Recent NLRB Actions

Section 7 of the NLRA prohibits both union and non-union employers from infringing on the right of employees to act together for their “mutual aid or protection.” According to the current NLRB, a statement describing at-will employment may be illegal if it can produce a “chilling effect” on protected Section 7 activity. The NLRB has issued several opinions providing guidelines about these frequently used statements.

To be unlawful, one of the following conditions must exist: 1) the employee would reasonably construe the language to prohibit protected collective action; 2) the rule was promulgated in response to union activity; or 3) the rule has been applied to restrict the exercise of protected collective action. For example, in the Arizona Red Cross Blood Services case, the NLRB held that an employee handbook statement reading, “I further agree that the at-will employment relationship cannot be amended, modified or altered in any way” was illegal because it could be construed as prohibiting Section 7 activity. Whether the employer would actually enforce the statement to prohibit concerted activity was irrelevant to the NLRB analysis.

At-will employment statements are not automatically illegal. The NRLB upheld two such statements in the Mimi's Caf' and Rocha Transportation cases. In these cases, the statements in question defined an at-will employment relationship, established who could amend the employment relationship, and prohibited company representatives from entering into an employment agreement that was not at-will employment. These statements did not produce a “chilling effect” because unlike the Arizona Red Cross agreement, they did not prohibit any and all changes to the at-will agreement; rather, these statements simply outlined when the employer could not change the at-will agreement. Therefore, the statements in Mimi's Caf' and Rocha Transportation would not lead a person to reasonably believe protected concerted activity was prohibited.

In the wake of these decisions, employers should be careful about statements that contain a personal waiver (e.g., using the pronoun “I”) of the right to change the “at-will” employment relationship and blanket prohibitions on amending the at-will employment arrangement.

Arbitration Agreements

Many employers use arbitration agreements to minimize the burden and expense associated with defending against lawsuits filed by employees in state or federal courts, especially “class action” lawsuits filed by groups of employees that can expose an employer to overwhelming legal costs and liability. Resolving such disputes through arbitration can be faster and less costly. But whether employers may require employees to sign arbitration agreements waiving the right to file class action lawsuits is unclear after the NLRB's recent decision in Murphy Oil USA, Inc. and Sheila Hobson, as well as the Fair Pay and Safe Workplace Executive Action signed by President Obama in July 2014.

In Murphy Oil, the NRLB held that arbitration agreements containing class and collective action waivers as a condition of employment are unenforceable because they violate the NLRA. Murphy Oil required its employees to sign such a waiver, but a group of four employees filed a class action suit alleging wage and hour violations. The NLRB concluded that employees have the right to file class and collective action suits because these are forms of engaging in protected concerted activity for mutual aid or protection. Therefore, any employment agreement forcing employees to waive these rights violates the NLRA.

This decision's impact is unclear for most employers because it is at odds with the decisions of several federal courts. The Second, Fifth, and Eighth Circuits all hold that the Federal Arbitration Act's policy to favor arbitration trumps the NLRA's arbitration moratorium, but the NLRB continues to hold its ground. Until the United States Supreme Court resolves this split, the NLRB will enforce its ruling to employers' detriment.

However, certain employers who qualify as federal contractors do not need to wait for the courts because, under the Fair Pay and Safe Workplace Executive Action, employers with large ($1 million or more) federal contracts are prohibited from requiring employees to sign arbitration agreements for any disputes ' regardless of whether it is a class action ' alleging violations of Title VII (including sex, race, national origin and religious discrimination claims) or “any tort related to or arising out of sexual assault or harassment.” Thus, employers should review policies to identify potentially problematic arbitration agreements.

Social Media and e-Mail

Section 7 also may protect employees for work-related statements made on social media networks, and recent NLRB actions will likely impact the content and application of employers' social media policies, including disciplinary action for behavior on social media.

Similar to at-will statements, an employer's social media policy may violate Section 7 if it produces a “chilling effect.” Policies should not be written so broadly as to prohibit employees from discussing the terms and conditions of their employment because this could be construed as prohibiting protected concerted activity.

Further, the NRLB can overturn employee terminations for social media infractions if the employee was engaged in legally protected concerted activity. For example, in New York Party Shuttle, LLC , the NLRB held that an employer violated the NLRA when it discharged a tour guide who posted complaints about the company on its Facebook page. The NLRB found that the tour guide's complaints were a continuation of prior attempts to discuss unionization and thus constituted protected activity. He was ordered reinstated.

Even a simple “like” of a status update can be protected by Section 7. In Triple Play Sports Bar and Grille, an employee aired grievances about his employer in a Facebook status, earning a “like” from a co-worker. The employer terminated both of the employees. The NLRB overturned the terminations, holding that the employees had engaged in legally protected concerted activity because the “like” signified support of the posting employee's concerns.

Employees do not have complete free rein on social media. The NLRB recently upheld the termination of two employees for an “egregious” social media conversation in Richmond District Neighborhood Center and Ian Callaghan. In this case, two after-school program employees engaged in a lengthy Facebook exchange describing their plans to be insubordinate, disregard children's safety, and neglect their duties. These threats justified losing Section 7 protection.

Therefore, employers should avoid overbroad social media policies and ensure that terminations for social media infractions do not violate Section 7.

Moreover, in December 2014, the NLRB held that employees may engage in union organizing activities over work e-mail during nonworking time in Purple Communications, Inc. and Communications Workers of America, AFL-CIO, overruling the 2007 Register Guard case, which prohibited such e-mail usage. There are some limitations to Purple Communications: Employees must already have access to a work e-mail account to use it for organizing, and employers may ban non-work e-mail in “special circumstances” or establish controls to manage production and discipline. The NLRB stated that its ruling applies retroactively, thus jeopardizing the legality of Register Guard-compliant policies.

Confidentiality Provisions

Although many employers use confidentiality clauses to prevent disclosure of salaries, profits, costs, and other sensitive information, employers should note that such provisions are under intense scrutiny. Both the NLRB and some courts have determined that such policies may interfere with employees' Section 7 rights.

Recently, in Flex Frac Logistics, L.L.C. et al. v. NLRB, 746 F. 3d 205 (5th Cir. 2014), the Fifth Circuit upheld the NLRB's determination that a non-union company's confidentiality clause violated its employees' right to discuss wages and was therefore unlawful. An employee discharged by the trucking company filed an unfair labor practice charge with the NLRB, attacking the following confidentiality clause:

Employees deal with and have access to information that must stay within the Organization. Confidential information includes, but is not limited to, information that is related to: our customers, suppliers, distributors; ' organization management and marketing processes, plans and ideas, processes and plans, our financial information, including costs, prices; current and future business plans, our computer and software systems and processes; personnel information and documents, and our logos, and art work. No employee is permitted to share this Confidential Information outside the organization, or to remove or make copies of any [Organization] records, reports or documents in any form, without prior management approval. Disclosure of Confidential Information could lead to termination, as well as other possible legal action.

Although the policy did not outright ban employees from discussing their wages, the court held that the prohibition on sharing “financial information, including costs” could reasonably be construed by employees to include wages, a working condition that employees have a right to discuss. Further, the policy did not clarify that some personnel information, such as wages, was not included. Therefore, the provision violated the Act.

To reduce exposure, employers should make sure that their confidentiality policies do not ban employees from discussing their wages or other working conditions and confirm that such policies cannot reasonably be construed as banning such discussion.

Confidentiality issues also arise in the area of workplace investigations. Although employers may have policies protecting the confidentiality of investigations, the NLRB has ruled that they may not rely on blanket justifications for such policies automatically requiring confidentiality. In Banner Health System d/b/a Banner Estrella Medical Center and James Navarro, the NLRB ruled that one such policy violated the NLRA because the company's “generalized concern with protecting the integrity of its investigations” did not outweigh employees' rights to discuss an ongoing investigation into employee misconduct. According to the NLRB, to require confidentiality, an employer must show that its legitimate business interest outweighs the employee's Section 7 rights. The NLRB stated that employers should consider such factors as whether: 1) witnesses need protection; 2) evidence is in danger of being destroyed; 3) testimony is in danger of being fabricated; or 4) there is a need to prevent a cover-up.

Such limitations on employers' ability to require confidentiality potentially put businesses in an untenable position. According to the NLRB, employers must weigh their interests in confidentiality against employees' rights before even knowing all of the facts that would allow them to make this determination. Further, the NLRB's rule may impede management efforts to protect employees from retaliation.

Non-disparagement Provisions

Similarly, the NLRB is targeting employers' use of non-disparagement clauses, which are often used in settlement agreements, employment contracts, and employee handbooks to discourage “bad-mouthing” of organizations. The NLRB struck one such clause in Quicken Loans Inc. and Lydia Garza, which stated that the employee would not “publicly criticize, ridicule, disparage or defame the company or its products, services, policies, directors, officers, shareholders or employees ' through any written or oral statement or image (including ' statements made via websites, blogs, postings to the [I]nternet, or e-mails and whether or not they are made anonymously or through the use of a pseudonym).” The NLRB upheld the decision below and concluded that employees would reasonably construe the policy as restricting their ability to exercise their Section 7 rights, which include, within limits, criticizing their employer and its products.

Union Representation Election Procedures: Update

The NLRB published its union-friendly final rule governing representation elections in December 2014; the final rule is commonly referred to as the “Quickie” or “Ambush” Election Rule. The rule establishes multiple new requirements that will dramatically change union representation drives, three of which are particularly troublesome for employers. First and most importantly, the time between the union's petition of representation and the election is significantly reduced. Now, elections will occur between 10 and 21 days after a union files the petition, down from the current average of 40 days.

Second, a hearing over disputes (such as voter eligibility) will take place after the election; employers must provide a comprehensive “Statement of Position” outlining arguments against union representation seven days before the hearing, and waive any issues not included.

Third, employers must provide the union with a list of all employees' contact information, including e-mail addresses and phone numbers, two days before the election. The new rule is effective on April 14, 2015 and will undoubtedly impact how employers respond to union organization attempts. Employers should evaluate potential vulnerabilities and adjust their current strategic responses given these challenging new time frames.

NLRB v. Noel Canning: Update

In June 2014, the United States Supreme Court invalidated President Obama's recess appointments of three NLRB members in NLRB v. Noel Canning. The appointments, made in January 2012, were not valid until confirmed by the Senate in August 2013, and the Court's decision has called into question the validity of NLRB decisions issued during this time. The NLRB has begun to take action, including reaffirming its decision in Quicken Loans , and the NLRB will likely revisit and reaffirm other controversial decisions issued during this period. Employers should stay tuned as Noel Canning's impact on NLRB decisions and the NLRB's response continue to unfold.

In light of these recent developments concerning complicated legal issues, employers should consult with experienced labor and employment counsel to minimize their risk of liability under the NLRA.

E. Fredrick Preis, Jr., Joseph R. Hugg, Rachael Jeanfreau and Rachael Coe are attorneys in the Labor & Employment Section of the Breazeale, Sachse & Wilson law firm, which represents management.

Over the last few years, the National Labor Relations Board (NLRB) has dramatically expanded employee rights to engage in “protected concerted activity” by limiting employers' use of many standard employment policies and practices. Now, the NLRB is implementing sweeping changes to the decades-old representation election process, making it faster and easier for unions to organize the workplace. This article highlights recent NLRB decisions and actions that have broadened the scope of employees' rights under Section 7 of the National Labor Relations Act (NLRA), summarizes the December 2014 final rule changing the representation election process, and provides an update on the court decisions in the Noel Canning case, which cast doubt on some recent NLRB actions. See NLRB v. Noel Canning , 134 S. Ct. 2550 (2014).

At-Will Employee Statements

In order to defend against employees' claims that employee handbooks and other written policies created a binding employment contract, employers traditionally have included in such written policies a statement confirming that no contract is being created and that employment is “at-will.” Ignoring the true purpose of such statements, recent NLRB decisions have held that certain at-will employment statements are unlawful under Section 7 of the NLRA, forcing employers to revise handbooks and other policies to avoid legal exposure.

Section 7 of the NLRA prohibits both union and non-union employers from infringing on the right of employees to act together for their “mutual aid or protection.” According to the current NLRB, a statement describing at-will employment may be illegal if it can produce a “chilling effect” on protected Section 7 activity. The NLRB has issued several opinions providing guidelines about these frequently used statements.

To be unlawful, one of the following conditions must exist: 1) the employee would reasonably construe the language to prohibit protected collective action; 2) the rule was promulgated in response to union activity; or 3) the rule has been applied to restrict the exercise of protected collective action. For example, in the Arizona Red Cross Blood Services case, the NLRB held that an employee handbook statement reading, “I further agree that the at-will employment relationship cannot be amended, modified or altered in any way” was illegal because it could be construed as prohibiting Section 7 activity. Whether the employer would actually enforce the statement to prohibit concerted activity was irrelevant to the NLRB analysis.

At-will employment statements are not automatically illegal. The NRLB upheld two such statements in the Mimi's Caf' and Rocha Transportation cases. In these cases, the statements in question defined an at-will employment relationship, established who could amend the employment relationship, and prohibited company representatives from entering into an employment agreement that was not at-will employment. These statements did not produce a “chilling effect” because unlike the Arizona Red Cross agreement, they did not prohibit any and all changes to the at-will agreement; rather, these statements simply outlined when the employer could not change the at-will agreement. Therefore, the statements in Mimi's Caf' and Rocha Transportation would not lead a person to reasonably believe protected concerted activity was prohibited.

In the wake of these decisions, employers should be careful about statements that contain a personal waiver (e.g., using the pronoun “I”) of the right to change the “at-will” employment relationship and blanket prohibitions on amending the at-will employment arrangement.

Arbitration Agreements

Many employers use arbitration agreements to minimize the burden and expense associated with defending against lawsuits filed by employees in state or federal courts, especially “class action” lawsuits filed by groups of employees that can expose an employer to overwhelming legal costs and liability. Resolving such disputes through arbitration can be faster and less costly. But whether employers may require employees to sign arbitration agreements waiving the right to file class action lawsuits is unclear after the NLRB's recent decision in Murphy Oil USA, Inc . and Sheila Hobson , as well as the Fair Pay and Safe Workplace Executive Action signed by President Obama in July 2014.

In Murphy Oil, the NRLB held that arbitration agreements containing class and collective action waivers as a condition of employment are unenforceable because they violate the NLRA. Murphy Oil required its employees to sign such a waiver, but a group of four employees filed a class action suit alleging wage and hour violations. The NLRB concluded that employees have the right to file class and collective action suits because these are forms of engaging in protected concerted activity for mutual aid or protection. Therefore, any employment agreement forcing employees to waive these rights violates the NLRA.

This decision's impact is unclear for most employers because it is at odds with the decisions of several federal courts. The Second, Fifth, and Eighth Circuits all hold that the Federal Arbitration Act's policy to favor arbitration trumps the NLRA's arbitration moratorium, but the NLRB continues to hold its ground. Until the United States Supreme Court resolves this split, the NLRB will enforce its ruling to employers' detriment.

However, certain employers who qualify as federal contractors do not need to wait for the courts because, under the Fair Pay and Safe Workplace Executive Action, employers with large ($1 million or more) federal contracts are prohibited from requiring employees to sign arbitration agreements for any disputes ' regardless of whether it is a class action ' alleging violations of Title VII (including sex, race, national origin and religious discrimination claims) or “any tort related to or arising out of sexual assault or harassment.” Thus, employers should review policies to identify potentially problematic arbitration agreements.

Social Media and e-Mail

Section 7 also may protect employees for work-related statements made on social media networks, and recent NLRB actions will likely impact the content and application of employers' social media policies, including disciplinary action for behavior on social media.

Similar to at-will statements, an employer's social media policy may violate Section 7 if it produces a “chilling effect.” Policies should not be written so broadly as to prohibit employees from discussing the terms and conditions of their employment because this could be construed as prohibiting protected concerted activity.

Further, the NRLB can overturn employee terminations for social media infractions if the employee was engaged in legally protected concerted activity. For example, in New York Party Shuttle, LLC , the NLRB held that an employer violated the NLRA when it discharged a tour guide who posted complaints about the company on its Facebook page. The NLRB found that the tour guide's complaints were a continuation of prior attempts to discuss unionization and thus constituted protected activity. He was ordered reinstated.

Even a simple “like” of a status update can be protected by Section 7. In Triple Play Sports Bar and Grille, an employee aired grievances about his employer in a Facebook status, earning a “like” from a co-worker. The employer terminated both of the employees. The NLRB overturned the terminations, holding that the employees had engaged in legally protected concerted activity because the “like” signified support of the posting employee's concerns.

Employees do not have complete free rein on social media. The NLRB recently upheld the termination of two employees for an “egregious” social media conversation in Richmond District Neighborhood Center and Ian Callaghan. In this case, two after-school program employees engaged in a lengthy Facebook exchange describing their plans to be insubordinate, disregard children's safety, and neglect their duties. These threats justified losing Section 7 protection.

Therefore, employers should avoid overbroad social media policies and ensure that terminations for social media infractions do not violate Section 7.

Moreover, in December 2014, the NLRB held that employees may engage in union organizing activities over work e-mail during nonworking time in Purple Communications, Inc. and Communications Workers of America, AFL-CIO, overruling the 2007 Register Guard case, which prohibited such e-mail usage. There are some limitations to Purple Communications: Employees must already have access to a work e-mail account to use it for organizing, and employers may ban non-work e-mail in “special circumstances” or establish controls to manage production and discipline. The NLRB stated that its ruling applies retroactively, thus jeopardizing the legality of Register Guard-compliant policies.

Confidentiality Provisions

Although many employers use confidentiality clauses to prevent disclosure of salaries, profits, costs, and other sensitive information, employers should note that such provisions are under intense scrutiny. Both the NLRB and some courts have determined that such policies may interfere with employees' Section 7 rights.

Recently, in Flex Frac Logistics, L.L.C. et al. v. NLRB, 746 F. 3d 205 (5th Cir. 2014), the Fifth Circuit upheld the NLRB's determination that a non-union company's confidentiality clause violated its employees' right to discuss wages and was therefore unlawful. An employee discharged by the trucking company filed an unfair labor practice charge with the NLRB, attacking the following confidentiality clause:

Employees deal with and have access to information that must stay within the Organization. Confidential information includes, but is not limited to, information that is related to: our customers, suppliers, distributors; ' organization management and marketing processes, plans and ideas, processes and plans, our financial information, including costs, prices; current and future business plans, our computer and software systems and processes; personnel information and documents, and our logos, and art work. No employee is permitted to share this Confidential Information outside the organization, or to remove or make copies of any [Organization] records, reports or documents in any form, without prior management approval. Disclosure of Confidential Information could lead to termination, as well as other possible legal action.

Although the policy did not outright ban employees from discussing their wages, the court held that the prohibition on sharing “financial information, including costs” could reasonably be construed by employees to include wages, a working condition that employees have a right to discuss. Further, the policy did not clarify that some personnel information, such as wages, was not included. Therefore, the provision violated the Act.

To reduce exposure, employers should make sure that their confidentiality policies do not ban employees from discussing their wages or other working conditions and confirm that such policies cannot reasonably be construed as banning such discussion.

Confidentiality issues also arise in the area of workplace investigations. Although employers may have policies protecting the confidentiality of investigations, the NLRB has ruled that they may not rely on blanket justifications for such policies automatically requiring confidentiality. In Banner Health System d/b/a Banner Estrella Medical Center and James Navarro, the NLRB ruled that one such policy violated the NLRA because the company's “generalized concern with protecting the integrity of its investigations” did not outweigh employees' rights to discuss an ongoing investigation into employee misconduct. According to the NLRB, to require confidentiality, an employer must show that its legitimate business interest outweighs the employee's Section 7 rights. The NLRB stated that employers should consider such factors as whether: 1) witnesses need protection; 2) evidence is in danger of being destroyed; 3) testimony is in danger of being fabricated; or 4) there is a need to prevent a cover-up.

Such limitations on employers' ability to require confidentiality potentially put businesses in an untenable position. According to the NLRB, employers must weigh their interests in confidentiality against employees' rights before even knowing all of the facts that would allow them to make this determination. Further, the NLRB's rule may impede management efforts to protect employees from retaliation.

Non-disparagement Provisions

Similarly, the NLRB is targeting employers' use of non-disparagement clauses, which are often used in settlement agreements, employment contracts, and employee handbooks to discourage “bad-mouthing” of organizations. The NLRB struck one such clause in Quicken Loans Inc. and Lydia Garza, which stated that the employee would not “publicly criticize, ridicule, disparage or defame the company or its products, services, policies, directors, officers, shareholders or employees ' through any written or oral statement or image (including ' statements made via websites, blogs, postings to the [I]nternet, or e-mails and whether or not they are made anonymously or through the use of a pseudonym).” The NLRB upheld the decision below and concluded that employees would reasonably construe the policy as restricting their ability to exercise their Section 7 rights, which include, within limits, criticizing their employer and its products.

Union Representation Election Procedures: Update

The NLRB published its union-friendly final rule governing representation elections in December 2014; the final rule is commonly referred to as the “Quickie” or “Ambush” Election Rule. The rule establishes multiple new requirements that will dramatically change union representation drives, three of which are particularly troublesome for employers. First and most importantly, the time between the union's petition of representation and the election is significantly reduced. Now, elections will occur between 10 and 21 days after a union files the petition, down from the current average of 40 days.

Second, a hearing over disputes (such as voter eligibility) will take place after the election; employers must provide a comprehensive “Statement of Position” outlining arguments against union representation seven days before the hearing, and waive any issues not included.

Third, employers must provide the union with a list of all employees' contact information, including e-mail addresses and phone numbers, two days before the election. The new rule is effective on April 14, 2015 and will undoubtedly impact how employers respond to union organization attempts. Employers should evaluate potential vulnerabilities and adjust their current strategic responses given these challenging new time frames.

NLRB v. Noel Canning: Update

In June 2014, the United States Supreme Court invalidated President Obama's recess appointments of three NLRB members in NLRB v. Noel Canning. The appointments, made in January 2012, were not valid until confirmed by the Senate in August 2013, and the Court's decision has called into question the validity of NLRB decisions issued during this time. The NLRB has begun to take action, including reaffirming its decision in Quicken Loans , and the NLRB will likely revisit and reaffirm other controversial decisions issued during this period. Employers should stay tuned as Noel Canning's impact on NLRB decisions and the NLRB's response continue to unfold.

In light of these recent developments concerning complicated legal issues, employers should consult with experienced labor and employment counsel to minimize their risk of liability under the NLRA.

E. Fredrick Preis, Jr., Joseph R. Hugg, Rachael Jeanfreau and Rachael Coe are attorneys in the Labor & Employment Section of the Breazeale, Sachse & Wilson law firm, which represents management.