Parexel International, LLC, performs research studies for pharmaceutical companies at its Baltimore, MD, facility. Parexel employed a number of employees from South Africa. Theresa Neuschafer, who was not from South Africa, worked as a licensed practical nurse on one of Parexel's teams.

In July 2006, Neuschafer had conversations with another employee at the nurses' station. Neuschafer asked John Van der Merwe, who had left Parexel's employ in June 2006 only to return a month later, if he had been given a raise upon his return.

In response, Van der Merwe told Neuschafer untruthfully that he had received a raise and was now the shift supervisor. Neuschafer then asked if Van der Merwe's wife, who had left Parexel's employ, would also be returning with a raise. Van der Merwe replied, “absolutely, we're clever people and the Clinical Operations Manager is going to look after us.” Both Van der Merwe and Liz Jones, the Clinical Operations Manager, were South African.

A day or two later, Neuschafer told her immediate supervisor about her conversations with Van der Merwe. Neuschafer said that Van der Merwe had come back with a raise and his wife would be coming back with a raise and that she thought the whole unit should quit and come back with a raise. Neuschafer also told her immediate supervisor that all the South African employees socialized together and that Jones, the Manager of Clinical Operations, a fellow South African, was going to look after them.

On Aug. 4, 2006, Liz Jones and a Human Resources consultant summoned Neuschafer to discuss her conversations with Van der Merwe. Jones was concerned about a “rumor,” which she believed originated with Neuschafer, that South African employees were receiving favored treatment and “taking over.” At that meeting, Neuschafer recounted the substance of her discussions with Van der Merwe. She also stated her belief that Parexel was paying South Africans higher wages than the other employees, and that Jones was going to continue favoring the South Africans in that manner.

Neuschafer was asked if she had discussed her concerns with anyone other than her immediate supervisor and Neuschafer stated that she had not. On Aug. 10, 2006, Neuschafer was discharged.

The ALJ Decision

Following an investigation, the National Labor Relations Board (NLRB) issued a complaint against Parexel alleging that it had violated Section 8(a)(1) of the NLRA by firing Neuschafer for engaging in protected concerted activity. Following a lengthy hearing, the ALJ found no violation of the Act. According to the ALJ, Neuschafer's conversations concerned terms and conditions of employment, specifically wages and discrimination in the setting of wages, so that if her conversations had been “concerted activity,” they would have been statutorily protected.

The ALJ also found that Parexel terminated Neuschafer in part to prevent her from discussing those matters with other employees. However, while describing Neuschafer's discharge as a “preemptive strike,” the ALJ held that there was an insufficient basis under current Board law to conclude that her conversations were concerted activity. As a result, the ALJ dismissed the complaint.

The NLRB Decision

In considering this issue on appeal, the NLRB majority Board reversed the ALJ, finding that the NLRA and prior Board precedent support a finding that Neuschafer's discharge violated the NLRA regardless of whether the initial conversations were themselves concerted activity. According to the Board majority, Section 8(a)(1) of the NLRA makes it an unfair labor practice for an employer to interfere with, restrain or coerce employees in the exercise of rights guaranteed under the NLRA. Among those is the right to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection. The Board has long held that employees have the right to ascertain what wages are paid by their employer, as wages are a vital term and condition of employment.

As a result, the Board has in the past found that it was improper for an employer to maintain a policy prohibiting employees from discussing their wages, even if no employee has engaged in protected concerted activity or been disciplined for violating the policy. According to the Board majority, if the maintenance of such a rule violates the NLRA, then the discharge of an employee to prevent her from engaging in such conduct also constitutes the violation of the NLRA.

The Board majority then considered and rejected the ALJ's finding that when she was discharged, Neuschafer had not yet engaged in any protected concerted activity or discussed her concerns with other employees. The Board majority summarily rejected that concern, finding that if an employer acts to prevent concerted protected activity to “nip it in the bud,” that action interferes with and restrains the exercise of the employee's rights under the NLRA.

According to the Board majority, such a finding is consistent with prior Board precedent holding that under certain circumstances employees who have not engaged in any concerted activity are still protected from adverse employer action. For example, any adverse action taken against an employee based on the employer's belief that the employee had engaged in protected concerted activity is unlawful, even if the employer's belief was mistaken and the employee did not, in fact, engage in such activity.

As the Board majority sees it: What is critical is not what the employee did, but, rather, the employer's intent to suppress protected concerted activity. Here, the Board majority concluded that Parexel had violated the NLRA because it summarily terminated Neuschafer to prevent her from engaging in concerted activity.

One Board member dissented from the majority decision on the grounds that the majority should not have considered the issue of whether a preemptive firing could constitute a violation of the NLRA where there was no actual concerted activity because it had not been raised during the administrative trial. During the ALJ trial, the issue was whether Neuschafer was engaged in concerted activity, with or on the authority of other employees and not solely on her own behalf. Since the ALJ found that Neuschafer's conversations were not for mutual aid and protection, they were not concerted and therefore not illegal under the NLRA.

Bottom Line

This decision announces yet another dramatic change in existing NLRB law. As many have suspected, the new Board majority is wasting little time in rewriting the NLRA to better suit its own perspectives and advance the intents of employers and organized labor. In this case, there was no evidence to suggest that Neuschafer had engaged in protected concerted activity, as that concept had been previously recognized by the NLRB. In fact, the ALJ found no violation based precisely on the fact that Neuschafer had not yet satisfied this essential element of her claim.

On appeal, however, the NLRB found that despite those factual findings, a violation occurred ' even if it was based on a theory that was never advanced during the trial below. No doubt this decision has made it much more difficult for employers to manage their employees and conform to the NLRA. It has also made it much easier for disgruntled employees and unions to protect and advance their own interests.

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.

Early last year, the National Labor Relations Board (NLRB) reversed the findings of an ALJ and found that a Maryland research firm violated Section 8(a)(1) of the National Labor Relations Act (NLRA) by firing an employee as a “preemptive strike” to prevent the employee from discussing certain wage complaints ' even though the ALJ had found, as fact, that the employee had not actually engaged in protected concerted activity at the time of her discharge. Parexel International, LLC, and Theresa Neuschafer, Case No. 5-CA-33245, NLRB decided Jan. 28, 2011.

Under the NLRA, employees, even those not covered by collective bargaining agreements, have the right to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection. Until this decision, it was generally believed that in order to support an unfair labor practice charge, the employee needed to engage in concerted activity, i.e., that the employee consulted with other employees about the issue and then the employer disciplined or discharged the employee for engaging in that concerted activity.

In this case, even though there was no evidence that the employee had discussed the particular wage issue with other employees, the Board nevertheless found violation because of its belief that the employer had terminated the employee solely to prevent that person from engaging in the concerted activity.

Background Facts

Parexel International, LLC, performs research studies for pharmaceutical companies at its Baltimore, MD, facility. Parexel employed a number of employees from South Africa. Theresa Neuschafer, who was not from South Africa, worked as a licensed practical nurse on one of Parexel's teams.

In July 2006, Neuschafer had conversations with another employee at the nurses' station. Neuschafer asked John Van der Merwe, who had left Parexel's employ in June 2006 only to return a month later, if he had been given a raise upon his return.

In response, Van der Merwe told Neuschafer untruthfully that he had received a raise and was now the shift supervisor. Neuschafer then asked if Van der Merwe's wife, who had left Parexel's employ, would also be returning with a raise. Van der Merwe replied, “absolutely, we're clever people and the Clinical Operations Manager is going to look after us.” Both Van der Merwe and Liz Jones, the Clinical Operations Manager, were South African.

A day or two later, Neuschafer told her immediate supervisor about her conversations with Van der Merwe. Neuschafer said that Van der Merwe had come back with a raise and his wife would be coming back with a raise and that she thought the whole unit should quit and come back with a raise. Neuschafer also told her immediate supervisor that all the South African employees socialized together and that Jones, the Manager of Clinical Operations, a fellow South African, was going to look after them.

On Aug. 4, 2006, Liz Jones and a Human Resources consultant summoned Neuschafer to discuss her conversations with Van der Merwe. Jones was concerned about a “rumor,” which she believed originated with Neuschafer, that South African employees were receiving favored treatment and “taking over.” At that meeting, Neuschafer recounted the substance of her discussions with Van der Merwe. She also stated her belief that Parexel was paying South Africans higher wages than the other employees, and that Jones was going to continue favoring the South Africans in that manner.

Neuschafer was asked if she had discussed her concerns with anyone other than her immediate supervisor and Neuschafer stated that she had not. On Aug. 10, 2006, Neuschafer was discharged.

The ALJ Decision

Following an investigation, the National Labor Relations Board (NLRB) issued a complaint against Parexel alleging that it had violated Section 8(a)(1) of the NLRA by firing Neuschafer for engaging in protected concerted activity. Following a lengthy hearing, the ALJ found no violation of the Act. According to the ALJ, Neuschafer's conversations concerned terms and conditions of employment, specifically wages and discrimination in the setting of wages, so that if her conversations had been “concerted activity,” they would have been statutorily protected.

The ALJ also found that Parexel terminated Neuschafer in part to prevent her from discussing those matters with other employees. However, while describing Neuschafer's discharge as a “preemptive strike,” the ALJ held that there was an insufficient basis under current Board law to conclude that her conversations were concerted activity. As a result, the ALJ dismissed the complaint.

The NLRB Decision

In considering this issue on appeal, the NLRB majority Board reversed the ALJ, finding that the NLRA and prior Board precedent support a finding that Neuschafer's discharge violated the NLRA regardless of whether the initial conversations were themselves concerted activity. According to the Board majority, Section 8(a)(1) of the NLRA makes it an unfair labor practice for an employer to interfere with, restrain or coerce employees in the exercise of rights guaranteed under the NLRA. Among those is the right to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection. The Board has long held that employees have the right to ascertain what wages are paid by their employer, as wages are a vital term and condition of employment.

As a result, the Board has in the past found that it was improper for an employer to maintain a policy prohibiting employees from discussing their wages, even if no employee has engaged in protected concerted activity or been disciplined for violating the policy. According to the Board majority, if the maintenance of such a rule violates the NLRA, then the discharge of an employee to prevent her from engaging in such conduct also constitutes the violation of the NLRA.

The Board majority then considered and rejected the ALJ's finding that when she was discharged, Neuschafer had not yet engaged in any protected concerted activity or discussed her concerns with other employees. The Board majority summarily rejected that concern, finding that if an employer acts to prevent concerted protected activity to “nip it in the bud,” that action interferes with and restrains the exercise of the employee's rights under the NLRA.

According to the Board majority, such a finding is consistent with prior Board precedent holding that under certain circumstances employees who have not engaged in any concerted activity are still protected from adverse employer action. For example, any adverse action taken against an employee based on the employer's belief that the employee had engaged in protected concerted activity is unlawful, even if the employer's belief was mistaken and the employee did not, in fact, engage in such activity.

As the Board majority sees it: What is critical is not what the employee did, but, rather, the employer's intent to suppress protected concerted activity. Here, the Board majority concluded that Parexel had violated the NLRA because it summarily terminated Neuschafer to prevent her from engaging in concerted activity.

One Board member dissented from the majority decision on the grounds that the majority should not have considered the issue of whether a preemptive firing could constitute a violation of the NLRA where there was no actual concerted activity because it had not been raised during the administrative trial. During the ALJ trial, the issue was whether Neuschafer was engaged in concerted activity, with or on the authority of other employees and not solely on her own behalf. Since the ALJ found that Neuschafer's conversations were not for mutual aid and protection, they were not concerted and therefore not illegal under the NLRA.

Bottom Line

This decision announces yet another dramatic change in existing NLRB law. As many have suspected, the new Board majority is wasting little time in rewriting the NLRA to better suit its own perspectives and advance the intents of employers and organized labor. In this case, there was no evidence to suggest that Neuschafer had engaged in protected concerted activity, as that concept had been previously recognized by the NLRB. In fact, the ALJ found no violation based precisely on the fact that Neuschafer had not yet satisfied this essential element of her claim.

On appeal, however, the NLRB found that despite those factual findings, a violation occurred ' even if it was based on a theory that was never advanced during the trial below. No doubt this decision has made it much more difficult for employers to manage their employees and conform to the NLRA. It has also made it much easier for disgruntled employees and unions to protect and advance their own interests.

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.