For many nonunion employers, mere reference to the National Labor Relations Act can be seen as an invitation to tune out until the discussion turns back to "employment law." Contrary to popular belief, however, "labor" does not equate to "union," and the law applies to most private-sector businesses regardless of whether a union is present. Indeed, the cornerstone of the NLRA, Section 7, guarantees employees the right to engage in concerted activity for mutual aid and protection regardless of whether they are represented or seek to be represented by a union. 29 U.S.C. 157. An employer's denial of these rights poses potentially serious monetary and other consequences.
President Obama's National Labor Relations Board has been active in finding new and creative contexts to apply the broad language of Section 7 in nonunion settings, even as the level of private-sector unionization continues to decrease. Although the viability of recent board decisions has been called into question by court decisions invalidating recent appointments of some members — Noel Canning v. NLRB, 705 F.3d 490 (D.C. Cir. 2013), certiorari granted, No. 12-1281 (U.S. June 24, 2013), petition for reh'g filed July 1, 2013 (3d Cir.); and NLRB v. New Vista Nursing and Rehabilitation, No. 11-3440 et al. (3d Cir. May 16, 2013) — many of the recent expansive decisions issued by the board affect nonunion workplaces. This article describes some of those developments affecting nonunion employers and identifies "best practices" for complying with these decisions.
Many employers include arbitration provisions containing class-action waivers in their employment policies. The use of such agreements was sanctioned by the U.S. Supreme Court in AT&T Mobility v. Concepcion, 131 S. Ct. 1740 (2011). The board's decision in D.R. Horton Inc., 357 NLRB No. 184 (January 3, 2012), which is on appeal to the U.S. Circuit Court of Appeals for the Fifth Circuit, however, may significantly impede an employer's ability to rely on Concepcion to compel the resolution of disputes with employees through individual arbitration.
In D.R. Horton Inc., the board declined to apply Concepcion, distinguishing it as a consumer-rights case involving the Federal Arbitration Act. Instead, the board viewed D.R. Horton Inc. as a case involving substantive employee rights, and held that an employer may not, as a condition of employment, require employees to waive their rights to pursue employment claims through class actions. Such language, according to the board, violates the NLRA insofar as it bars employees from initiating lawsuits or proceedings relating to their employment, and would lead employees to reasonably believe that they were prohibited from filing unfair labor practice charges with the board.
BETTER STAY ALERT
The decision has been controversial because it effectively would nullify a growing trend in favor of enforcing class waivers, and has not been followed by a number of federal courts. Nonunion employers are advised to stay alert for a decision in this case. The Fifth Circuit may vacate the board's decision, which, according to D.R. Horton, has been rejected by at least 32 other courts in cases where the employer has sought to enforce the agreement to arbitrate. In the meantime, however, employers should review their arbitration agreements with caution (and with counsel), but should not abandon hope of continuing to use arbitration as a means of dispute resolution.
Employers value maintaining confidentiality about workplace issues — including investigations — and often include confidentiality provisions in their handbooks. In Banner Health System d/b/a Banner Estrella Medical Center, 358 NLRB No. 93 (July 30, 2012), the NLRB held that an employer committed an unfair labor practice by maintaining a blanket policy requiring nonmanagerial employees to maintain confidentiality during workplace investigations. The board held that a blanket policy has a reasonable tendency to coerce employees, and thus constitutes an unlawful restraint on Section 7 rights. Rather, the employer must conduct a case-by-case analysis prior to each workplace investigation, and identify specific facts that give rise to a legitimate business justification for maintaining confidentiality — for example, to protect witnesses from harassment, intimidation and retaliation, to prevent destruction of evidence, fabrication of testimony or to prevent a cover-up.
This decision is on appeal to the D.C. Circuit. In the meantime, the NLRB general counsel's office has released a memorandum that reiterates its holding, while also providing model language for confidentiality policies. Verso Paper, No. 30-CA-089350, Advice Memorandum, at 1, 3 n.7 (January 29, 2013). Nonunion employers should review their confidentiality policies in light of this guidance, keeping in mind that the board has also made clear that the inclusion of its suggested model language will not excuse the employer from engaging in the fact-specific analysis required by Banner Health System. Employers should also document reasons and facts supporting the need for confidentiality. Note, however, that the NLRA does not cover supervisors and managers, so an employer may advise these witnesses at the outset that they should treat an investigation as confidential.
Many employers have developed social-media policies in an attempt to regulate the use of social media in the workplace. The NLRB has shown a strong interest in ensuring that such policies do not restrain the exercise of Section 7 rights. In a number of cases, the board has held that policies that limit the use of social media violate the NLRA, usually on the ground that the rules are overbroad or chill protected concerted activity. In DirecTV Holdings LLC, 359 NLRB No. 54 (January 25, 2013), the board found unlawful rules regarding contact with the media and law enforcement and confidentiality/disclosure of job, customer and nonpublic information; in Hispanics United of Buffalo, 359 NLRB No. 37 (December 14, 2012), the board found unlawful termination of employees for posting comments that were critical of a co-worker; and in NLRB, Operations Memorandum 12-59 (May 30, 2012), only one of seven social-media policies analyzed was deemed lawful.
On the other hand, in The Boeing Co., 19-CA-088157 (a February 2013 advice memorandum), the general counsel of the NLRB cautioned against reading phrases in isolation and held that policies must be viewed in context: There, the employer provided a 40-page explanation with supporting examples and gave employees an opportunity to ask questions.
In light of these decisions, employers should tailor social-media rules to address the employer's real concerns. Specifically, employers should:
• Rely on examples of conduct following broad language.
• Rely on externally imposed restrictions — for example, in the securities industry, there are restrictions on the types of communications brokers/traders may have with the public.
• Rely on common and long-practiced customs of the industry — for example, journalistic integrity and neutrality expectations may allow certain restrictions on communications.
Employers should not, however, rely on a "savings clause" — a statement that nothing in the policy should be read or is intended to interfere with employees' Section 7 rights, because the NLRB has found that these clauses do not render otherwise unlawful policies lawful.
OTHER AREAS TO WATCH
Off-Duty Access to Property. The board has recently expanded its interpretation of the long-standing decision, Tri-County Medical Center Inc., 222 NLRB 1089 (1976), in the context of analyzing off-duty employee access policies. The board has found off-duty access policies unlawful even when they do not mention union activity if they do not uniformly prohibit off-duty employee access for any purpose or provide the employer with broad discretion to grant or deny employee access. J.W. Marriott, 359 NLRB No. 8 (September 28, 2012); Sodexo America LLC, 358 NLRB No. 79 (July 3, 2012). Accordingly, nonunion employers should review their access rules to ensure that they can survive this increased scrutiny.
At-will Employment. The NLRB has also focused attention on at-will employment disclaimers. A recent advice memorandum issued by the general counsel's office instructs employers to avoid language that requires employees to refrain from seeking to change their at-will status collectively or agree that their at-will status cannot be changed in any way, Fresh & Easy Neighborhood Market, 21-CA-085615, Advice Memorandum (February 4, 2013); Windsor Care Centers, 32-CA-087540, 21-CA-087575, Advice Memorandum (February 4, 2013). Employers should be aware of this guidance when drafting at-will disclaimers.
The major takeaway from these decisions for nonunion employers is to periodically review handbooks, policies and practices to ensure that they are in compliance with the NLRA. In light of the controversy surrounding the board, employers confronting litigation or potential litigation before the board should consider the additional costs and delay that will likely result from an appeal challenging the board's jurisdiction and re-adjudication before a validly constituted board — which may or may not reach a different result.
Joseph Baumgarten and Elise Bloom are New York-based partners and global co-chairs of Proskauer Rose's labor & employment law department. Proskauer associate Susan McAleavey assisted with this article.