The NLRB makes it hard to protect a company’s investment, which can be substantial, in its brand. A recent decision demonstrates the perils that employers can encounter for their brand during a labor dispute. The case involved the national sandwich franchise, Jimmy John’s, and one of its franchisees in the Minneapolis-St. Paul area.

The franchisee’s workers began a union organizing effort. One of the issues that employees wanted to address was a right to have paid sick days. The franchisee’s policy provided that employees could not “simply” call in sick, but instead had to arrange for someone to take their place. Employees did not receive paid sick days. Employees believed the policy encouraged employees to work while sick, which in turn posed health risks to consumers of the sandwiches the sick employees prepared.

To address this concern, employees prepared a poster (pdf) and a letter to the franchisee’s owner. The employees demanded a meeting to discuss the sick leave policy. Failure to have a meeting, the letter advised, would result in the employees putting up the posters in public areas near the franchisee’s stores. The union attempting to organize the employees also put out a press release, attaching a copy of the poster.

The employer responded by taking the posters down wherever they were found. The employer also terminated six employees and gave written warnings to three employees for participating in the poster campaign.

The NLRB held, in another 2-1 ruling, that the disciplinary actions taken were unlawful. When disparaging their employer’s product in the course of a labor dispute, employees lose the protection of the NLRA if their conduct is sufficiently “disloyal, reckless, or maliciously untrue.” The majority first reasoned that the employee’s conduct was directly connected with a labor dispute – namely, the employees’ concern about paid sick days. The poster explicitly referenced that policy and appealed for public support about the issue.

The majority next held that the poster was not reckless or maliciously untrue. The poster stated:  “SHOOT, WE CAN’T EVEN CALL IN SICK.” As noted above, that was not the employer’s policy. Citing a union-conducted survey of the franchisee’s employees, however, the majority forgave this misstatement because the poster conveyed, and intended to convey, the impression that employees “felt” compelled to work when they are sick. Moreover, the message was the type of “hyperbole expected and tolerated in a labor dispute.”

Lastly, the majority held that the poster was not sufficiently disloyal. It was not made during a critical time in the initiation of the franchisee’s business. It did not contain any “inflammatory language.” The message was focused entirely on the dispute over the sick leave policy. Finally, there was no evidence that the purpose of the poster was to inflict harm on the employer.

Member Johnson (R) dissented. He believed that the poster was maliciously false. The poster misstated the attendance policy, with which the employees would have been quite familiar. He attacked the union-sponsored survey that the majority relied upon, noting (among other things) that only 37 employees out of a workforce of 200 in 10 different stores responded. 

Member Johnson also found the posters disloyal. The central claim of the poster, that employees couldn’t call in sick, was false. The posters also greatly exaggerated the potential public health problem. Finally, the posters failed to show any “remotely reasonable correlation” between the alleged health problems and the lack of paid sick leave.

For companies worried about protecting their brands, the NLRB decision is a good reminder of how difficult that can be. The NLRB has always permitted employees some leeway when attempting to gain leverage or enlist support in a labor dispute. This most recent decision shows, however, just how much the current NLRB is willing to tolerate in the name of union organizing.