Many non-unionized employers remain blissfully unaware that they are bound by various provisions of the National Labor Relations Act (“NLRA”) – in particular, those protecting the rights of non-supervisory employees to engage in “protected concerted activity” (i.e., employees acting together for their mutual aid and protection). Failing to keep abreast of pronouncements by the National Labor Relations Board (“NLRB”), however, is becoming an increasingly risky practice for otherwise savvy companies. Over the past year, with the pronounced goal of enforcing protected concerted activity rights, the NLRB has taken an alarmingly activist approach to interpreting the NLRA on topics including internal investigations, class action waivers and social media policies. To remain compliant with the law, employers must analyze their policies and procedures in response to these recent pronouncements and be on the lookout for further rulings from the NLRB.
Confidentiality During Internal Investigations
On July 30, 2012, in Banner Health Systems v. Navarro, the NLRB declared unlawful an employer’s policy of requesting employees to refrain from discussing all ongoing internal investigations with co-workers as an illegal restraint on non-supervisory employees’ right to engage in protected concerted activity. In the weeks following the release of the NLRB’s ruling, many employers have incorrectly interpreted it to believe that they no longer can require confidentiality under any circumstances. To the contrary, the Banner Health ruling merely outlawed blanket confidentiality requirements; where there exists a specific legitimate business justification for a confidentiality instruction, an employer should not run afoul of the NLRA by imposing such a rule. For example, in Banner Health, the NLRB recognized that prohibitions on employee discussions of ongoing investigations may be justified where the employer can make a specific showing that (1) witnesses need protection; (2) evidence is in danger of being destroyed; (3) testimony is in danger of being fabricated; or (4) there is a need to prevent a cover up. Likewise, the NLRB did not overrule prior decisions in which it sanctioned the use of confidentiality restrictions to protect the attorney-client privilege and where appropriate in connection with, among other issues, internal investigations of harassment/discrimination complaints, workplace theft, and employee drug use. In light of the NLRB’s ruling in Banner Health, employers should amend any policies or procedures whereby employees are instructed to maintain confidentiality in all internal investigations. Instead, each internal investigation should be judged on its own merit; if a specific legitimate business justification exists for imposing a confidentiality instruction, employers should not hesitate to do so. A policy which, for example, states, “Assuming a legitimate business reason exists, the Company may require that the investigation be kept confidential”, would be acceptable so long as the employer analyzes each investigation individually before imposing a confidentiality restriction.
Class Action Waivers
In January 2012, in D.R. Horton, Inc. v. Cuda, the NLRB held that employers may not require their employees, as a condition of employment, to sign an agreement precluding them from filing class action claims when those claims address wages, hours, or other working conditions. In reaching its decision, the Board essentially ignored the Supreme Court’s landmark 2011 decision in AT&T Mobility LLC v. Concepcion, which held that arbitration agreements prohibiting individuals from commencing or participating in class actions are generally enforceable under the Federal Arbitration Act.
The D.R. Horton decision has created significant consternation for many employers who, in light of Concepcion, required their employees to sign arbitration agreements, coupled with class action waivers, as a condition of employment. The decision has likewise been met with resistance from the courts. Rejection of D.R. Horton has not been universal, however, and employers should, for now, expect some uncertainty (and risk) when attempting to enforce broad class action waivers.
Social Media Policies
Even company social media policies have not escaped the NLRB’s scrutiny. In May 2012, the NLRB’s Acting General Counsel issued a report warning that many provisions routinely included in social media polices -- such as blanket restrictions on the publication of confidential information and rules requiring a professional tone in online posts -- may violate the NLRA by inappropriately restricting protected concerted activity rights. Thereafter, on September 7, 2012, the NLRB issued its first decision concerning a specific employer’s social media policy, determining that Costco Wholesale Corp.’s policy prohibiting employees from electronically posting statements that “damage the Company . . . or damage any person’s reputation” was impermissible under the NLRA as an unlawful restraint on protected concerted activity rights.
In light of the NLRB’s decision, employers should review their policies and ensure that their social media policies cannot be read to impose an undue burden on employees’ protected concerted activity rights. For example, when drafting social media policies, employers should understand that a general, non-specific confidentiality restriction, or a blanket ban on an employee’s posting of disparaging comments or unprofessional communications, would likely be deemed unlawful by the NLRB. The NLRB has posted on its website a copy of a sample acceptable social media policy.
All employers – unionized or not – must pay close attention to the holdings of an increasingly activist NLRB. Although many of the NLRB rulings will be challenged in the courts, employers should not make any assumptions concerning the enforceability of these NLRB rulings. We will continue to update you as to any major pronouncements from the NLRB to help you navigate the increasingly challenging legal environment for employers.