In a notable decision, the National Labor Relations Board (NLRB or Board) applied its controversial Specialty Healthcare ruling to direct an election for a 41-person group of cosmetics and fragrance sales employees at a Macy’s retail store in Saugus, Mass. Macy’s had argued, among other things, that the proposed unit was inappropriate because it was not “readily identifiable as a group,” did not share a “community of interest,” and would create a “fractured” workforce. The Board, in a 3-1 decision, rejected those arguments and found the unit appropriate under Specialty Healthcare and existing rules for proposed bargaining units in the retail sector. Macy’s Inc. and Local 1445, United Food and Commercial Workers Union. See our client briefing for more details, NLRB Rules That Micro-Unit of Macy Workers Share a “Community of Interest.”

The NLRB rejected a bargaining unit made up of workers in women’s shoe sales at The Neiman Marcus Group Inc.’s Manhattan Bergdorf Goodman store, finding the unit was not appropriate since it did not resemble administrative or operational employer-drawn lines. The unit at issue was previously deemed appropriate by an NLRB regional director under Specialty Healthcare. Neiman Marcus argued that the unit was “fractured” because it combined sales workers in the “Salon shoes” group and the contemporary shoes section. Neiman Marcus Group Inc. d/b/a Bergdorf Goodman.

The U.S. Court of Appeals for the Seventh Circuit held that Unite Here may be liable for labor law violations if it engaged in trespassing or harassed secondary organizations. The lawsuit arose when 130 Unite Here Congress Plaza Hotel & Convention Center room attendants went on strike. During the strike, the hotel sued Unite Here for alleged labor law violations and damages under the Labor Management Relations Act (LMRA). Specifically, the hotel alleged that picketers harassed organizations that had reserved space in the hotel, causing some to cancel bookings. Reversing the district court, the Seventh Circuit found a factual determination was necessary regarding whether union behavior, including distribution of literature and threats of disturbance, would qualify as harassment or trespassing. 520 South Michigan Ave. Assoc. v. Unite Here Local 1.

The Eleventh Circuit affirmed a jury verdict finding that a firefighters’ union in Pasco County, Fla. was liable for retaliation because it had issued a memorandum calling for revenge against two workers who had filed charges with the Equal Employment Opportunity Commission (EEOC) against a former supervisor and the county. The memorandum named the two individuals, discussed the EEOC charges, and discussed the likelihood of increased union fees due to the litigation. The two employees sued the county and the union claiming violations of the Florida Civil Rights Act and Title VII. The jury returned a verdict in their favor, but the judge granted the county judgment as a matter of law, finding insufficient evidence of a retaliatory motive. On appeal, the Eleventh Circuit reversed, finding that the judge had improperly overturned the jury’s verdict. The circuit court also held that the First Amendment did not shield the union’s memorandum because it did not qualify as a matter of public concern. Booth, et al. v. Pasco County, Florida, et al.

The Fifth Circuit confirmed that a labor arbitrator had the authority to determine what disciplinary action was appropriate where a United Steelworkers/Delek Refining LTD collective bargaining agreement allowed the employer to discipline employees for just cause. The employee at issue was charged with mishandling products on at least four occasions and was warned that any other issues would result in termination. He was eventually discharged in 2008 for ignoring instructions and transferring almost 13,000 barrels of “slop oil” into a refinery tank. The Steelworkers grieved the discharge, arguing the employee had actually followed instructions on that occasion. The arbitrator sustained the grievance, concluding that termination was not appropriate, but rather a two month suspension was justified. The company refused to abide by the arbitrator’s ruling, and the union subsequently filed an enforcement action under the LMRA. The Fifth Circuit concluded that the arbitrator had authority to determine an alternative remedy for contract violations where the contract that gave the employer the ability to institute various disciplinary actions. United Steelworkers v. Delek Ref., Ltd.

The NLRB upheld an Administrative Law Judge’s (ALJ) finding that Illinois Consolidated Telephone Co. violated the National Labor Relations Act (NLRA or Act) by suspending and firing four Consolidated employees for alleged picket-line misconduct during a December 2012 strike, where the punished employees’ alleged misconduct was not legitimate grounds for discharge or suspension. The conduct at issue included one employee grabbing his crotch and other harassment of nonunion employees, including by “bookending” a manager between cars. The NLRB ordered Consolidated to reinstate the discharged employees and provide make-whole relief. Consolidated Communications d/b/a Illinois consolidated Telephone Company and Local 702, International Brotherhood of Electrical Workers, AFL-CIO.

An NLRB ALJ dismissed a complaint brought by a former Bubba Gump Shrimp Co. server in Monterey, Calif., ruling that Bubba Gump and parent company Landry’s expired social media policy did not violate the NLRA. Bubba Gump’s social media policy at issue instructed workers not to post information regarding their jobs, the company, or other employees that could create morale issues or negatively affect Bubba Gump’s business. The server alleged that this policy prohibited employees from discussing jobs online, therefore chilling employees’ NLRA Section 7 rights. The NLRB’s Regional Office concurred and filed a complaint. However, the ALJ disagreed with the allegation and found that purpose of the policy was not to forbid speech regarding employment, but, rather to curb morale problems by dictating the manner in which job-related issues could be discussed. This decision appears to be somewhat in conflict with other recent NLRB decisions arising in the social media context, underscoring the fact-specific nature of the issue and the Board’s analysis. Landry’s Inc., et al. v. Sophia Flores.

The NLRB found that Auto Nation violated the NLRA when an executive threatened the loss of existing benefits at an Illinois Toyota facility during an organizing campaign in order to discourage unionization, and split 2-1 finding that Auto Nation violated the NLRA when an executive unlawfully promised wage increases if workers did not unionize. NLRB Member Philip A. Miscimarra dissented on the second point, finding that the comment at issue was about wanting to address wage issues, not an implied promise to increase wages. The Automobile Mechanics Local 701 (part of IAM) alleged that Auto Nation violated the Act by threatening employees that it would be futile for them to unionize because other workers in Florida had voted for unionization but still did not have a collective bargaining agreement in place three years after unionizing, that employees would lose benefits if they unionized, and that wage increases would be implemented if they did not unionize. Auto Nation, Inc.

The NLRB will not seek Supreme Court review of the Fifth Circuit’s rejection of the Board’s D.R. Horton ruling, which held that mandatory arbitration agreements that prohibit class actions violate federal law. The Second, Eighth, and Eleventh circuits have also refused to follow the D.R. Horton decision. D.R. Horton, Inc. v. NLRB.

The majority of a divided NLRB ruled that UniFirst Corp. interfered with a representation election by leading employees to believe they would obtain 401(k) benefits and profit-sharing plan for decertifying United Steelworker representation. The NLRB found that UniFirst specifically linked the benefits to voting for decertification. Member Harry I. Johnson dissented from the majority’s ruling, finding that UniFirst merely informed employees of “historical facts” about benefits available to unrepresented employees. UniFirst Corp.

A Superior Court judge in Lake County, Ind. recently upheld the United Steelworkers’ constitutional challenge to the Indiana’s 2012 right-to-work law, which precludes nonunion workers from having to pay union dues. According to the court, the right-to-work law violated the state constitution because it violated a prohibition of demanding services without just compensation. This was the second state court in Indiana to have ruled that the law is constitutionally infirm. In September 2013, another Indiana Superior Court judge held that the law was constitutionally unsound based on services rendered for unjust compensation. The law in that case was challenged by the International Union of Operating Engineers, and it is currently on appeal before the Indiana Supreme Court. United Steel, et al. v. Zoeller, et al.

An NLRB ALJ held that Mercedes-Benz U.S. International Inc. could not prevent employees from distributing union literature in an area within an Alabama manufacturing plant that served dual work and non-work purposes. Specifically, the work area in question included computers, offices, and files, but also break paraphernalia such as refrigerators, microwaves, and picnic benches. The ALJ concluded a policy in Mercedes-Benz’s handbook that barred team members from distributing non-work related materials during work time or in work areas unlawful.  The ALJ cited Superior Emerald Park Landfill, LLC, for the proposition that the NLRA requires that employers allow distribution in areas that are used for both work and non-work purposes. While there is an exception for mixed-use areas near production facilities, there was insufficient evidence in this case to substantiate this argument. Mercedes-Benz U.S. Int’l, Inc.

A district judge in New York denied the International Union of Operating Engineers (IUOE) Local 14’s motion for judgment on the pleadings, holding that the LMRA does not preempt New York state law discrimination claims. The court found that rights under the New York City Human Rights Law (NYCHRL) are independent from collective bargaining agreements between city trade groups and Local 14 that require contractors to hire union members. Five minority workers alleged that the union violated the NYCHRL, Title VII, and the Civil Rights Act of 1866 by engaging in a pattern or practice of intentional race discrimination in evaluating prospective members, executing its apprenticeship program and filling requests for city contractor union jobs. Morrison v. Operating Eng’rs Local 14-14B.

A Western District of Tennessee court ordered Kellogg Co. to end a nine-month worker lockout at a Memphis, Tenn. cereal plant, finding that the company’s demand to change new and rehired unionized workers’ wage rates constituted an unfair labor practice. The court ordered a temporary injunction, requiring Kellogg to allow workers to come back within five days. NLRB v. Kellogg Co.

The Wisconsin Supreme Court ruled (5-2) to uphold Act 10, a state law that delineates procedures, obligations, and rights of collective bargaining by holding that it does not infringe on employees’ constitutional right to freedom of association. In doing so, it reversed the September 2012 state court judge’s decision that some provisions violated plaintiffs’ rights under the Wisconsin and U.S. Constitutions. The Seventh Circuit previously shot down constitutionality challenges to Act 10 in January 2013 and again in April 2014. Madison Teachers Inc., et al. v. Scott Walker, et al.

The NLRB held that California grocery chain Fresh & Easy Neighborhood Market’s confidentiality and data protection provisions in its code of conduct, which instruct employees to keep employee information secure and to use it lawfully, violated the NLRA because employees could interpret it as banning discussions of employment

conditions and wages. Member Harry I. Johnson, dissenting, stated that the overall context should dictate whether the employees would view the requirement as precluding protected activity. Here NLRA would not be chilled, because in the context of the entire code of conduct the provision at issue addressed ethical concerns rather than employment circumstances. Fresh & Easy Neighborhood Market.

New Jersey Local 25 of the Sheet Metal Workers’ International Association (SMWIA) reached settlement with the EEOC resolving discrimination claims arising from a black trainee’s termination from the union’s Joint Apprenticeship and Training Committee. SMWIA agreed to pay $34,500 and change its policies regarding how to handle alleged discrimination. The EEOC said it will continue to monitor Local 25 for compliance with previous orders dealing with its race and national origin discrimination in its apprenticeship program.