As promised, Part 2 of our NLRB Roundup1 takes a step back from the case law summarized in Part 1 to address other issues surrounding the current Board and its effect on the labor law landscape, including: (i) proposed comprehensive rules altering election procedures; (ii) the NLRB’s final rules requiring employers to post notices informing employees of their rights under the NLRA; (iii) developments on the prosecutorial front relating to social media; (iv) reconsideration of other NLRB law; and (v) the Boeing Company case.
Proposed Election Rule Changes, Some Approved, Matter Embroiled in Controversy
In a move that many have decried as an unfair attempt to ease the path to unionization, the NLRB has proposed several noteworthy changes to its current election rules, and has already approved some of the less consequential ones in a 2-1 decision, (which is a story in itself discussed below). These proposals incited significant controversy among union and employer advocates when first proposed. This controversy came to a head in late November, as Board Chairman Mark Pearce, a Democratic appointee, initiated a vote on a portion of the proposed changes. That led Member Brian Hayes, the Board’s lone Republican appointee, to accuse the other two Board members of attempting to circumvent the Board’s established procedural framework to implement some of the proposed changes before the Board loses its quorum in December.
Advocates of the proposed rules argue that the decline in private sector unionization, which has fallen from a high of slightly more than 35 percent in the mid-1950s to approximately 7 percent today, is partially due to delay in the union election process under the Board’s current rules. To address this purported delay, the Board announced its intention to revise its election procedures in a notice of proposed rulemaking published in June 2011. Public comment has been sharply divided, with unions applauding the rule and employer groups questioning the need for any new rules. Employer groups have also objected that the procedural changes under the new rules would unfairly limit an employers’ time to mount a response to an organizational campaign. The proposed rules’ numerous technical changes to Board election procedures fall into three general areas:
- Shortened and definite timing requirements: Pre-election hearings, held when the parties cannot agree on election issues such as unit composition and scope, would take place 7 days after a petition is filed. Similarly, post-election hearings, which address voter eligibility challenges and objections to the election, would be set within 14 days after the ballots are tallied. Both of these changes will shorten the election process.
- Procedural changes to pre- and post-election hearings: Employers would be required to file a statement of position regarding, inter alia, bargaining unit composition and scope, and voter eligibility issues. This rule would limit employers’ ability to litigate issues that arise after the hearing begins. Additionally, voter eligibility issues that do not involve more than 20 percent of the bargaining unit would be deferred until after the election. Finally, the proposed rules would eliminate employers’ ability to seek pre-election Board review, and allow the Board to deny requests for review of post-election rulings by the Regional Director.
- Substantially expanded disclosure requirements: The proposed rules would also require an employer to include in its pre-hearing position statement a list of all employees, in alphabetical order or by name or by department, and employee contact information. Also, once an election has been set, the proposed rules would substantially change the procedure for tendering an Excelsior list. Currently, an employer must provide a paper list with employee names and addresses to the NLRB within 7 days which, in turn, forwards it to the union. The proposed rules shorten this deadline to 2 days, require that more information be disclosed, and that it be done in an electronic form. Besides the names and addresses, the employer must provide employee telephone numbers and e-mail addresses and an alphabetical list, overall or by department, containing the employee’s work location, shift, and job classification. The Board has explained that these expanded disclosure requirements will help resolve unit inclusion and exclusion issues. Notably, they will also facilitate union organizing by informing the union of the employer’s departments and the areas where employees are located. Further, electronic lists with employee email addresses will obviously facilitate a union’s ability to communicate with employees.
At this point, it remains to be seen whether all of the rules will be implemented in the form proposed by the Board. After the announcement of a November vote on some of the proposed measures, Member Hayes accused the Board’s Democratic majority of attempting to issue a rule before it lost a quorum when Board Member Becker’s recess appointment expires in December. The controversy engendered by this development led some to call for Hayes to resign before the November 30 vote to eliminate a quorum and incapacitate the Board before it could issue any revisions to its election rules. Although Hayes did attend the November 30 meeting to vote against the proposals at issue, this controversy is a good example of the uncertain and contentious atmosphere that surrounds the Board’s actions at this time.
It is also possible that Congress will amend the election process. For example, on November 30 of this year, the House passed the Workforce Democracy and Fairness Act (H.R. 3094), which would amend the Board’s procedures for addressing election disputes. Among the changes envisioned by the bill are a statutory incorporation of the “community of interests” test for bargaining unit determinations, longer and defined timelines for election procedures, and limits on the disclosure of employee contact information.
Despite this uncertainty, employers should not assume that these proposed changes will go away. Whether or not the Board issues additional rules regarding those proposals still under consideration, these proposed rules provide a valuable hint of how the Board’s election procedures might change in the future, particularly if President Obama is re-elected for a second term. We will continue to monitor this area and address any notable developments in future alerts.
NLRA Notice Posting set for January 31, 2012
In August 2011, the Board issued its final rule requiring employers to post a notice advising employees of their rights under the National Labor Relations Act (“NLRA”) to pursue unionization, organize and bargain collectively, engage in other protected concerted activities, and refrain from such activities. The required notice also states that it is unlawful for an employer to interfere with, restrain, or coerce employees in the exercise of these rights. The NLRB has said that failure to post this notice may: (i) constitute an unfair labor practice; (ii) possibly serve as evidence of an unlawful motive in other unfair labor practice proceedings if the failure to post was knowing and willful; and (iii) extend the NLRA’s six-month statute of limitations.
The rule requires physical posting of an 11 x 17 notice, as well as publication on the employer’s intranet or internet site if the employer customarily uses these sites to communicate with employees. The notice posting requirement was scheduled to take effect on November 14, 2011, but the Board has postponed the effective date to January 31, 2012, reportedly to allow for further education and outreach.
The rule has been heavily criticized by some as being pro-union, although the required notice, like the notices required by other employment statutes like the Fair Labor Standards Act and the Occupational Safety and Health Act, merely advises employees of the governing law’s language and provides examples of improper conduct. Critics have also challenged the NLRB’s authority to make it an unfair labor practice to fail to post the notice or to draw inferences of unlawful motive therefrom.
Legislation has been introduced to bar the NLRB from requiring notice posting, and at least three lawsuits have been filed seeking to block the Board from implementing this rule. At this point, however, none of these efforts have been successful. Unless this changes, employers should plan on complying with the January 2012 posting requirement.
The notice posting requirement will not affect government contractors. Since June 2010, government contractors have been posting a substantially similar notice pursuant to Executive Order 13496 and Department of Labor regulations. Although they would be subject to the proposed rule, the NLRB has stated that government contractors will be regarded compliant if they post the notice required by Executive Order 13496.
A copy of the proposed notice can be downloaded from the NLRB’s website and printed for posting.
Board Continues to Focus on Social Media
Since the famous “Facebook firing” complaint in late 2010, concerns have been raised that the majority-Democrat Board’s social media focus was an attempt to establish pro-union, anti-employer precedent, while giving employees free rein to disparage their employers online. Adding to this concern were reports that the Board has fielded more than 100 charges related to social media issues.2 However, as detailed in our September 7th client alert on social media and labor law, recent developments indicate that employee comments on social media sites are not protected simply because they are posted online.3 The Board has said that it will apply settled labor law to social media cases. This approach provides a starting point and some predictability to employers in implementing social media policies and taking disciplinary action based on employee social media use. However, the widespread and instantaneous nature of social media will involve unique factual circumstances precluding absolute certainty regarding the Board’s handling of social media cases.
The Board evaluates social media policies under existing labor law.
The Acting General Counsel’s “Report …Concerning Social Media Cases” makes clear that existing standards concerning workplace rules will be applied to social media policies. A social media policy will violate Section 8(a)(1) of the Act if it would “reasonably tend to chill employees in the exercise of the Section 7 rights.”4 To determine if a social media policy would have such an effect, the Board applies the two-step test established in Lutheran Heritage Village-Livonia, first examining if the rule explicitly restricts protected activities and, if not, examining whether: (1) employees would reasonably construe the language to prohibit Section 7 activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7 rights.5 Under this criteria, the Board most likely will find unlawful policies that broadly prohibit online discussion of terms and conditions of employment without examples or limiting definitions indicating that the prohibitions do not apply to activity protected by Section 7.6 The Board will also strike down an otherwise lawful social media policy if the employer relies upon it to punish or prohibit protected concerted activity.7
Employee social media activity may be unprotected.
The Board’s recent publication also states that existing law should be applied to determine whether an employer has acted unlawfully in discharging an employee for disparaging or critical remarks via social media. As illustrated by the report’s discussion of Hispanics United of Buffalo as well as the Administrative Law Judge’s decision in that case, the Board applies a two-part test to this question: first, whether the communication was concerted and second, whether it was protected.
In Hispanics United, the employer terminated a group of employees who had used Facebook to discuss a coworker’s complaints about their job performance. After the coworker criticized the employees in preparation for a meeting with management, an employee used Facebook to tell the other employees that “[their coworker] feels that we don’t help our clients enough” and ask “My fellow coworkers, how do u feel?” Several employees then responded by defending themselves and criticizing the employer’s staffing policies. The employer subsequently terminated the employees for bullying and violating the employer’s anti-harassment policy.
The threshold consideration is whether the employee’s online complaints are concerted activity under the Meyers Industries case. Under this case an activity is deemed concerted when an employee acts “with or on the authority of other employees, and not solely by and on behalf of the employee himself.”8 Because the discussions at issue in Hispanics United were group discussions of terms and conditions of employment, the Board found that the employees had engaged in concerted activity.
As further explained in Hispanics United, the next inquiry is whether the employee’s comments lost the Act’s protection. Because the “finding of protected activity does not change if employee statements were communicated via the internet,” the report indicates that this inquiry is also unchanged by the social media context.9 Rather, the Board will evaluate the employee’s comments under either Atlantic Steel, which applies when an employee has made public outbursts against a supervisor that are so “opprobrious” as to lose the Act’s protection, or Jefferson Standard, which applies when an employee has made allegedly disparaging remarks about an employer or its product to third parties that are so “disloyal, reckless, or maliciously untrue” that they lose the Act’s protection.10 In Hispanics United, for example, the employees did not lose the Act’s protection, despite the fact that some of the posts used profanity.
The Board also acknowledged the limits of the Act’s protection for employee social media activity in three memoranda from the Division of Advice, published in quick succession this summer. As these memoranda make clear, Section 7 only protects online activities that meet the Board’s definition of protected concerted activity. Accordingly, the Division of Advice applied Board precedent to find that employers had acted lawfully in disciplining or terminating employees for the following online, work-related activity:
- A bartender’s Facebook conversation with his sister complaining about his pay and his employer’s tip policy. The bartender’s posts referred to customers as “rednecks” and said he hoped they choked on glass as they drove home drunk. The Board concluded that although the bartender had discussed the employer’s tip policy with a coworker several months before his posting, his online complaint did not “grow out” of the prior conversation, and was never discussed with his coworkers. Accordingly, the bartender’s Facebook activity was not concerted, and therefore not protected by the Act.11
- A mental health facility employee’s Facebook posts during her overnight shift remarking that it was “spooky” working at night in a “mental institution,” and commenting that a nearby resident might be hearing voices. The employer fired the employee when a former client reported the posts. Noting that the posts “did not even mention any terms or conditions of employment,” and that the employee was not seeking to induce or prepare for group action, the Board found the posts unprotected by the Act.12
- A Wal-Mart employee’s Facebook posts complaining about getting “chewed out” by his supervisor, and profanely suggesting that he and other employees were going to quit if Wal-Mart did not revise its policies. Although a coworker responded that the employee should “hang in there,” the Board found that this response suggested that the coworker “viewed [the original posts] to be a plea for emotional support” and not an effort to induce group action. Accordingly, the post was “an individual gripe” and therefore not concerted activity protected by the Act.13
As these examples demonstrate, not all employee social media activity is protected. Further, as a recent Administrative Law Judge’s decision in Karl Knauz Motors Inc. demonstrates, protected social media activity may not shield an employee from all social media-related discipline.14 In Knauz Motors, a BMW salesman posted photos and comments about a recent car accident at an affiliated car dealership and also complaints and photos mocking the food served at his employer’s sales promotional event, which the employee felt was inconsistent with BMW’s status as a luxury brand. In addition to posting photos of the events, the employee commented that the food was limited to “chips . . . [a] $2.00 cookie plate from Sam’s Club . . . semi fresh apples and oranges . . . [and] to top it all off, [a] Hot Dog Cart.” While the ALJ found that the employee had engaged in protected concerted activity by posting the photos and comments, which he discussed with his coworkers, the ALJ also found that the employee had not been terminated for these comments. Rather, the ALJ agreed with the employer’s argument that the employee was terminated for posting photos and comments mocking a recent car accident at an affiliated dealership. Because the ALJ found that these photos and comments were not protected, he upheld the employer’s decision to terminate the employee. While it remains to be seen whether the Acting General Counsel will file exceptions to this decision, Knauz Motors is a good example of the fact-specific inquiries surrounding the application of established labor law to the social media arena.
NLRB Reconsiders Rule Protecting Employers’ Witness Statements
As revealed by its invitation for briefing in Hawaii Tribune-Herald, the Board may be re-considering its thirty-year-old policy on an employer’s duty to supply witness statements to a union taken during an investigation.15 Historically, witness statements have been considered confidential material that did not have to be turned over to a union. In Anheuser-Busch, Inc.,16 the Board determined that an employer must satisfy two elements to prove the existence of a protected witness statement: (1) that it assured the person giving the statement that the statement would remain confidential; and (2) the person has drafted and signed the statement or otherwise adopted the statement as his own.
The briefing invitation requested discussion on whether existing labor law requires: (1) asking if the statement is a witness statement; and (2) if the statement is not a witness statement, is it nevertheless privileged as attorney work product. However, the NLRB website reframed the issue to ask whether the Board should continue to adhere to the holding in Anheuser-Busch that an employer’s duty to furnish information does not encompass the duty to furnish witness statements and, if not, what standard should be applied to requests for such statements. The Board’s reframing of the issue hints at a much broader agenda, indicating that the Board may depart from the Anheuser-Busch test.
Along with witness statements, employers often take notes on the information they discover during an investigation. To protect investigation notes from disclosure, the employer must prove that: (1) it has a legitimate and substantial confidentiality interest in the investigation notes; and (2) its interest in maintaining such confidentiality outweighs the union’s need for information.17 Yet, even if the employer establishes these two elements, it must offer and seek an accommodation that would allow the union to obtain the needed information while protecting the confidentiality of the information.
Although the deadline to file briefs has passed, the Board has not yet issued its decision. As a Member, former-Chairman Liebman authored dissents in cases dealing with both witness statements and investigation notes.18 Based on these dissents, as well as the request for briefing in Hawaii Tribune-Herald, it appears the Board may extend to witness statements the confidentiality analysis that it currently applies to investigation notes, meaning the employer would have to prove a legitimate and substantial confidentiality interest that outweighs the union’s need for the requested information to avoid disclosing them. When conducting investigations, employers should be aware that a major change of NLRB precedent could be on the way, and the information they gather may no longer have the same protections.
“Unremarkable” Boeing Complaint Garners Remarkable Amount of Attention, and may now be Dismissed
On April 20, 2011, Acting General Counsel Lafe Solomon issued a complaint alleging that Boeing Co. illegally transferred some of its airliner production to a nonunion facility in South Carolina in retaliation for strikes by unionized employees at its Washington state facility. While Solomon has repeatedly urged that “there is nothing remarkable or unprecedented about the complaint,” the amount of publicity the complaint has received is anything but ordinary.
Boeing, which has a backlog of orders for its Dreamliner aircraft, announced that it would build an additional assembly line to handle the orders in North Charleston, South Carolina, rather than in its existing Puget Sound facility. According to the complaint, company officials made five comments between October 2009 and March 2010 that connect the move to the company’s experience with multiple strikes at the Washington facility, and its concern about future work stoppages. Therefore, the NLRB alleges that the company’s actions violated Section 8(a)(1) of the NLRA, which prohibits an employer from interfering with, restraining, or coercing employees in their exercise of rights under federal labor law, and Section 8(a)(3), which makes it an unfair labor practice for an employer “by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization.” The complaint also asserts that the company’s transfer of work is “inherently destructive” of the employees’ right to participate in lawful work stoppages.
Both Boeing and the NLRB have publicized their positions. In a May 3 letter that quickly appeared on the Internet, Boeing’s Executive Vice President and General Counsel responded to Solomon, alleging that the complaint mischaracterized Boeing’s decision as a transfer of work when the South Carolina facility will be handling only “new work”. Meanwhile, the NLRB website contains a “Boeing Complaint Fact Sheet,” a “Fact Check” page to correct misconceptions about the case, and even a twitter account, @NLRBBoeingtrial, to keep the public updated as new documents are posted. Recently, the International Association of Machinists and Aerospace Workers (IAM), which represents employees at Boeing’s Puget Sound plant, released documents acquired via subpoena that allegedly show that Boeing’s decision to locate the Dreamliner production line in South Carolina was motivated by union animus.
Additionally, the Boeing complaint has become a national political issue. Some Congressional Republicans have called the NLRB’s action an attack on right-to-work states and the freedom of American companies to choose where they build plants. In May, House Republicans introduced the Job Protection Act,19 and Senate Republicans introduced their version, the Right to Work Protection Act,20 which would block the NLRB from moving forward with the Boeing case and from taking similar action against other companies who choose to transfer work. Both bills are still in committees. In June, sixteen state attorneys general filed an amicus brief claiming that the suit is “unprecedented” and will harm their states’ ability to attract new employers and jobs. In July, Rep. Tim Scott (R) introduced H.R. 2587, the Protecting Jobs From Government Interference Act, which would deprive the Board of the power to obtain an order requiring an employer to restore or reinstate work or production to a particular location. The proposal moved to the full House within two days of its introduction, and the House passed the bill on September 15.
Numerous Congressional committees have also requested information from the NLRB regarding the Boeing case, and at the direction of Representative Darrell Issa, (R-CA) the House Committee on Oversight and Government Reform insisted on Solomon’s presence at a June 17 field hearing in South Carolina and later issued a subpoena for more documents. Thirty-four law professors sent Issa a letter, urging him to allow the Board to “do its job without undue interference”, and democrats allege that the committee is improperly using its authority to circumvent labor law on behalf of corporate interests. While Solomon and the NLRB have supplied more than 5,000 pages of documents, they continue to resist turning over information that they claim could jeopardize the constitutional due process rights of the parties to the case.
The hearing on the Boeing complaint began on June 14 before an Administrative Law Judge in Seattle, Washington. To accommodate the high number of spectators, the hearing was to be moved from a traditional hearing room in a federal office building to a courtroom normally used by the U.S. Court of Appeals for the Ninth Circuit. On June 30, the ALJ denied Boeing’s motion to dismiss the ULP complaint. For the past several months, the parties have been engaged in a dispute over the production of documents related to the company’s decision to open the South Carolina production line. As of this writing, the NLRB trial has not yet commenced on the merits. Solomon recently announced that the hearing is being delayed in order to take subpoena issues to federal district court, and he could not provide an estimate on when the first witness may be called before the ALJ.
In fact, the hearing may never resume, as Boeing has made an early agreement for a new four-year contract with the IAM. In connection with the agreement, Boeing recently announced that it has decided to build its new 737 MAX aircraft in the Puget Sound region “pending approval of an early contract extension with [IAM].” This move offers job security to Washington-state Boeing employees who were unhappy with the decision to produce the Dreamliner in South Carolina. While only the NLRB’s acting general counsel has the authority to drop the ULP complaint against the company, the IAM has stated that if the agreement is ratified, it will ask that the complaint be withdrawn.
Liebman Out, NLRB Uncertainty In
On August 26 Chairman Liebman’s term expired, and she left the Board after serving for almost fourteen years. In her own words, the Board came “back to life after a long period of dormancy” during her term. Under her leadership, the Board sought to reverse decisions handed down during the Bush era, strengthen Board-ordered remedies, and significantly expand the scope of employee rights protected by the NLRA. The White House has designated Member Mark Pearce, a Democrat, to succeed Liebman as chairman.
Member Craig Becker’s term also expires at the end of 2011, which will leave the Board with only two members if Republicans delay efforts to fill open positions. This is significant because a two-member Board has no authority to act.21 Although NLRB regional offices could still adjudicate unfair labor practice cases, losing parties could effectively ignore the decisions of administrative law judges until the Board has a quorum again.
In preparation for the expected loss of quorum, the NLRB released a notice on November 8 delegating certain authority on a contingent basis to the agency’s General Counsel for periods when the board has fewer than three members. While the Board still will not be able to issue decisions or complete the rulemaking process for the proposed changes to representation election procedures that began in June, the order delegates to the General Counsel full authority on all court litigation matters and full authority to certify the results of any secret ballot election conducted under the National Emergency provisions of the Labor-Management Relations Act. The General Counsel will also have the authority to initiate and prosecute injunctions under Section 10(j) or Section 10(e) and (f) of the NLRA, bring contempt orders, and institute and conduct appeals to the U.S. Supreme Court.
Alternatively, President Obama could make a recess appointment to add a new member. However, in the past, Congress has refused to recess in order to prevent the President from utilizing recess appointments to bypass the U.S. Senate confirmation process, and it appears that Congress is taking steps to use this power once again to cripple the NLRB. As a result, as we approach the end of the year and the end of the Board’s quorum, there is likely to be a flurry of Board activity while its three remaining members are still able to conduct business.
Acting GC Looks Forward
The Acting General Counsel has issued a number of memoranda that should give parties an idea of what to expect in the coming months. He has said his office will take a close look at remedies in election cases, such as allowing a union access to an employer’s email system and non-work areas, and to have equal time to respond to captive audience speeches, as well as whether to award litigation or bargaining expenses in first contract bargaining cases.
He has also said he would entertain questions concerning an employer’s right to replace economic strikers if there was some proof of unlawful motivation (even if the strike was not an unfair labor practice strike) and the duty to supply information during bargaining. Stay tuned to see whether there will be further changes in the labor laws as a result.