For the first time in a decade, the National Labor Relations Board ("NLRB") is staffed at full strength - with all five board member positions occupied. With the Senate's confirmation of the NLRB's full panel, the NLRB has more power to tackle difficult issues, set policy and pursue a rulemaking agenda. President Obama has nominated Richard Griffin, a former union lawyer and NLRB board member, as General Counsel of the NLRB. The Senate Labor Committee, voting largely along party lines, advanced his nomination in September. While Mr. Griffin won the support of only one of the committee's 10 Republicans, Senator Lamar Alexander, the committee's top Republican, said he had "no doubt" Mr. Griffin will be confirmed by the full Senate. At the same time, the Department of Labor has recently appointed a new Labor Secretary, Thomas Perez, who wasted no time in establishing an aggressive agenda. Both agencies are poised to implement significant rule changes and to pursue new enforcement initiatives which will impact companies operating in the US.
The NLRB's Focus on Non-Union Employers
Historically, the NLRB has focused on the rights of employees working in a unionized setting. As union membership has declined, so has the volume of activity before the NLRB. For the past few years, the NLRB has positioned itself to enforce the National Labor Relations Act ("NLRA") against non-union employers as well. The General Counsel has initiated a number of ground-breaking complaints alleging unfair labor practices against employees to further expand the NLRB's regulation of non-union workforces. With the full complement of Board members, it appears that enforcement activity against non-union employers will continue to be a primary focus.
Section 7 of the NLRA protects the rights of all employees covered by the act to engage in "other concerted activities for mutual aid and protection," which has generally been interpreted as a right to discuss wages, terms and conditions of employment, and working conditions. The law, however, applies to union and nonunion employers alike. A few particular topics are likely to be the focus of NLRB enforcement in the coming months and years:
- Social Media
Over the past few years, the NLRB has created for itself a new area of enforcement by entering the realm of social media. The frequency of decisions and advice memoranda in the area has continued to increase. The NLRB has looked primarily at two types of cases in relation to social media: (1) discipline or termination for an employee's protected comments via social media; and (2) overbreadth of the social media policy itself.
- Discipline for Protected Speech
Protection of Section 7 speech is nothing new, even when posted on social media. The NLRB has actively pursued Facebook-based discipline. The typical fact pattern involves a disgruntled worker complaining on Facebook about a supervisor or the employer itself, with other employees commenting on the statement. Recently, an Administrative Law Judge even held that an employee's clicking the "Like" button may itself be protected activity. Among the cases that have reached the NLRB for decision in the past few years, approximately half have been decided in favor of the employee engaging in protected speech. The general guideline that has emerged from a review of these cases is that an employee's comments on social media are generally not protected (i.e., the employee can be disciplined) if they are mere personal gripes not made in relation to group activity among employees
- Overbroad Policies
Even where an employee has not been disciplined under a social media policy, the NLRB may issue a an unfair labor practice charge when investigating an unrelated matter if it obtains a copy of the employee handbook and determines the social media policy is overbroad on its face. The NLRB's General Counsel has issued several reports on employee handbook compliance, each of which sets forth sample provisions that are likely not overly broad. As a general rule, however, employer policies should not be so sweeping (in the text of the policy or the enforcement) that they prohibit the kinds of activity protected by federal labor law, such as the discussion of wages or working conditions among employees.
- Confidentiality in Investigations
The NLRB has also held that employer policies requiring "blanket" confidentiality during investigations interferes with employees' Section 7 rights in violation of the National Labor Relations Act. In Banner Health System, the NLRB held that a policy requiring employee-witnesses to keep confidential all workplace investigations was overbroad and could impact an employee's ability to engage in protected speech relating to workplace issues. The Division of Advice has since released an Advice Memorandum, dated January 29, 2013, more fully setting forth the General Counsel's viewpoint:
An employer may prohibit employees' discussions during an investigation only if it demonstrates that it has a legitimate and substantial business justification that outweighs the Section 7 right. In Banner Health, the Board held that an employer must show more than a generalized concern with protecting the integrity of its investigations. Rather, an employer must "determine whether in any give[n] investigation witnesses need[ed] protection, evidence [was] in danger of being destroyed, testimony [was] in danger of being fabricated, and there [was] a need to prevent a cover up." Thus, a blanket rule prohibiting employee discussions of ongoing investigations is invalid because it does not take into account the employer's burden to demonstrate a particularized need for confidentiality in any given situation.
Fortunately, a need for confidentiality may be relatively easily articulated in most investigations. Based on the NLRB's decision in Banner Health and the Advice Memorandum, employers should identify particular confidentiality interests on a case-by-case basis to preserve the integrity of the investigation and include the reasoning for confidentiality when speaking to employees.
- At-Will Employment Clauses
The NLRB shocked the employment-law community in 2012 when an Administrative Law Judge held that common at-will language violated the NLRA. Since then, however, Advice Memoranda issued by the General Counsel have clarified the route for employers to avoid violating the NLRA with at-will clauses. In Fresh & Easy Neighborhood Market¸ the Division of Advice recommended that the following language did not violate the NLRA:
Nothing in this [Handbook] changes this at-will relationship, guarantees you a benefit, creates a contract of continued employment or employment for a specified term, or any contractual obligation that conflicts with the [Employer's] policy that the employment relationship with its employees is at-will.
No representative of the [Employer] other than a[n Employer] executive has the authority to enter into any agreement for employment for a specified duration or to make any agreement for employment other than at-will. Any such agreement that changes your at-will employment status must be explicit, in writing, and signed by both a[n Employer] executive and you.
Similarly, in Windsor Care Centers, the Division of Advice approved the following policy:
Only the Company President is authorized to modify the Company's at-will employment policy or enter into any agreement contrary to this policy. Any such modification must be in writing and signed by the employee and the President.
Essentially, the NLRB has drawn a bright line that policies that state that at-will status cannot be changed will violate the NLRA. Those, however, that allow for amendment, but only upon approval of a high-level employer representative or with other conditions, such as a signed, written agreement, are lawful.
The DOL's Focus on Misclassification and Wage & Hour Law Enforcement
In July, 2013, Thomas Perez was confirmed as the head of the Department of Labor. As the former Maryland Secretary of Labor and federal Justice Department attorney in the Civil Rights Division, Perez has a track record of aggressive pursuit of enforcement of workplace rights. It is likely that Perez will begin immediately with implementation of new regulations that have languished over the past few years and will follow with enhanced enforcement. Among the likely areas of increased regulation and enforcement are the following:
- Persuader Activity
The Labor Management Reporting and Disclosure Act ("LMRDA") generally requires financial reporting and disclosures by unions and employers for certain activities. Among those, the LMRDA requires employers to disclose any agreement or arrangement with outside labor relations consultants where the consultant undertakes activities to persuade employees to exercise or not exercise their right to organize a union and bargain collectively. Disclosure includes the amount of fees paid to the consultant. The consultant must disclose all of its labor relations clients and the amount of fees received. Traditionally, employers were able to avoid reporting attorney advice under an "advice exception." Under the DOL's previous enforcement practice, the advice exception covered virtually all outside attorney activity that did not involve actual contact with employees.
Under new regulations, initially proposed in July 2011, the "advice exception" will be dramatically pared down, and will only include very limited legal advice. The consequence is that the assistance employers previously received from attorneys will no longer be exempted and the fees for such services must be publically disclosed. The DOL has announced that it intends to implement the regulations in November 2013.
- Affirmative Action
On August 27, 2013, the DOL's Office of Federal Contract Compliance Programs ("OFCCP") published its final rules revising the regulations setting forth the affirmative action obligations of federal contractors and subcontractors with regard to disabled individuals and veterans. The final rules will become effective 180 days after the regulations are published, which is expected to occur in late September or early October, 2013.
- Individuals With Disabilities
The new rules impose significant new obligations on employers with federal contracts for disability-related hiring and recordkeeping, including:
- Quota of 7% of workforce utilization for individuals with disabilities
- Changes to applicant self-identification invitation requirements
- Changes to employee self-identification requirements
- Data collection and analysis obligations
- Annual self-evaluation of the effectiveness of outreach efforts
- Documentation of audit and reporting systems
- Revised subcontract clause inclusion
- Amended definition of "disability" to include ADA Amendments Act changes
The most difficult part of complying with the final rules will be achieving the 7% hiring quota. Many employers have a significant portion of their existing workforce who may qualify as "disabled" for the purpose of the quota and reporting obligations. A data collection initiative from current employees may prove to be very valuable when evaluating the employer's progress towards the quota.
- Veterans
The new rules also impose new obligations on employers with federal contracts with regard to hiring veterans, including:
- Annual hiring benchmark based on the national percentage of veterans in the civilian labor force
- Changes to applicant self-identification invitation requirements
- Clarification regarding job posting requirements
- Required notification to state employment services of contact information for hiring manager
- Data collection and analysis obligations
- Annual self-evaluation of the effectiveness of outreach efforts
- Documentation of audit and reporting systems
- Revised subcontract clause inclusion
- "Right to Know"
In 2010, the DOL announced that it intended to update the recordkeeping regulations under the Fair Labor Standards Act to require employers to prepare written explanations for the decision to classify an employee as exempt or an individual as an independent contractor. (Exempt employees do not receive overtime pay. Independent contractors are not considered employees). The DOL never followed through with the initiative, but it appears that similar regulations may be forthcoming under new leadership. The DOL has recently undertaken a "Worker Classification Survey" to collect information about employment experiences and workers' knowledge regarding classification decisions. The survey is set to conclude in March 2014, after which it is likely that the DOL will issue a notice of proposed rulemaking to address classification decisions.
Conclusion
With significant changes in the leadership makeup of the federal government's labor agencies, 2013 and 2014 will likely be tumultuous years for employers as more aggressive pro-employee and pro-organized labor agendas are implemented.
