Non-Union Workplaces Face New Employment Law Challenges From NLRB

Kristine Grady Derewicz

Corporate Counsel

11-07-2012

Just the name—the National Labor Relations Board—may evoke images of backroom negotiations, cigar smoke circling overhead, fists banging on the table while arguing over wages, "no layoff clauses," or mandatory overtime. A relic of days gone by? Think again. In fact, some of your company's most common and carefully crafted human resources policies may be in jeopardy as a result of recent decisions and initiatives from this agency.

Over the past year, the NLRB has demonstrated an interest in topics that extend well beyond its traditional bailiwick. The results of these efforts cannot be ignored by employers, even those that have no bargaining units and that operate in a business sector that rarely interacts with unions, the National Labor Relations Act, or the NLRB. Issues like confidential HR investigations, at-will statements in employee handbooks, mandatory arbitration programs, and social media policies must now be analyzed through the lens of labor laws, forcing employers to reconsider some well-entrenched and thoughtful policies due to concerns of violating employees' rights to engage in "protected, concerted activity."

First, a brief primer on the National Labor Relations Act. Section 7 of the act protects workers, whether represented by a union or not, from adverse action taken based on the employees' "concerted activities for the purpose of collective bargaining or other mutual aid or protection . . . ." Over the years, this provision has been interpreted to protect employees who engage, collectively, in conduct intended to discuss, promote, or protect working terms or conditions. 

Traditionally, of course, Section 7 protects those workers who campaign for a union. Less obviously, Section 7 also protects employees who complain about pay, safety hazards, or a less-than-pleasant boss. The key is that employees must act collectively; a lone employee does not receive the protection of the NLRA. 

Now, the Board is grappling with defining the type of conduct in the modern workplace that warrants the protection of the act. With considerable press coverage, a paramedic employee in Connecticut filed an unfair labor practice charge in 2010, claiming that her employer violated the act when it terminated her for comments she made on her Facebook page. The NLRB issued a complaint, grabbing the attention of many employers who never considered the effect of Board decisions on their workplaces.

Newsweek and other popular publications wrote about the case, focusing largely on the question, "Can my employer fire me for what I write on my own Facebook page?" The more interesting question (at least from the labor and employment lawyer's perspective) is, "When does a 'rant' on a Facebook page morph into protected, concerted activity?"

In the paramedic's case, the Board relied upon the fact that some of her co-workers commented on her post, thereby meeting the requirement of acting collectively. And the employee's comments, as well as those of her co-workers, focused on a disciplinary decision which historically has met the "terms and conditions of employment" standard. At this point, the Board was just dipping its toe into the water, and many more employers began to pay attention. 

Since the paramedic case, there have been three notable decisions or initiatives of the Board that have heightened the awareness of our HR colleagues and in-house employment counsel. The most well known is the NLRB's acting general counsel Lafe Solomon's advice memoranda analyzing social media policies, setting forth views on the types of provisions that restrict employees' Section 7 rights. For example, broad proscriptions against divulging confidential information (short of trade secrets), posting "inappropriate" statements, and exhortations for politeness (like "be respectful") have been deemed unacceptable by the acting general counsel. In more recent guidance, the acting GC has given employers some practical and effective advice regarding what can be included in social media policies, but any policy that was drafted and approved more than a year ago must be reconsidered, if compliance with the Board's advice is a priority.

In January 2012, the NLRB waded into another legal issue that, while hotly contested over the last decade, has seen a fair share of guidance from the U.S. Supreme Court—mandatory arbitration agreements encompassing class action waivers signed as a condition of employment. Consistently, the Supreme Court has supported employers' rights to implement these programs, grounded in the Court's recognition of the benefits of alternative dispute resolution and the right of an employer to define terms and conditions of employment. 

In D.R. Horton, Inc., the Board found that an arbitration agreement requiring "as a condition of employment" all employees to agree to waive the right to bring class or collective actions violated the NLRA. The Board's decision was based on the premise that an individual who initiates a class or collective action "seeks to initiate or induce group action and is engaged in conduct protected by [the act]." Although the Board cautioned that its decision was limited in application, and the decision is being challenged on many fronts, employers with arbitration programs must pay attention to this decision and interpretations of it by federal courts and other agencies. While it is unlikely that all mandatory arbitration programs will be found invalid under the D.R. Horton decision, the Board's approach cannot be ignored and, at least for now, should be considered when drafting and implementing mandatory arbitration programs.

Finally, two other key NLRB decisions shed a different light on previously unquestioned HR policies: at-will statements and the requiring of confidentiality during internal investigations. In two recent cases, the Board has taken a dim view of standard handbook language in which employees are reminded that they are employed at-will, that the terms of the handbook do not alter that status, and that the terms and conditions of employment can be changed only through an authorized change to the handbook's policies.

In fact, many states' court decisions mandate this exact language to avoid viable handbook-based breach-of-contract claims. Nonetheless, the Board held that this provision violated employees' Section 7 rights because it implies that employees cannot effect change through collective bargaining. Similarly, the Board recently ruled that a HR consultant's routine practice of asking employees involved in investigations not to discuss them with co-workers violated the NLRA. Specifically, the Board decided that the employer's interest in maintaining the integrity of its internal investigation was outweighed by the chilling effect on employees' Section 7 rights.

These final two issues reflect the potential infiltration of the Board's views into the most common and previously non-controversial approaches to basic concepts in employment law. To suggest that employee handbooks cannot describe clearly and unequivocally an employee's at-will status turns on its head the fundamental premise of any handbook: to explain to employees the rules and policies that inform the nature of their relationship to the employer. And to take away an employer's right to maintain confidentiality during internal investigations undermines the employer's duty to conduct fair and effective internal investigations into serious workplace issues. The NLRB's approach to these two issues suggests an unwillingness to recognize employers' obligations—beyond those duties set forth in the NLRA—to comply with complex and important legislative and judicially created mandates that present real challenges in today's workplace.

Kristine Grady Derewicz is a shareholder in the labor management relations practice of Littler Mendelson, the world's largest employment and labor law firm representing management. She represents employers in all aspects of labor and employment law in both union and non-union settings. Ms. Derewicz can be reached at (267) 402-3003 and kderewicz@littler.com.