The Trump National Labor Relations Board (NLRB) continues to reshape the National Labor Relations Act (NLRA or Act) with new decisions that reverse precedents and undo legal restrictions placed on employers during the Obama administration. Over the past week alone and coming on the heels of the current Board’s issuance of new more employer friendly election regulations, the Board issued three important cases that warrant management’s attention. What follows is a brief summary of these new cases and an explanation of how they are likely to effect the workplace.
Caesars Entertainment, 368 NLRB No. 143 (December 17, 2019) — The NLRB overrules Purple Communications and frees up employers to ban employees from using Company-owned computers during their non-work time to engage in protected concerted or union activities (PCA).
In Purple Communications, 361 NLRB 1050 (2014), the Obama NLRB invalidated an employer’s rule barring employees from making personal use of company email during their nonwork time, characterizing an employer’s email as a “natural gathering place” akin to a break room or an employee cafeteria where employees are free to communicate with one another as to matters of mutual workplace concerns and to engage in PCA. On Tuesday, in Caesars Entertainment, the Trump Board overruled Purple Communications, returning the law to where it had been and holding that, except in those very rare cases where employees have no other reasonable means of communicating with one another, employees have no statutory right to make use of a Company’s information technology resources or other employer equipment to engage in PCA. In the current Board’s view, Purple Communications was wrongly decided because it “demonstrated an unreasonable indifference to employer property rights” and citing the Supreme Court’s earlier admonition that the NLRA “does not command that labor organizations as a matter of abstract law, under all circumstances, be protected in the use of every possible means of reaching the minds of individual workers, not that they are entitled to use a medium of communication simply because the employer is using it.” Consistent with this principle, the current Board reaffirmed the long line of NLRB cases holding that there is no employee right to use employer-owned televisions, bulletin boards, copy machines, telephones or public address systems, adding company-owned email and computer networks to the list.
Caesars is an important decision because it reestablishes an employer’s right to declare its internal communications systems off limits to union activity and other forms of PCA. Although Caesars does specifically reach this issue, rules prohibiting such nonwork-related use of company equipment are enforceable and may be the basis for lawful discipline — as long as the rules are consistently applied to all or similar types of “off limits use” and not disparately applied only as to PCA.
Apogee Retail, LLC, 368 NLRB No. 144 (December 17, 2019) — The NLRB overrules Banner Health, allowing employers to require employees to keep workplace investigations confidential and banning them from discussing them with other employees.
An employer’s ability to conduct an effective and controlled workplace investigation has never been more important. Which is why the Obama Board’s 2015 decision in Banner Estrella Medical Center, 362 NLRB 1108 triggered so much controversy. There, the then Board held an employer’s general work rule instructing employees not to discuss on-going investigations with one another to be overly broad and facially invalid because, the employer’s work rule pertained to all workplace investigations and because, under the NLRA, employees have a right to discuss discipline or on-going disciplinary investigations involving themselves or coworkers. Instead, the Banner Board placed the burden on employers in proving on a case by case basis whether its interests in preserving the integrity of its investigation outweighed employee rights to discuss the investigation by presenting specific evidence that witnesses needed protection, evidence was in danger of being destroyed, testimony was in danger of being fabricated and there was a need to prevent a coverup.
On Tuesday, in a decision upholding the facial validity of Apogee Retail’s work rule requiring “reporting persons and those who are interviewed [in a workplace investigation] to maintain confidentiality” and prohibiting “unauthorized discussion of [an] investigation or interview with other team members,” the current Board overruled Banner because 1) the earlier decision ignored prior precedent requiring the Board to balance an employer’s legitimate business justification for such general confidentiality prohibitions and employee statutory rights, 2) failed to consider the importance of confidentiality assurances to both employers and employees during an ongoing investigation and 3) was inconsistent with federal guidelines encouraging the use of confidential workplace investigations. Instead, assessing the Apogee rules under the legal template created by the current Board’s 2017 decision in Boeing Co., 365 NLRB No. 154, and finding the rules adverse impact on employee rights to be comparatively slight and outweighed by the employer’s substantial and important justifications for the rule, i.e. the need to respond to theft through prompt investigations, the need to protect employee privacy and ensure no retaliation by others and the need to ensure the integrity of an investigation, the Board concluded that the rules were lawful insofar as they applied to open investigations. However, rules mandating continuing confidentiality after an investigation was completed, presented a far closer question which the Board could not decide on the stipulated record and which it returned to the administrative law judge for further consideration.
Apogee returns the NLRA to the mainstream of employment law by reconciling the competing interest among several federal and state laws regulating employment relationships. While it is true that employees have a right to communicate with one another and to discuss workplace investigations and resulting discipline, it is equally true that effective workplace investigations must be conducted and that confidentiality is an integral part of the investigative process. Under Apogee, employers may not maintain and enforce work rules that mandate confidentiality as to open investigations without fear of being second guessed by the Board. However, the jury is still out on rules that require confidentiality with respect to closed or completed investigations. A word to the wise, therefore, is to tailor work rules requiring confidentiality to apply only to open investigations. Alternatively, and absent such a limitation to open investigations, an employee arguably may need to prove a substantial and legitimate justification for having a confidentiality rule that also applies to closed investigations.
Valley Hospital Medical Center, 368 NLRB No. 139 (December 16, 2019) — An employer is free to unilaterally cease union dues checkoff after a CBA expires.
Section 8(d) of the NLRA establishes and defines the legal duty to bargain collectively. In 1962, in NLRB v. Katz, 369 U.S. 736, the Supreme Court held that this statutory duty requires an employer to refrain from unilaterally changing most working conditions while bargaining over a new CBA is ongoing unless, the parties are at a bargaining impasse. However, the NLRB also recognized certain contract-based exceptions to the Katz doctrine permitting or requiring the cessation of contract obligations upon a CBA’s expiration. These exceptions included contract provisions for no-strike/no-lockout clauses, arbitration procedures and management right clauses. From 1962 and until 2015, also included in these contract-based Katz exceptions that could be unilaterally changed once a CBA expired and in the absence of a bargaining impasse, were union security clauses requiring workers to maintain their union membership as a condition of continued employment and dues checkoff provisions calling for an employer to automatically deduct union dues and initiation fees from a worker’s paycheck and to remit same to the union. However, in 2015, the Obama Board overturned Board precedent in Lincoln Lutheran, 362 NLRB 1655, holding that the Katz unilateral change doctrine obligates an employer to continue dues checkoff after a contract’s expiration. Lincoln Lutheran was welcome news to labor for by requiring employers to maintain dues checkoff post expiration, the Board essentially guaranteed unions that their income stream would be maintained for as long as it took to reach a new labor agreement.
In Valley Hospital, the Trump Board dismissed unfair labor practice charges against an employer who unilaterally ceased dues checkoff following a CBA’s expiration, reversing the Lincoln Lutheran decision and returning dues checkoff provisions to the list of exceptions that fall outside the Katz doctrine. The Board reasoned that unlike most other terms and conditions of employment which must be maintained by operation of law, the duty to checkoff dues is rooted in the parties’ contract, rendering said obligation co-terminus with the term of the CBA providing for dues checkoff. Accordingly, once that CBA has expired and unless the bargaining parties affirmatively agree to maintain dues checkoff following contract expiration, an employer is at liberty to unilaterally cease checking off dues even in the absence of a bargaining impasse and notwithstanding Katz.
Valley Hospital is an important decision because of the effect it is likely to have on bargaining. Unions often employ stall and delay bargaining tactics to force employers to accept disadvantageous union demands. Indeed, after Lincoln Lutheran, unions had little need to get deals done quickly or before a CBA’s expiration since regardless of how long it took to get a new contract done, unions were guaranteed the continuation of their income stream. Now, with Valley Hospital’s rejection of Lincoln Lutheran, the bargaining dynamic is changed since a slow rolling union that procrastinates and drags out bargaining faces the possible disruption of dues until a new contract reinstating dues checkoff is reached.