United States: The NLRB On What Employers Get Wrong

At Ward and Smith's recent annual Employment Law Symposium, two attorneys from the firm's labor and employment group, Grant Osborne and X. Lightfoot, interviewed Shannon Meares, a regional attorney with the National Labor Relations Board (NLRB).

Topics covered in the interview included:

• NLRB investigation processes,
• unfair labor practices,
• labor laws regarding social media posts,
• the impact of workplace rules on employee rights,
• and the legality of non-compete agreements.

For background, Osborne asked Meares to discuss the scope of the NLRB and some of the areas it covers concerning employee rights. The NLRB enforces the National Labor Relations Act (NLRA), which protects the right of employees to engage in concerted activity, even in a non-union setting.

"This essentially means that employees can band together to do what they believe is best to improve their working conditions in terms of employment," said Meares.

The NLRB frequently handles cases from employees who were fired for discussing wages. It is also not uncommon for the NLRB to receive complaints when employee handbooks prohibit certain employee rights, such as the right to unionize or band together.

Employees have the right to complain about benefits and wages to their supervisors. Discussing these issues with co-workers and seeking support for a walk-out is also permissible.

"In North and South Carolina, our bread and butter is concerted activity," noted Meares. "We get a lot of these types of cases."

Coverage and Processes

Employees can file charges with the NLRB alleging unfair labor practices (ULPs), potentially leading to an investigation and resolution. Notably, the NLRB only applies to private-sector employers, universities, healthcare institutions, and contractors. It excludes government employees and railway and airline workers.

Employees who feel their rights have been violated can file an unfair labor practice charge with the NLRB's regional office online. An officer of the NLRB would then conduct an investigation, gathering sworn statements from the employee and any available witnesses.

The next step from the NLRB is the creation of an allegation letter. This describes the allegations from the employee and asks the employer for an explanation, as well as applicable documentation. The NLRB issues a complaint if any merit is found in the allegation.

"Unlike the EEOC, we actually litigate our cases," added Meares. "We don't issue right to sue letters."

The parties are given a chance to settle before the NLRB issues a complaint. If the matter isn't settled, then it will go to trial, where an administrative law judge will hear it.

Unions in North Carolina

Unions are somewhat uncommon in the Southeast; however, a move toward unionization has been increasing in North Carolina, said Lightfoot. A union has to file a petition with the NLRB to represent employees, but at least 30 percent of the employees have to show interest before filing.

Before moving forward, unions typically seek to gather support from a larger majority. "From a practical standpoint, some unions have said they won't file a petition unless they have about 75 percent. That's because they know they will lose support during the campaign," explained Meares.

"The law for decades actually said employers could simply refuse a request to unionize from a group of employees," stated Osborne. "But now, if approached with a majority, employers themselves have to file a petition or have an election within a certain period?"

"Yes, 14 days," said Meares. After a union is certified, employers are required to bargain in good faith unless they can prove the election was tainted by objectionable conduct, in which case another election may be required.

Protection for Social Media Posts?

Lightfoot then asked Meares to discuss whether social media posts from employees complaining about a workplace would be considered Protected Concerted Activity (PCA). In terms of social media, the NLRB reviews several key questions to determine if an activity would be protected, such as:

• Was the post in a group setting?
• Could it be a logical outgrowth of prior concerns raised by employees?
• What happened prior to the post?
• Was the post in a private group?
• Does the author seek to induce group action?

If the answer to any of the questions were yes, it could be that the employee engaged in protected concerted activity. However, a post can fall outside the realm of PCA if it boils down to a gripe, a defamatory statement, a maliciously false statement, or a willful misrepresentation of an employer's products.

Employers seeking to discipline or fire an employee for a social media posting should be cautious. If a social media post could be considered a reasonable or apparent catalyst for an adverse employment decision, it is likely the employee will file a claim with the NLRB, as doing so is convenient and free.

Policies and Handbooks

The NLRB is also involved in analyzing the legality of rules, even in a non-union setting. "We get a lot of charges related to handbooks," noted Meares, "and I think it is just because there are a lot of easy mistakes to make."

In a recent case with Stericycle Inc., the NLRB adopted a new legal standard for evaluating employer work rules and policies that are challenged as being facially unlawful under Section 8(a)(1) of the NLRA. The new standard requires the NLRB's General Counsel to prove that a challenged work rule has a reasonable tendency to chill employees from exercising their Section 7 rights (e.g., the right to self-organization, to form, join, or assist labor organizations, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection as well as the right to refrain from such activities). Under the new standard, the challenged rule or policy is presumed unlawful if the General Counsel satisfies her burden of proof. Employers may rebut this presumption by proving that the challenged work rule or policy advances a legitimate and substantial business interest of the employer and is narrowly tailored to address such legitimate interest. Assuming the employer can make such a showing, the challenged work rule or policy will be found lawful.

Prior to the new Stericycle standard, the NLRB evaluated two things in determining whether an employer's "facially neutral" work rule or policy was lawful: (1) the nature and extent of the potential impact on employees' NLRA rights; and (2) the employer's legitimate justifications associated with maintaining the rule. The goal was to balance employees' rights to engage in PCA or unionization with the employer's legitimate need to run its business and maintain decorum and/or stability.

"Under the balancing test, rules basically fell into three different categories," Meares explained. The first category encompasses rules in which the employer's right to operate its business outweighs the right of the employees to engage in PCA. "Category 1" rules were always lawful for employers to maintain.

As an example, under this category, Meares said it would be lawful for an employer to prohibit the use of phones in the workplace. "Category 2" rules, however, were sometimes lawful to maintain and were reviewed on a case-by-case basis. The judgment for a "Category 2" rule would depend on the employer's justification for the rule.

"Category 3" rules were always unlawful for employers to maintain. Examples would include prohibiting the discussion of wages or sharing a company handbook based on the justification that it is company property.

Under the new standard, "the question is, could a reasonable employee interpret the work rule or policy as prohibiting or interfering with the employee's rights? If the answer is yes, then the General Counsel will have satisfied her burden, and the rule will be presumed unlawful unless the employer is able to rebut this presumption," added Meares. The employer could have good intentions in maintaining the unlawful work rule or policy, but the employer's intent is immaterial.

"The takeaway is that employers should carefully analyze what they were trying to accomplish with a rule, and tailor their rules as narrowly as possible to the legitimate business interest," advised Lightfoot.

Real-world examples could include a written policy advising employees to have a positive attitude or a precedent allowing employees to wear buttons. In a case where employees started wearing buttons advocating for the formation of a union, it would be unlawful to suddenly prohibit wearing buttons if doing so was permissible in the past.

Similarly, firing employees for organizing a walk-out would be unlawful. On its face, an attendance policy is completely benign, said Meares. In a case where ten employees walked out in protest of working conditions, it would be unlawful to write them up for attendance infractions or fire them because it could be seen as discouraging their Section 7 rights.

Employers should exercise caution, as punitive damages for employees could include back pay and foreseeable pecuniary harm, which is essentially consequential damages.

Non-Compete Agreements

A recent memo from the NLRB General Counsel (GC) outlined how non-compete and severance agreements may interfere with Section 7 rights for employees. The GC is currently arguing that it is unlawful to have employees sign agreements that limit their ability to work for a competitor for a year after employment.

"The premise is you can't waive away your essential set of rights," commented Meares. If an agreement is too broad, it can be interpreted as denying the employees' right to quit and/or limiting their access to future employment.

The memo does not refer to executive-level non-compete agreements. The argument from the GC is that non-compete agreements should be unlawful for employees for a number of reasons, including that they limit the ability of employees to organize a walk-out in protest of working conditions.

This is due to the fact that the employees, in this case, may not have anywhere else to go. Similarly, non-compete agreements are being viewed as limiting an employee's ability to threaten to resign as a strategy for improving conditions or receiving a pay increase.

Another argument the GC is making is that non-compete agreements impede the ability of employees to organize and seek employment from competing organizations.

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