The NLRB's New Focus: Non-Union Employers

Breathing New Life into an Old Doctrine

Put simply, the doctrine of concerted protected activity extends protection to all employees (union or non-union) who band together “for mutual aid or protection,” typically by expressing shared concerns over common employment terms and conditions. To illustrate this concept, the Board has long relied upon the image of employees gathered around the proverbial water cooler to engage in discourse over matters pertaining to wages or benefits.

Granted, Congress could never have fathomed the advent of social media outlets such as Facebook at the time of Section 7's enactment. By approaching social media as “the water cooler of the 21st century,” the Board has managed to breathe new life into old doctrine, reaffirming its own relevance in the process. Because virtually every employee handbook purports to restrict employee use of social media on (as well as off) duty, the Board has a ready vehicle at its disposal to scrutinize policy for the possibility of impermissible encroachment on this doctrine.

Social media offers just one (albeit high-profile) example of the Board's attempt at self-renewal. Other handbook policies under increased agency scrutiny include confidentiality provisions, at-will disclaimers, and access rules. The remainder of this article reviews these developments from a legal perspective, and offers some practical insights into their implications for workplace policies going forward.

The Tenuous Position of the Current Board

Six months into its second tumultuous year, the current Board has seen its share of controversy already. Typically comprised of five members appointed to five-year terms, the Board is presently operating with a narrow quorum of three Democratic members. Two of those members are serving recess appointments that were initially conferred in January 2012 and expire with the end of the current Senate term, while the third (Chairman Pearce) occupies a standing position that is scheduled to expire on Aug. 27 of this year.

The legitimacy of the Board's quorum (and by extension its legal authority to act) has been called into question by virtue of the nature of the recess appointments, both of which were made during a pro-forma intra session of Congress (i.e., while Congress technically remained in session and was not in formal recess). This challenge came to fruition with the recent decision of the D.C. Circuit Court of Appeals in Noel Canning v. NLRB, 705 F. 3d 490, which struck down the Board's authority to act for want of a lawful quorum. That decision is now before the U.S. Supreme Court on a petition for certiorari that, if granted, has broad ramifications for hundreds of other decisions issued by the Board over the past 18 months alone.

Even if the petition is granted, it will likely be months before the case is argued, let alone decided. In the meantime, the Board has made clear that it intends to continue operating on a “business as usual” basis. Operating parallel to judicial review is the political process, through which the Administration has referred a package of five candidates (consisting of the three current members and two Republican nominees) to Congress for advice and consent. It remains to be seen whether agreement can be reached on a slate of candidates prior to the expiration of Chairman Pearce's term this summer, the absence of which would effectively shut down the agency for all practical purposes.

A Look Back on the Current Board's Body of Work in 2012

The NLRB demonstrated an increased interest in regulating the non-union workplace this past year. Indeed, 2012 was a particularly busy one for the Board, seeing the issuance of a slew of decisions expanding and redefining the concept of concerted protected activity. Nowhere was that development felt more profoundly than in the realm of social media.

With a trio of decisions in 2012, the Board staked new ground for Section 7. In Costco Wholesale Corp., 358 NLRB No. 106, the Board invalidated an electronic posting policy prohibiting any posts that damaged the company, its reputation, or defamed any individual, as an overly broad restriction on Section 7 rights.

From there, the NLRB issued its decision in Karl Knauz Motors, 358 NLRB No. 164, striking down the employer's “courtesy rule” as overbroad on the basis that employees could reasonably construe it as encompassing concerted protected activity. As the year drew to a close, the Board rendered its decision in Hispanics United, 359 NLRB No. 37, which examined the termination of five employees for making critical comments about one of their co-workers, concluding that those discharges violated Section 8(a)(1).

While its focus on social media captured the public's attention, the Board was also busy reevaluating the rights of employers within the context of internal investigations. In Banner Health System, 358 NLRB No. 93, an employer was found to have illegally interfered with Section 7 rights by applying a blanket policy prohibiting employees from discussing internal complaints while they remained under investigation. To justify such restrictions, the Board emphasized that an employer must demonstrate a legitimate business justification outweighing employee Section 7 rights. Calling for an individualized assessment, the NLRB noted that a generalized concern over protecting the integrity of workplace investigations is insufficient.

The Board's Division of Advice subsequently published guidance that seemingly offered a safe harbor for employers under these circumstances, through its memo in Verso Paper, Case No. 30-CA-089350 (1/29/13). Specifically, the Division noted that overly broad confidentiality language would have been deemed acceptable had it contained the following provision:

[The Company] may decide in some circumstances that in order to achieve these objectives, we must maintain the investigation and our role in it in strict confidence. If [the Company] reasonably imposes such a requirement and we do not maintain such confidentiality, we may be subject to disciplinary action up to and including immediate termination.

In FlexFrac Logistics LLC, 358 NLRB No. 127, the Board invalidated a confidentiality provision on the basis that it unlawfully infringed upon Section 7 rights, to the extent that it could cause employees to reasonably believe they were prohibited from discussing wages or other employment terms. The fact that the restriction in this case only purported to prohibit external disclosure did not alter the Board's analysis, noting that the rule could still be construed to prohibit disclosure to union representatives.

Extending its concerted protected activity doctrine beyond the realm of social media and confidentiality, the NLRB made a foray into off-duty premises access rules with a pair of decisions issued last year. In Sodexo America, 358 NLRB No. 79, the Board found a hospital in violation of Section 8(a)(1) by maintaining a rule limiting off-duty access to certain specified purposes, such as patient visits, medical treatment, or hospital business.

That was followed by the Board's decision in Marriott International, 359 NLRB No. 8, which invalidated a rule prohibiting access more than 15 minutes before or after a scheduled shift, except in unspecified circumstances subject to prior approval. In both cases, the Board took issue with the presence of managerial discretion, noting that it had a tendency to “chill” employees in the exercise of section 7 rights, and that such rules could force employees to disclose their true intentions to management in advance. Consequently, the Board now takes the position that to be deemed acceptable, such rules must be stated in simple “all or nothing” terms (i.e., no off-duty access under any circumstances) so as to remove the specter of management discretion or advance approval.

Even well-established handbook provisions, such as at-will disclaimers, drew the Board's scrutiny. Proceedings advanced in a pair of NLRB cases suggested that the agency was now carefully scrutinizing these policies. Neither American Red Cross, Case No. 28-CA-23443 nor Hyatt Hotels Corp., Case No. 28-CA-061114 made their way up to the Board, as the former was the result of an ALJ's decision, and the latter the product of settlement. Both cases, however, made abundantly clear that employers were at risk to the extent they promulgated acknowledgement forms confirming that at-will status may not be altered (in the latter case, without signed authorization) in any way.

These cases gave rise to a fair amount of media scrutiny, ultimately leading the agency to direct all at-will cases to the Division of Advice for consideration by the Board's General Counsel. Shortly thereafter, the General Counsel issued a pair of advice memos (MiMi's Caf', Case No. 28-CA-084365, and Rocha Transportation, Case No. 32-CA-086799), distinguishing the decision in American Red Cross and finding no violation. Crucial to this analysis was the determination that neither policy purported to restrict the right of employees to alter their at-will status through the selection of a collective bargaining representative.

To the contrary, the policies merely emphasized either that employer representatives were not authorized to modify at-will status, or that modification authority was vested in the corporate president only. Had either policy effectively ruled out modification of at-will status completely, then presumably the General Counsel would have found them objectionable. In other words, the Board now distinguishes between language prescribing that at-will status cannot be changed by the employer or its representatives (which remains lawful), and policies indicating that such status can never be changed under any circumstances (which is now over the line).

The Board Shows No Signs of Slowing Down This Year

Despite the popular conception that the pace of its decisions has trickled to a standstill, the Board remains extremely active when it comes to policing employer handbooks for encroachment on Section 7 rights. In Target Corp., 359 NLRB No. 103, the Board recently struck down a solicitation policy as overbroad to the extent that it purported to ban such activity “for commercial purposes,” thereby leading employees to construe the policy as a prohibition on “solicitation and distributions for other organizations, such as unions.”

Returning to familiar territory, the Board overturned the discharge of three employees in Bettie Page Clothing, 359 NLRB No. 96, on the basis that they were engaging in protected concerted activity when they posted Facebook messages complaining about their working conditions. The Board also found that the employer had violated the NLRA by maintaining a “Wage and Salary Disclosure” rule prohibiting employees from disclosing information about wages or compensation to any third party or to other employees.

More recently, the Board in New York Party Shuttle, 359 NLRB No. 112, found that an employer violated Section 7 when it terminated a tour guide for publicizing organizing activities and criticizing working conditions via Facebook and through various internal e-mails. In doing so, the Board specifically found that the communications at issue constituted protected activity, even though they were made to tour guides employed by other area employers.

Practical Implications for Your Workplace Policies

Above all else, these developments put an emphasis on the importance of proactive review of all handbook policies and procedures for potential encroachment on Section 7 rights ' before the NLRB does it for you. After all, while its short-term authority remains in doubt, the Board's direction over the long term remains fixed on a course that emphasizes concerted protected activity, a doctrine requiring no union presence whatsoever. It is also worth noting that the agency retains remedial authority to impose extensive relief in the form of measures ranging from policy rescission to Intranet notice on a corporate-wide basis.

Even long-term policies that may appear entirely innocuous on their face (at-will statements, for example), are more susceptible to agency scrutiny than ever before. Consequently, it is important to apply a comprehensive approach that critically evaluates policy language from the Board's perspective. Along the way, certain elements should immediately raise red flags, including the following:

• Vague or ambiguous language (particularly within social media and confidentiality policies) generally proscribing an array of conduct that is off limits, while failing to define operative terms with sufficient specificity;
• Compelling advance authorization prior to engaging in the conduct at issue;
• Broad categories of prohibited or required conduct;
• Any language purporting to restrict internal wage or disciplinary discussion;
• Use of “generic” terms such as “unprofessional,” “misleading” or “inappropriate”;
• Language compelling all employees to confine their concerns to management;
• Blanket confidentiality provisions within the context of internal investigations;
• At-will disclaimers precluding modification by anyone at any time;
• Access rules reserving managerial discretion or requiring advance approval; and
• Solicitation restrictions extending beyond working time and working areas.

As an alternative, employers are encouraged to adhere to a few basic principles when it comes to policy language:

• Be concise;
• Be specific;
• Narrowly focus on unprotected behavior;
• Provide concrete examples; and
• While not a panacea, include a broad-based but understandable disclaimer.

Regardless of the Board's current status, increased focus on the non-union workplace looks like it's here to stay. In an increasingly complex regulatory environment, corporate counsel are advised to get ahead of the curve when it comes to this burgeoning trend, and to take a proactive stance when it comes to auditing policies and procedures that currently present a substantial risk for union and non-union businesses alike. While it may pose new challenges, the Board's recent body of work does offer a roadmap for compliance going forward.

Steven M. Bernstein is a partner in the Tampa, FL, office of Fisher & Phillips LLP, a national labor and employment law firm that represents management. He also serves as a Chair of the firm's Associate Development and Retention Committee. He can be reached at [email protected].

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The figures on union membership have been crunched for decades now, yet the percentages have never been lower than they are right now. At 6.6% of the private sector workforce, organized labor is in the midst of its greatest down-turn since the passage of the National Labor Relations Act (NLRA) in 1935. Any number of factors have contributed to this decline, and additional membership losses are projected over the coming years.

To an agency tasked with overseeing representation elections and investigating unfair labor practices that typically flow from organizing campaigns, these figures paint a sobering picture for the National Labor Relations Board (NLRB or the Board). Confronting a world in which unions wield diminishing influence, the Board is facing a decline in labor activity that threatens to drain its dockets ' and ultimately its enforcement budgets.

Within this changing landscape, the Board has revisited an age-old doctrine to define a new role for itself that will ensure continued viability outside the context of organized labor. That doctrine has long been referred to as “concerted protected activity,” a term that emanates from Section 7 of the NLRA. Encroachment upon an employee's Section 7 rights constituted an independent violation of Section 8(a)(1) of the NLRA. To drive home the point, the Board recently launched a website in an effort to openly promote the doctrine. The vehicle employed by the Board to revive this doctrine ' the employee handbook ' is as common to the workplace as employees themselves.

Breathing New Life into an Old Doctrine

Put simply, the doctrine of concerted protected activity extends protection to all employees (union or non-union) who band together “for mutual aid or protection,” typically by expressing shared concerns over common employment terms and conditions. To illustrate this concept, the Board has long relied upon the image of employees gathered around the proverbial water cooler to engage in discourse over matters pertaining to wages or benefits.

Granted, Congress could never have fathomed the advent of social media outlets such as Facebook at the time of Section 7's enactment. By approaching social media as “the water cooler of the 21st century,” the Board has managed to breathe new life into old doctrine, reaffirming its own relevance in the process. Because virtually every employee handbook purports to restrict employee use of social media on (as well as off) duty, the Board has a ready vehicle at its disposal to scrutinize policy for the possibility of impermissible encroachment on this doctrine.

Social media offers just one (albeit high-profile) example of the Board's attempt at self-renewal. Other handbook policies under increased agency scrutiny include confidentiality provisions, at-will disclaimers, and access rules. The remainder of this article reviews these developments from a legal perspective, and offers some practical insights into their implications for workplace policies going forward.

The Tenuous Position of the Current Board

Six months into its second tumultuous year, the current Board has seen its share of controversy already. Typically comprised of five members appointed to five-year terms, the Board is presently operating with a narrow quorum of three Democratic members. Two of those members are serving recess appointments that were initially conferred in January 2012 and expire with the end of the current Senate term, while the third (Chairman Pearce) occupies a standing position that is scheduled to expire on Aug. 27 of this year.

The legitimacy of the Board's quorum (and by extension its legal authority to act) has been called into question by virtue of the nature of the recess appointments, both of which were made during a pro-forma intra session of Congress (i.e., while Congress technically remained in session and was not in formal recess). This challenge came to fruition with the recent decision of the D.C. Circuit Court of Appeals in Noel Canning v. NLRB , 705 F. 3d 490, which struck down the Board's authority to act for want of a lawful quorum. That decision is now before the U.S. Supreme Court on a petition for certiorari that, if granted, has broad ramifications for hundreds of other decisions issued by the Board over the past 18 months alone.

Even if the petition is granted, it will likely be months before the case is argued, let alone decided. In the meantime, the Board has made clear that it intends to continue operating on a “business as usual” basis. Operating parallel to judicial review is the political process, through which the Administration has referred a package of five candidates (consisting of the three current members and two Republican nominees) to Congress for advice and consent. It remains to be seen whether agreement can be reached on a slate of candidates prior to the expiration of Chairman Pearce's term this summer, the absence of which would effectively shut down the agency for all practical purposes.

A Look Back on the Current Board's Body of Work in 2012

The NLRB demonstrated an increased interest in regulating the non-union workplace this past year. Indeed, 2012 was a particularly busy one for the Board, seeing the issuance of a slew of decisions expanding and redefining the concept of concerted protected activity. Nowhere was that development felt more profoundly than in the realm of social media.

With a trio of decisions in 2012, the Board staked new ground for Section 7. In Costco Wholesale Corp., 358 NLRB No. 106, the Board invalidated an electronic posting policy prohibiting any posts that damaged the company, its reputation, or defamed any individual, as an overly broad restriction on Section 7 rights.

From there, the NLRB issued its decision in Karl Knauz Motors, 358 NLRB No. 164, striking down the employer's “courtesy rule” as overbroad on the basis that employees could reasonably construe it as encompassing concerted protected activity. As the year drew to a close, the Board rendered its decision in Hispanics United, 359 NLRB No. 37, which examined the termination of five employees for making critical comments about one of their co-workers, concluding that those discharges violated Section 8(a)(1).

While its focus on social media captured the public's attention, the Board was also busy reevaluating the rights of employers within the context of internal investigations. In Banner Health System, 358 NLRB No. 93, an employer was found to have illegally interfered with Section 7 rights by applying a blanket policy prohibiting employees from discussing internal complaints while they remained under investigation. To justify such restrictions, the Board emphasized that an employer must demonstrate a legitimate business justification outweighing employee Section 7 rights. Calling for an individualized assessment, the NLRB noted that a generalized concern over protecting the integrity of workplace investigations is insufficient.

The Board's Division of Advice subsequently published guidance that seemingly offered a safe harbor for employers under these circumstances, through its memo in Verso Paper, Case No. 30-CA-089350 (1/29/13). Specifically, the Division noted that overly broad confidentiality language would have been deemed acceptable had it contained the following provision:

[The Company] may decide in some circumstances that in order to achieve these objectives, we must maintain the investigation and our role in it in strict confidence. If [the Company] reasonably imposes such a requirement and we do not maintain such confidentiality, we may be subject to disciplinary action up to and including immediate termination.

In FlexFrac Logistics LLC, 358 NLRB No. 127, the Board invalidated a confidentiality provision on the basis that it unlawfully infringed upon Section 7 rights, to the extent that it could cause employees to reasonably believe they were prohibited from discussing wages or other employment terms. The fact that the restriction in this case only purported to prohibit external disclosure did not alter the Board's analysis, noting that the rule could still be construed to prohibit disclosure to union representatives.

Extending its concerted protected activity doctrine beyond the realm of social media and confidentiality, the NLRB made a foray into off-duty premises access rules with a pair of decisions issued last year. In Sodexo America, 358 NLRB No. 79, the Board found a hospital in violation of Section 8(a)(1) by maintaining a rule limiting off-duty access to certain specified purposes, such as patient visits, medical treatment, or hospital business.

That was followed by the Board's decision in Marriott International, 359 NLRB No. 8, which invalidated a rule prohibiting access more than 15 minutes before or after a scheduled shift, except in unspecified circumstances subject to prior approval. In both cases, the Board took issue with the presence of managerial discretion, noting that it had a tendency to “chill” employees in the exercise of section 7 rights, and that such rules could force employees to disclose their true intentions to management in advance. Consequently, the Board now takes the position that to be deemed acceptable, such rules must be stated in simple “all or nothing” terms (i.e., no off-duty access under any circumstances) so as to remove the specter of management discretion or advance approval.

Even well-established handbook provisions, such as at-will disclaimers, drew the Board's scrutiny. Proceedings advanced in a pair of NLRB cases suggested that the agency was now carefully scrutinizing these policies. Neither American Red Cross, Case No. 28-CA-23443 nor Hyatt Hotels Corp., Case No. 28-CA-061114 made their way up to the Board, as the former was the result of an ALJ's decision, and the latter the product of settlement. Both cases, however, made abundantly clear that employers were at risk to the extent they promulgated acknowledgement forms confirming that at-will status may not be altered (in the latter case, without signed authorization) in any way.

These cases gave rise to a fair amount of media scrutiny, ultimately leading the agency to direct all at-will cases to the Division of Advice for consideration by the Board's General Counsel. Shortly thereafter, the General Counsel issued a pair of advice memos (MiMi's Caf', Case No. 28-CA-084365, and Rocha Transportation, Case No. 32-CA-086799), distinguishing the decision in American Red Cross and finding no violation. Crucial to this analysis was the determination that neither policy purported to restrict the right of employees to alter their at-will status through the selection of a collective bargaining representative.

To the contrary, the policies merely emphasized either that employer representatives were not authorized to modify at-will status, or that modification authority was vested in the corporate president only. Had either policy effectively ruled out modification of at-will status completely, then presumably the General Counsel would have found them objectionable. In other words, the Board now distinguishes between language prescribing that at-will status cannot be changed by the employer or its representatives (which remains lawful), and policies indicating that such status can never be changed under any circumstances (which is now over the line).

The Board Shows No Signs of Slowing Down This Year

Despite the popular conception that the pace of its decisions has trickled to a standstill, the Board remains extremely active when it comes to policing employer handbooks for encroachment on Section 7 rights. In Target Corp., 359 NLRB No. 103, the Board recently struck down a solicitation policy as overbroad to the extent that it purported to ban such activity “for commercial purposes,” thereby leading employees to construe the policy as a prohibition on “solicitation and distributions for other organizations, such as unions.”

Returning to familiar territory, the Board overturned the discharge of three employees in Bettie Page Clothing, 359 NLRB No. 96, on the basis that they were engaging in protected concerted activity when they posted Facebook messages complaining about their working conditions. The Board also found that the employer had violated the NLRA by maintaining a “Wage and Salary Disclosure” rule prohibiting employees from disclosing information about wages or compensation to any third party or to other employees.

More recently, the Board in New York Party Shuttle, 359 NLRB No. 112, found that an employer violated Section 7 when it terminated a tour guide for publicizing organizing activities and criticizing working conditions via Facebook and through various internal e-mails. In doing so, the Board specifically found that the communications at issue constituted protected activity, even though they were made to tour guides employed by other area employers.

Practical Implications for Your Workplace Policies

Above all else, these developments put an emphasis on the importance of proactive review of all handbook policies and procedures for potential encroachment on Section 7 rights ' before the NLRB does it for you. After all, while its short-term authority remains in doubt, the Board's direction over the long term remains fixed on a course that emphasizes concerted protected activity, a doctrine requiring no union presence whatsoever. It is also worth noting that the agency retains remedial authority to impose extensive relief in the form of measures ranging from policy rescission to Intranet notice on a corporate-wide basis.

Even long-term policies that may appear entirely innocuous on their face (at-will statements, for example), are more susceptible to agency scrutiny than ever before. Consequently, it is important to apply a comprehensive approach that critically evaluates policy language from the Board's perspective. Along the way, certain elements should immediately raise red flags, including the following:

• Vague or ambiguous language (particularly within social media and confidentiality policies) generally proscribing an array of conduct that is off limits, while failing to define operative terms with sufficient specificity;
• Compelling advance authorization prior to engaging in the conduct at issue;
• Broad categories of prohibited or required conduct;
• Any language purporting to restrict internal wage or disciplinary discussion;
• Use of “generic” terms such as “unprofessional,” “misleading” or “inappropriate”;
• Language compelling all employees to confine their concerns to management;
• Blanket confidentiality provisions within the context of internal investigations;
• At-will disclaimers precluding modification by anyone at any time;
• Access rules reserving managerial discretion or requiring advance approval; and
• Solicitation restrictions extending beyond working time and working areas.

As an alternative, employers are encouraged to adhere to a few basic principles when it comes to policy language:

• Be concise;
• Be specific;
• Narrowly focus on unprotected behavior;
• Provide concrete examples; and
• While not a panacea, include a broad-based but understandable disclaimer.

Regardless of the Board's current status, increased focus on the non-union workplace looks like it's here to stay. In an increasingly complex regulatory environment, corporate counsel are advised to get ahead of the curve when it comes to this burgeoning trend, and to take a proactive stance when it comes to auditing policies and procedures that currently present a substantial risk for union and non-union businesses alike. While it may pose new challenges, the Board's recent body of work does offer a roadmap for compliance going forward.

Steven M. Bernstein is a partner in the Tampa, FL, office of Fisher & Phillips LLP, a national labor and employment law firm that represents management. He also serves as a Chair of the firm's Associate Development and Retention Committee. He can be reached at [email protected].

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