HIGHLIGHTS:

  • The U.S. Court of Appeals for the Eighth Circuit's ruling in MikLin Enterprises, Inc. d/b/a Jimmy John's is based on Section 7 of the National Labor Relations Act (NLRA), which guarantees all employees – whether unionized or not – the right to engage in "concerted activities for ... mutual aid or protection."
  • In upholding the National Labor Relations Board's (NLRB) decision, the Eighth Circuit has constrained how employers may respond to disloyal employee communications to customers denigrating their products or services when those communications are undertaken by a group of employees as a tactic to advance their demands for better pay and benefits.

The Jimmy John's sandwich franchise must have been surprised to learn that it had violated federal labor law when it disciplined employees who had posted hundreds of signs around its outlets suggesting that its sandwiches might be germ-infested because they were made by a sick employee. That, though, is the recent ruling of the U.S. Court of Appeals for the Eighth Circuit in MikLin Enterprises, Inc. v. National Labor Relations Board, which on March 25, 2016, affirmed a 2014 decision of the National Labor Relations Board (NLRB) to that effect.

Employees Have the Right to Make Derogatory Public Statements

The legal basis for this seemingly bizarre decision is Section 7 of the National Labor Relations Act (NLRA), which guarantees all employees – whether unionized or not – the right to engage in "concerted activities for ... mutual aid or protection." According to the Eighth Circuit, which accepted the NLRB's rationale, this right includes making widespread derogatory public statements about an employer's products or services, provided only that the statements:

  • have some connection to a dispute concerning wages, hours or working conditions
  • have some element of truth
  • are not intentionally malicious

While Jimmy John's boxed itself into a corner by promulgating particularly heavy-handed personnel policies, this decision shows how far the courts will go in deference to the current NLRB's expansive scope of federal labor law to seemingly disreputable employee conduct and to all workplaces.

The case arose after an unaffiliated union, the Industrial Workers of the World (IWW), lost a union representation election. That loss apparently prompted a group of IWW adherents to approach a Jimmy John's executive asking for paid sick leave. The workers argued that employees were effectively required to work when they were ill, since the company failed to provide paid sick leave and also had a policy of forbidding workers to call in sick unless they found a replacement for their shift. This kind of group request for better benefits for themselves and co-workers is, in labor law parlance, "concerted activities for ... mutual aid or protection," even though it was not made by a legally authorized union. That brought the workers' dispute with management under federal labor law. It is clearly protected activity under federal labor law for groups of employees to publicize their disputes with management to companies' customers.

"Sandwich Test" Posters Represented a Way to Build Public Support

The protesting employees adopted a particularly clever approach. They prepared "sick day posters" that presented side-by-side photos of identical Jimmy John's sandwiches; one was labeled as having been prepared by a "healthy" worker and the other as having been made by a "sick" worker. The poster read:

Can't tell the difference? That's too bad because Jimmy John's workers don't get paid sick days. Shoot, we can't even call in sick. We hope your immune system is ready because you're about to take the sandwich test ... Help Jimmy John's workers win sick days.

When management learned that hundreds of the signs had been plastered in the neighborhoods around outlet locations, it (unsurprisingly) removed them, posted a notice asking for managers and employees to remove the signs they found, fired six workers who it felt were most responsible and issued final written warnings to three others.

Workers' Section 7 Rights

The Court of Appeals, in a 2-to-1 decision, ruled that these actions infringed on the workers' Section 7 rights. The decision rejected the employer's argument that disseminating the posters was "so disloyal, reckless or maliciously untrue as to lose [NLRA] protection," which is the legal standard established 60 years ago by the U.S. Supreme Court in NLRB v. Electrical Workers Local 1229 (Jefferson Standard), 346 U.S. 464 (1953). Rather, the court deferred to the NLRB's interpretation, finding this precedent inapplicable because 1) the posters at issue had some connection to the workers' dispute over the lack of paid sick leave, 2) the posters had some small element of truth insofar as the company's policy appeared to forbid workers from being absent due to illness unless they found their own replacements and 3) the restaurant's sandwiches had previously been cited as the source of a norovirus outbreak. The court credited the NLRB's interpretation that the blatant insinuation that you need a strong "immune system" to eat a restaurant's food is a legally protected way for restaurant workers to "solicit[ ] public support" for better pay and benefits.

The dissent argued that Jimmy John's had cause to fire the employees despite their involvement in a labor dispute because they (quoting the Supreme Court's Jefferson Standard decision) "deliberately undertook to alienate their employer's customers by impugning the technical quality of his product." The majority, however, saw this as nothing more than the "[e]xaggerated rhetoric [that] is common in labor disputes and protected under federal labor law."

The majority decision did not stop there. It also found that a co-owner violated the labor law by posting on a Facebook page encouraging others, including employees, to take down the "posters that threaten our business and your jobs." The court found that this statement "could be viewed as a threat of reprisal if employees did not take down the posters," which it determined constituted a protected communication to the public. As a result, this instruction interfered with employees' ability to exercise their Section 7 rights. The court affirmed the NLRB's holding that the employer could neither induce employees to participate in the removal of the posters nor discipline those who created and disseminated the signs.

Precedent Limits Employer Disciplinary Authority for Disloyalty

The Eighth Circuit's decision brings under the ambit of federally protected worker rights the public disparagement of an employer's business or products, making that a legitimate tactic that employees can use to advance their side of a labor dispute, as long as their comments are explicitly linked to the dispute. This precedent credits the current NLRB's viewpoint that employers should be constrained in how they may respond to disloyal employee communications, even those denigrating their products or services to customers, when those communications are made as a tactic to advance employee demands for better pay and benefits.