In an en banc decision, the 8th U.S. Circuit Court of Appeals has overturned an earlier panel decision, which we reported on here, in MikLin Enterprises Inc. v. NLRB, in which the panel had upheld the NLRB’s finding that a Jimmy John’s franchisee had violated the rights of its employees under the National Labor Relations Act, when it fired them for hanging posters at their shops that suggested that the customers could be eating sandwiches that were made by sick employees in an effort to pressure the franchisee to adopt a paid sick leave policy.

In the en banc decision, the full 8th Circuit refused to enforce the NLRB’s unfair labor practice finding and held that an employer may fire an employee for “making a sharp, public, disparaging attack upon the quality of the company’s product and its business policies, in a manner reasonably calculated to harm the company’s reputation and reduce its income.” The court emphasized that “allegations that a food industry employer is selling unhealthy food are likely to have a devastating impact on its business” and that the fired MikLin employees made a conscious decision maximize this effect by choosing to launch their attack during flu season. The court added:

“By targeting the food product itself, employees disparaged MikLin in a manner likely to outlive, and also unnecessary to aid, the labor dispute. Even if MikLin granted paid sick leave, the image of contaminated sandwiches made by employees who chose to work while sick was not one that would easily dissipate.”

The court also found that the posters were “materially false and misleading” by stating that the employees were not permitted to call in sick. To the contrary, the evidence submitted to the Board demonstrated that the fired employees “knew that MikLin complied with state health department regulations by requiring employees to call in sick if they had experienced flu-like symptoms in the last 24 hours.”

The 8th Circuit’s decision in Miklin is controlling precedent only in the states governed by it (Minnesota, Iowa, North Dakota, South Dakota, Nebraska, Missouri and Arkansas.) Nevertheless, the decision may be persuasive in the other circuit courts and at the NLRB (which should have a majority of Republican appointed members in the relatively near future.) Employers should always use extreme caution when terminating employees for their actions taken during a labor dispute, but the MikLin decision should provide them with ammunition if the employees show extreme disloyalty by disparaging the employers’ products or services.