A number of significant decisions were issued by the National Labor Relations Board in 2012, including many in the final days of the term of member Brian Hayes. As of this writing, the board continues with only three members, all Democratic appointees: Chairman Mark Gaston Pearce and members Richard Griffin Jr. and Sharon Block. The recess appointments of Griffin and Block are currently the subject of court challenges on the ground that there was no valid recess when they were appointed. Also subject to court challenges are the NLRB’s rules on the mandatory notice posting of employee rights and expedited representation elections.
Separate and apart from the validity of these two NLRB rules, both of which involved unprecedented NLRB actions, and the recess appointments, the NLRB issued many significant decisions in 2012. Here is my list of the most significant ones, counting backwards from No. 8.
• 8. G4S Regulated Security Solutions, 358 NLRB No. 160 (September 28). A majority of the board found that nonunit lieutenants were not supervisors, notwithstanding testimony that they had the authority to administer discipline independently, and documentary evidence of eight disciplinary actions authorized by other lieutenants. The board found that the testimony was “too generalized” and conclusionary to evidence actual disciplinary authority. Hayes dissented, arguing that the evidence clearly established supervisory status based on the authority to discipline and that the board majority “effectively impose[d] a higher standard of proof on employers than is appropriate.” This decision signals the importance of not only providing specific, direct testimony regarding the indicia of supervisory status, but also of explicitly linking any such evidence to the putative supervisor’s exercise of independent judgment.
• 7. WKYC-TV Inc., 359 NLRB No. 30 (December 15). The board overturned a 50-year-old precedent when it held that employers will normally be obligated to continue deducting union dues pursuant to a contractual checkoff obligation even after the collective-bargaining agreement (CBA) expires. The board, with Hayes dissenting, overturned an opposite rule it had established in 1962, when it found that checkoff, like union security, was a creature of contract. See Bethlehem Steel, 136 NLRB 1500. Thus, unless the dues-checkoff clause of the CBA at issue clearly and unmistakably terminates with the CBA, an employer may not cease union dues deductions unilaterally after the expiration of the CBA.
• 6. Hispanics United of Buffalo Inc., 359 NLRB No. 37 (December 14). The board found that the employer unlawfully fired five employees because of their Facebook posts and comments about a co-worker who intended to complain to management about their work performance. One of the subsequently fired employees vented on Facebook that a co-worker “felt we don’t help our clients enough[.] I about had it. My fellow workers how do u feel?” Four co-workers responded that the criticism of their job performance was unfair.
The board ruled that the Facebook conversation was concerted activity that was protected, finding that a “mutual aid” objective in mobilizing other employees into mounting a group defense in response to criticism of their performance was “implicitly manifest from the surrounding circumstances.” Hayes dissented, finding there was no “evidence of a nexus for group action” because all but one of the fired workers were unaware that their co-worker had planned to complain to management. The standard set forth — to determine whether a mutual-aid objective is “implicitly manifest from the surrounding circumstances” — significantly broadens the one for concerted activity that is protected, both in the context of social-media postings and beyond.
• 5. Piedmont Gardens, 359 NLRB No. 46 (December 15). The board overturned a 34-year-old precedent when it held that employers may now be required to provide a union representing the employees at issue with witness statements obtained by an employer during an investigation of employee misconduct. It overturned a bright-line rule it had established in 1978. See Anheuser-Busch Inc., 237 NLRB 982.
The board found that a balancing test should be used for all future matters involving witness statements. Employers must first prove a legitimate and substantial confidentiality interest exists and that it outweighs the union’s need for information. If so, they must next raise their confidentiality concerns in a timely manner and bargain in good faith with the union about accommodating their confidentiality interests against the union’s need for the statements. Hayes dissented, stating that the Anheuser-Busch bright-line rule best protected witnesses from intimidation, coercion and retaliation. Employers will now ordinarily have to produce witness statements, which in turn may discourage employees from cooperating in internal investigations.
• 4. Finley Hospital, 359 NLRB No. 9 (September 28). The board required, based on the “dynamic status quo doctrine,” that an employer continue providing an annual wage increase beyond the expiration of the CBA, notwithstanding that the wage-increase provision of the CBA expressly provided that the wage increase would be provided “for the duration of this agreement” and was paid to employees on only one occasion before the CBA expired. Hayes dissented, stating that the proper statutory status quo for wages was the new wage “rate,” not the right to additional wage increases. He concluded that “employers must now bargain for contractual language expressly providing that no increase will be paid beyond the contract term…and unions have been given a powerful new weapon to use during negotiations.”
• 3. Banner Estrella Medical Center, 358 NLRB No. 93 (July 30). In a 2-1 decision, the board found that the employer’s practice of even asking employees making a complaint not to discuss the matter with their co-workers while the employer’s investigation was ongoing violated § 8(a)(1) of the National Labor Relations Act (NLRA) because the employer’s statement had the tendency to coerce employees, and the employer’s “generalized” concern with protecting the integrity of its investigation was insufficient to outweigh the employee’s § 7 rights. Hayes dissented, finding that management’s mere suggestion did not create a violation of the act. Moreover, to the extent the board’s holding applies to internal harassment investigations, it would appear to conflict with the existing guidance from the Equal Employment Opportunity Commission regarding confidentiality.
• 2. Alan Ritchey Inc., 359 NLRB No. 40 (December 14). In a 3-0 decision, the board held that when there is no collectively bargained grievance-arbitration system in place, an employer whose employees are represented by a union generally must provide the union notice and an opportunity to bargain before imposing discretionary discipline such as a discharge or suspension on unit employees, even when it does not alter broad, pre-existing standards of conduct. This decision overruled Fresno Bee, 337 NLRB 1161 (2002). The board reasoned that discretionary discipline, like other terms and conditions of employment, is a mandatory subject of bargaining, though it imposed a more limited bargaining obligation because of the unique nature of discipline and the practical needs of employers. Employers now have a duty to bargain over the discretionary applications of disciplinary policies, as well as a duty to maintain the existing policies governing terms and conditions of employment, such as disciplinary policies. This obligation may, in some areas, delay the employer’s actions or change the decision that it would have reached unilaterally.
• 1. D.R. Horton, 357 NLRB No. 184 (January 3), appeal pending at the U.S. Court of Appeals for the Fifth Circuit. The board held that an employer violated § 8(a)(1) when it required nonsupervisory employees to sign an agreement that precludes them from filing any joint, class or collective claims addressing their wages, hours or other working conditions against their employer in any forum, arbitral or judicial. The board reasoned that such an agreement unlawfully restricts employees’ § 7 right to engage in concerted action for mutual aid or protection, notwithstanding the Federal Arbitration Act (FAA), which generally makes employment-related arbitration agreements judicially enforceable. The board also held that an agreement requiring nonsupervisory employees to arbitrate all claims and waive their rights to bring actions in any other forum violates § 8(a)(1) because it interferes with employees’ access to the NLRB. The board concluded there was no conflict between federal labor law and policy and FAA and its policies. But it found that mandatory agreements to arbitrate individual, nonclass claims were permitted.
D.R. Horton significantly affects individual employment contracts with private arbitration provisions and raises questions about the validity of class action waivers in separation agreements. It is at least arguable that the holding conflicts with the FAA. It is therefore questionable whether it will ultimately be found that the NLRA prohibits employees from waiving their rights to collectively pursue litigation of employment claims in all forums, arbitral or judicial.
Kenneth R. Dolin is a partner at Seyfarth Shaw and a fellow in the College of Labor and Employment Lawyers.