On June 24, 2015, the National Labor Relations Board (NLRB) issued a new decision involving allegations that an employer had unlawfully discharged an employee who had scrawled sexually-oriented obscenities and threatening statements on the face of union literature. In Fresenius USA Manufacturing, Inc., NLRB Case 02-CA-039518, the Board dismissed a complaint that the employer had violated Sections 8(a)(3) and 8(a)(1) of the National Labor Relations Act (NLRA) by firing the employee whose statements were directed at female employees who the offending employee feared would vote against the union in a decertification election. According to the complaint, the company initiated an investigation after receiving complaints by female employees and the discharged employee lied about his actions during a subsequent investigatory interview.

Previously, on September 19, 2012, the NLRB reached the opposite conclusion, holding that the offending statements and subsequent lies were protected under Section 7 of the Act and that the employer had violated Sections 8(a)(3) and 8(a)(1). The NLRB then ordered reinstatement of the employee.

Former Board Member Brian Hayes (who is currently a shareholder in the Washington D.C. office of Ogletree Deakins) filed a vigorous dissent protesting the Board majority’s decision that employees have a protected right to lie during a lawful interrogation about alleged sexual harassment in order to conceal union activity.

Hayes also wrote:

Taken as a whole, these pronouncements [Board majority’s decision] confer on employees engaged in Section 7 activity a degree of insulation from discipline for misconduct that the Act neither requires nor warrants. Predictably, we will see these pronouncements unloosed from their factual foundation and applied broadly in future cases. Notwithstanding their disavowals, my colleagues thereby impermissibly fetter the ability of employers to comply with the requirements of other labor laws and to maintain civility and order in their workplace by maintaining and enforcing rules nondiscriminatorily prohibiting abusive and profane language, sexual harassment, and verbal, mental, and physical abuse.

The Board’s original decision drew a fire storm of criticism from the employer community, which asserted that it gave employers a mere Hobson’s choice between complying with Title VII of the Civil Rights Act of 1964 and Section 7 of the NLRA. In particular, employers would be required to choose between, on the one hand, complying with the Equal Employment Opportunity Commission’s (EEOC) sexual harassment rules and the sexual harassment/hostile work environment mandates of Title VII, which were triggered by the female employees’ complaints to the employer, and, on the other hand, complying with Section 7, which protects certain conduct that occurs during concerted activity, such as the decertification campaign in this case. Employers also asserted that the offending employee’s conduct in Freseniuslost Section 7 protection both because of the sexual harassment and threats as well as the offending employee’s lies to cover it up during the employer’s legitimate investigation.

Fresenius appealed the Board’s decision to the District of Columbia Circuit Court of Appeals, and the General Counsel petitioned for enforcement. However, the court held the case in abeyance until after the ruling of the Supreme Court of the United States in National Labor Relations Board v. Noel Canning, which challenged the constitutionality of the “recess appointments” of the Board Members who made up the majority’s decision. Following the Noel Canningdecision, which ruled that the recess appointments were unconstitutional and therefore that all Board decisions by the invalidly-appointed Board were void, the Fresenius decision was vacated and the case, like many others, was remanded to the Board for de novo reconsideration.

On remand, the Board undertook de novo review of its prior decision and this time found that Fresenius had not violated the Act by discharging the offending employee who had inadvertently confessed by mistakenly making a telephone call to management rather than his union representative (but who still asserted that he was not the caller when he discovered his error). The Board deciding the new Fresenius decision found Fresenius had investigated and discharged other employees for lying outside of the context of union activity. Thus, the NLRB found that the employer had fulfilled the Board’s Wright Line analysis in that it would have taken the same actions even in the absence of union activity. As a result, the NLRB concluded that the employer had not engaged in anti-union discrimination.

However, the Board begrudgingly did not rule that the sexually harassing and threatening statements scrawled on the union literature lost their protection under the Act. Instead the NLRB upheld the discharge based on the employee’s dishonesty. The Board’s new decision stated: “however, we conclude that, even assuming, without deciding, that the handwritten statements retained the Act's protection, Fresenius lawfully discharged [the employee] for his acts of dishonesty.” Even so, the Board noted that lying still may be protected by the NLRA if it was done in order to conceal union activity. In a footnote, Member Harry Johnson protested that he would not have found the offensive statements to be protected.

Significance of the New Decision

The Board’s new Fresenius decision implies that the Board’s previous decision incorrectly found that lying during a lawful investigation was protected activity even when, as here, the investigation did not involve a search for union activity. Nevertheless, the Board begrudgingly maintained that the handwritten statements in this case might not lose the Act’s protection and that under other circumstances not present here even lying to an employer may also be protected.