Tag: labor

Four States and Two Major Cities Approve Minimum Wage Increases

Michael Best Logo

Voters in the states of Alaska, Arkansas, Nebraska, and South Dakota voted in favor of ballot initiatives that will increase the state minimum wage. Alaska’s minimum wage will increase from $7.75 to $9.75 an hour by 2016, Arkansas’s from $6.25 to $8.50 by 2017, Nebraska’s from $7.25 to $9.00 by 2016, and South Dakota’s from $7.25 to $8.50 next year.

Those four states join 12 others and Washington, D.C., all of which have increased their minimum wage in the past two years. For example, New Jersey’s 2013 ballot initiative to raise the state minimum to $8.25 passed by more than 60 %, and in 2006, state initiatives to raise the minimum wage passed by large majorities in Arizona (65.6%), Missouri (75.6 %), Montana (74.2 %), Nevada (68.4 %), and Ohio (56.5 %).

Voters in San Francisco overwhelmingly approved a ballot initiative to raise the city’s minimum wage to $15 an hour, the highest level in the nation, on the heels of Seattle’s June decision to raise its minimum wage to $15. As with Seattle’s minimum wage, San Francisco’s will be phased in gradually, from its current rate of $10.74 an hour to $11.05 on January1 and $12.25 in May before increasing every year until reaching $15 in 2018.

On December 2, 2014, the Chicago City Council overwhelmingly approved raising the City’s minimum wage from the current state-wide rate of $8.25 an hour to $13 by mid-2019. Chicago workers will see their first increase next July, when the minimum wage will increase to $10, then increase by 50 cents each of the two years after that, and $1 the next two years.

This minimum wage initiative has also received some pushback. For example, Hotel industry groups on December 16 sued the city of Los Angeles in federal court over the city’s enactment of a minimum wage ordinance requiring large non-union hotels to pay their workers $15.37 an hour. In their lawsuit, the American Hotel & Lodging Association and the Asian-American Hotel Owners Association allege the city ordinance violates federal labor, contract and equal protection laws.

The hotel minimum wage ordinance, which passed the City Council in October on an 11-2 vote, is estimated to cover about 80 large hotels in the city. Starting in July, hotels with more than 300 rooms must pay workers the higher minimum wage; in July 2016 the measure kicks in for hotels with as few as 125 rooms. Hotel Industry groups contend that by allowing exemptions for hotels with union collective bargaining agreements, the ordinance creates an economic disadvantage for non-union hotels, thus forcing their hand to permit union organizing.

These minimum wage increases are not expected to make it more likely that Congress will pass President Obama’s proposed federal minimum wage increase to $10.10, particularly given the results of this past November’s mid-term elections. However, the minimum wage will certainly remain a hot-button issue for the next two years, and a campaign issue during the 2016 Presidential campaign.

ARTICLE BY

Robert W. Mulcahy
Carlos R. Pastrana-Torres
OF
Michael Best & Friedrich LLP

Not Just Your (Company) Email System Anymore! re: NLRB Purple Communications Ruling

Godfrey Kahn Law Firm

On December 10, 2014, the National Labor Relations Board (Board) ruled in Purple Communications, Inc., 361 N.L.R.B. No. 126, thatemployees have a right, protected by the National Labor Relations Act (Act), to use an employer’s email system during non-working time for communications protected by the Act(e.g., to discuss union issues or other protected concerted activities protected by Section 7 of the Act). The Board has thus overruled prior precedent, as set out in Register Guard, 351 N.L.R.B. 1110 (2007), that the Act did not give employees the right to use their employer’s email systems for Section 7 purposes.

A copy of the December 10, 2014 Board decision can be found here. The following passage sums up the scope of the Board’s ruling:

First, [this ruling] applies only to employees who have already been granted access to the employer’s email system in the course of their work and does not require employers to provide such access. Second, an employer may justify a total ban on nonwork use of email, including Section 7 use on nonworking time, by demonstrating that special circumstances make the ban necessary to maintain production or dEmail Selection on Computeriscipline. Absent justification for a total ban, the employer may apply uniform and consistently enforced controls over its email system to the extent such controls are necessary to maintain production and discipline. Finally, we do not address email access by nonemployees, nor do we address any other type of electronic communications systems, as neither issue is raised in this case.

The Board’s decision may be appealed by the employer, but even if it is not appealed, the email issue will likely continue to be litigated before the Board. For now, employers should review their electronic communications policies to ensure compliance with the Board’s new standards or to, at a minimum, understand their risk.

ARTICLE BY

Rufino Gaytán
OF
Godfrey & Kahn S.C.

United States Supreme Court Round-Up: Key Opinions from 2013 to 2014 and Upcoming High-Profile Business Disputes

Andrews Kurth

The 2013–2014 term of the United States Supreme Court resulted in a wide range of decisions of importance to business. In this article, we highlight some of the key opinions and explore their likely impacts. We also preview a few of the high-profile business disputes the Supreme Court has agreed to hear next term.

Key Business Cases from the 2013–2014 Term

American Chemistry Council v. Environmental Protection Agency: Holding: The Environmental Protection Agency (EPA) reasonably interpreted the Clean Air Act to require sources that would need permits based on their emission of chemical pollutants to comply with “best available control technology” for greenhouse gases. Effect: The decision reinforces the Supreme Court’s previous recognition that the EPA has the power to regulate greenhouse gases as pollutants. However, portions of the decision strongly cautioned the EPA against overreach, stating that the agency may not “bring about an enormous and transformative expansion in [its] regulatory authority without clear congressional authorization.” These comments suggest that the Supreme Court may take a hard line when the Obama Administration’s other climate regulations eventually go to court.

Daimler AG v. Bauman: Holding: A foreign company doing business in a state cannot be sued in that state for injuries allegedly caused by conduct that took place entirely outside of the United States. Effect: Daimler makes it much harder for plaintiffs to establish general jurisdiction over foreign entities. The opinion re-characterizes general jurisdiction as requiring the defendant to be “at home” in the state, a circumstance that the Supreme Court suggested will generally be limited to the places where the defendant is incorporated or where it has its principal place of business. Moreover, the fact that a domestic subsidiary whose activities are imputed to the foreign parent may be “at home” in the state will not make the foreign parent “at home” in that locale for purposes of general jurisdiction.

Halliburton v. Erica P. John Fund, Inc.: Holding: Plaintiffs in private securities fraud actions must prove that they relied on the defendants’ misrepresentations in choosing to buy stock. Basic v. Levinson’s holding that plaintiffs can satisfy this reliance requirement by invoking a presumption that the price of stock as traded in an efficient market reflects all public, material information, including material misstatements, remains viable. However, after Halliburton, defendants can defeat the presumption at the class certification stage by proving that the misrepresentation did not in fact affect the stock price. Effect: While investors will continue to pursue class actions following large dips in stock prices, the Halliburton decision helps to level the playing field by providing defendants a mechanism to stop such suits at the class certification stage.

Lawson v. FMR LLC: Holding: Employees of privately held contractors or subcontractors of a public company are protected by the anti-retaliation provision of the Sarbanes-Oxley Act of 2002 (SOX). Effect: Following Lawson, there will likely be an increase in SOX litigation against public and non-public companies. Because many of the issues concerning the scope and meaning of SOX have yet to be resolved, lower courts will continue to wrestle with defining the parameters of the law. Questions left unanswered byLawson include whether the whistleblower’s accusation must be related to work he or she performed for the company and whether the contract with the public company must have some relation to public accounting or securities compliance.

Chadbourne & Park LLP v. Troice: Holding: The Securities Litigation Uniform Standards Act of 1988 (SLUSA) does not preclude state-law class actions based on false representations that the uncovered securities that plaintiffs were purchasing were backed by covered securities. Effect: SLUSA bars the bringing of securities class actions “based upon statutory or common law of any state” in which the plaintiff alleges “a misrepresentation or omission of a material fact in connection with a purchase of sale of covered securities.” The statute defines “covered securities” to include only securities traded on a national securities exchange or those issued by investment companies.

U.S. v. Quality Stores: Holding: Severance payments to employees who are involuntarily terminated are taxable wages for purposes of the Federal Insurance Contributions Act. Effect: Employers should, under most circumstances, treat severance payments to involuntarily terminated employees as wages subject to FICA taxes. There are exceptions, however, and employers should therefore seek legal counsel to assist in determining the tax status of a particular severance arrangement.

Business Cases to Watch in the 2014–2015 Term

Integrity Staffing Solutions v. Busk: Whether time spent in security screenings is compensable under the Fair Labor Standards Act.

Mach Mining v. Equal Employment Opportunity Commission: Whether and to what extent a court may enforce the Equal Employment Opportunity Commission’s mandatory duty to conciliate discrimination claims before filing suit.

Omnicare v. Laborers District Council Construction Industry Pension Fund: Whether, for purposes of a claim under Section 11 of the Securities Act of 1933, a plaintiff may plead that a statement of opinion was untrue merely by alleging that the opinion itself was objectively wrong, or must the plaintiff also allege that the statement was subjectively false through allegations that the speaker’s actual opinion was different from the one expressed.

Young v. UPS: Whether, and in what circumstances, an employer that provides work accommodations to non-pregnant employees with work limitations must provide work accommodations to pregnant employees who are similar in their ability or inability to work.

As in recent years, the Supreme Court continues to grant review on more and more cases involving matters of concern to U.S. businesses. Andrews Kurth attorneys are available to provide further detail and guidance on the decisions highlighted here, and on any other issues of concern to your company that have reached the high court.

ARTICLE BY

Kelly Sandill
OF
Andrews Kurth

The Unions Are Coming…The Unions Are Coming! We Don’t Need Paul Revere’s Lantern To See Who’s Coming!

Michael Best Logo

On December 16, 2014, the term of NLRB Board Member Nancy Schiffer ends.  This is a critical date for the union movement because on that date the pro-Union members of the Board will lose their 3-2 majority status and their effective control over the NLRB. So what’s coming next for private employers?

On July 29, 2014, the General Counsel of the NLRB issued an advice memorandum to the NLRB Regional Directors identifying his game plan regarding re-establishing a new definition for joint employer, to make it easier for unions to organize:

“The new broader standard will allow employees to use traditional economic weapons to exert lawful economic pressure on those parties to realistically control the economics of their relationship even if they do not directly control working conditions.”

Prior to that public announcement, the General Counsel had stated that the objective of the Board has been to consistently uphold unions organizing very small subsets of employees, called “micro-units,” instead of the traditional wall-to-wall bargaining units.  Quite simply, these “micro units” are easier for unions to gerrymander and, ultimately, to organize.

The final step in this trifecta is the most troubling for employers – the new NLRB Election Rules.  Through rule-making, the NLRB is seeking to re-write the NLRA in such a way as to greatly speed up the elections.  The new rules reduce the timeline for elections from over 35 days to under 20 days between the time of the petition and the election.  These “quickie” or “ambush” elections will undoubtedly benefit unions, because it gives the employer less time to explain to the employee the pros and cons of joining a union.  These rules are on a fast track and clearly support the union movement.

So, undoubtedly, the unions are indeed coming after management!  This is a watershed moment for the unions.  The union’s financial coffers have been depleted as the union membership numbers continue to plummet. If they don’t get their act together and start to effectively unionize, then they will have to stop blaming employers and/or the NLRB for their organizing failures.

Under the new NLRB Election Rules, nearly all election-related issues will be resolved after the election.  This process would be similar to the approach taken in the recent Northwestern University football players’ case, in which the NLRB held the election and then impounded the ballots.  The NLRB will sort out any issues after the fact so long as the objections don’t impact more than 20% of the bargaining units.

Employers had better gear up and get ready because the unions are locked and loaded and ready to attack. The stage has been proactively set by the NLRB to give unions their best-ever opportunity to succeed in union organizing. If employers don’t prepare now, they will jeopardize their freedom to deal directly with their employees and reduce their flexibility in running their company. The NLRB Regional Offices are already gearing up to explain the new changes in NLRB election procedure, starting in November, so here come the unions!

© MICHAEL BEST & FRIEDRICH LLP
ARTICLE BY

Amy O. Bruchs
Carlos R. Pastrana-Torres
Robert W. Mulcahy
Farrah N.W. Rifelj
Brian P. Paul
OF
Michael Best & Friedrich LLP

Ebola and Potential Labor Relations Issues

Proskauer Law firm

The Ebola panic presently sweeping the U.S. raises a host of potential issues for employers.  We recently provided guidance to help employers ensure employee safety while also complying with legal obligations under the Americans with Disabilities Act and similar laws.  In addition, the Occupational Health & Safety Administration (OSHA) recently released a comprehensive summary of requirements, recommendations and guidelines for employers and workers.  The escalating concern over Ebola also raises potential labor relations issues.  Many of the workplaces with the potential for employees to come into contact with infected persons or material – health care providers, cleaning services, waste disposal firms, ambulance and other transportation services, to name a few – are unionized, and unions have begun to seek greater protections for their members.  Non-union employers may be affected as well, as at least one group of non-union employees has engaged in a strike to protest inadequate safety measures.

An important step all employers can take, whether unionized or not, is to share information disseminated by the Centers for Disease Control (CDC) and other public health agencies to educate their employees.  Indeed, a recent Washington Post article highlighted the information gap that is fueling public fears.  Sharing accurate, up to date information should help address employee concerns and avoid potential workplace disruptions based on unfounded fears.

Beyond the dissemination of information, in workplaces where employees may have some potential to come into contact with persons or material infected with the Ebola virus, employers must comply with applicable workplace health and safety laws and regulations, including making sure that effective protocols are in place, that protective equipment and clothing are available, and that employees receive appropriate training.  Not surprisingly, healthcare workers – nurses in particular – have been at the forefront in demanding increased protection and training.

National Nurses United (NNU) has been especially outspoken.  In addition to its criticism of the Texas Health Presbyterian Hospital, where two nurses caring for an Ebola patient became infected themselves, it has launched a multi-pronged campaign to achieve increased training and protection for nurses who may be called upon to treat Ebola patients.  As part of their campaign, they have released an Ebola Toolkit that includes a guide to state and federal whistleblower laws and a comprehensive set of collective bargaining demands.  Their demands include detailed proposals for Ebola-specific protocols, training and protective equipment, creation of a joint labor-management infectious disease task force, medical services for exposed or potentially exposed employees, and full paid time off for nurses exposed to an infectious disease.  Healthcare employers should expect to be presented with comparable demands from the unions representing their employees, if they have not done so already.

Other unions are engaging in similar activities.  As the largest union in the U.S. representing healthcare workers, cleaners, and other service employees who could potentially come into contact with a person or material infected by Ebola, the SEIU has been particularly active.  Its public efforts to date have been focused largely on educating union members and training them to use protective equipment.

In addition to union advocacy and education, there has been at least one work stoppage arising from employees’ Ebola concerns.  At LaGuardia airport, a group of more than 200 non-union aircraft cabin cleaners recently engaged in a one-day strike to protest what they claimed were inadequate protections from exposure to Ebola.  In that case, the SEIU is attempting to organize the striking cleaners, but regardless of whether non-union employees are seeking union representation, they have the right under the National Labor Relations Act to engage in concerted activity for their mutual aid and protection, such as a strike to protest working conditions related to Ebola risks.

Education and communication are critical to addressing employees’ Ebola-related concerns and avoiding workplace disruptions based on unfounded fears.  In unionized workplaces, union representatives should be included in the education and communication process. Of course, all employers must comply with applicable workplace safety and health laws and regulations.  Depending upon the circumstances, unionized employers may have bargaining obligations with respect to additional measures they seek to implement in response to Ebola concerns.  They may also be faced with bargaining demands by employees seeking greater protection.  Finally, it is important for non-union employers to understand that their employees also have the right to act in concert for their mutual aid or protection.

ARTICLE BY

Scott Faust
OF
Proskauer Rose LLP

Employers’ Immigration Law Update – September 2014

Jackson Lewis Law firm

ICE Levies $2M Fine against Hotel for I-9 Related Violations

A Salt Lake City-based hotel will have to pay nearly $2 million for hiring unauthorized workers, including illegal aliens. The hotel will avoid criminal prosecution in exchange for its full cooperation with a U.S. Immigration and Customs Enforcement investigation and for taking action to correct its hiring practices. According to the non-prosecution agreement, several lower-level employees and mid-level managers conspired to rehire unauthorized workers amidst an administrative audit of I-9 employee verification forms that began in September 2010. The hotel was notified that 133 employees were not authorized to work in the United States; however, the conspirators created three temporary employment agencies, essentially shell companies, to rehire 43 of the unauthorized, and most of the workers returned under different names using fraudulent identity documents.

$300K for H-2B Violations

According to a Department of Labor announcement, the agency has charged a landscaping company with violating federal law by failing to hire U.S. workers, and for underpaying temporary foreign workers. The company will pay $280,000 in back wages to 80 workers and nine job applicants and $20,000 in civil money penalties.

Immigration Reform Update

With comprehensive immigration reform legislation no longer a realistic possibility for the foreseeable future, advocates for reform have shifted their focus to executive actions the President may take unilaterally to implement changes in immigration policy.

The President reportedly is considering broad use of executive action, granting relief potentially to up to 6 million undocumented individuals, similar to what has been provided under the administration’s Deferred Action to Childhood Arrivals program (DACA).

Building off of DACA, the President has directed the Department of Homeland Security to review the administration’s immigration enforcement policies and recommend additional changes, possibly expanding the deferred action and work authorization to family members of U.S. citizens and lawful U.S. residents. The administration reportedly also is looking at possible changes to current law and regulation that could benefit employers.

Any unilateral action by the administration likely will be controversial.

Owner Liable for H-1B, J-1 Costs

The owner of several medical clinics is personally liable for back wages and the costs of physicians’ H-1B visas and J-1 waivers, the Court of Appeals for the Sixth Circuit has ruled. Kutty v. DOL, No. 11-6120 (6th Cir. Aug. 20, 2014). The Court held Dr. Mohan Kutty and his medical clinics violated H-1B provisions by having physicians cover the costs of their own H-1B visa petitions and related J-1 visa waivers.

Can You Prove the Mail Was Delivered? If You Are Sending An FMLA Notice, the Answer Must Be Yes

Poyner Spruill Law firm

A recent case emphasizes the importance of implementing procedures that establish strict compliance with the employer notice obligations under the FMLA. In Lupyan v. Corinthian Colleges, Inc., the Third Circuit held that Corinthian Colleges, Inc. (the College) could not avoid a jury trial because it did not send the mandatory individual FMLA notice to the plaintiff via a mailing that produced proof of receipt. Ms. Lupyan applied for leave due to depression in December 2007. Her physician completed a  Certification of Health Care Provider form, stating that she needed leave through April 1, 2008. The College verbally advised Lupyan that her leave was being designated as Family Medical Leave and allegedly mailed her a letter explaining her rights and responsibilities under the FMLA, including the fact that her FMLA leave ran out at the end of March. Lupyan did not return to work by the end of March, and the College terminated her employment. She sued, claiming that she never received the letter, and that if she had known that her leave was limited to 12 weeks, she would have returned to work and avoided termination. The lower court granted summary judgment to the College based on its affidavits stating that a letter satisfying the notice requirements of 29 CFR § 825.208 was mailed through regular snail mail to Lupyan. The Third Circuit reversed, holding that the presumption of receipt usually given to the U.S Postal Service mail was insufficient in light of Lupyan’s denial that she ever got the letter. Because the FMLA regulations are silent on the type of mail required for delivery of mandatory FMLA notice, many employers may use regular mail. Best practice in light of the Lupyan decision is to use certified or overnight mail so that proof of delivery exists when sending the Notice of Rights and Responsibilities and the Notice of Eligibility required under the FMLA and to obtain a personal email address from employees as part of the leave application and approval process. An email, with a receipt that shows it was opened, would also likely suffice for proof of delivery.

ARTICLE BY

Susanna Knutson Gibbons
OF
Poyner Spruill LLP

Madison, WI Resolution Targets “Ban the Box” Legislation For City Contractors and Vendors

Proskauer Law firm

The Common Council of Madison, Wisconsin passed a resolution that prohibits the city (i) from asking questions concerning an applicant’s criminal history on the city’s initial employment applications (i.e., “banning the box”), and (ii) from conducting a criminal background check before making a conditional offer of employment to the applicant.  The resolution provides exceptions for the city’s police department and commissioned fire personnel.

While the resolution does not extend these prohibitions to city contractors and vendors at the present time, it does instruct the city to “introduce an ordinance [within the next six months] prohibiting City vendors and contractors from asking applicants about their arrest and conviction history until after a conditional offer of employment has been made.”

Given the national momentum behind the “ban the box” movement, Madison contractors and vendors should monitor the proposed ordinance as it makes its way through the Council.  To date, about a dozen cities—including Compton (CA), Richmond (CA), Hartford (CT), New Haven (CT), Indianapolis (IN), Louisville (KY), Boston (MA), Cambridge (MA), Worcester, (MA), Detroit (MI), Atlantic City (NJ), New York City (NY), and Pittsburgh (PA)—have required vendors and contractors to ban the box on their employment applications.  The State of Delaware has “encouraged” the same. Stay tuned to see if Madison is next.

ARTICLE BY

Katharine H Parker
Daniel L. Saperstein
 
OF
Proskauer Rose LLP

Micro Bargaining Units Coming To a Workplace Near You

Steptoe Johnson PLLC Law Firm

It is no secret that many employers take steps to try and keep their workplaces union-free.  One of the newer concerns for employers in that camp is the possibility that employees could form a “micro bargaining unit,” which is a unit of employees that make up only a small portion of the workforce. 

Act Now! to Preserve Your Collective Bargaining Rights!

In a 2011 case, Specialty Healthcare, the National Labor Relations Board (NLRB) established a new standard for determining appropriate bargaining units.  Specifically, the Board stated that, in evaluating a potential unit, it would focus on the community of interest among the petitioning employees.  According to the Board in that case, factors such as the extent of common supervision, interchange of employees, and geographic considerations should all be taken into account when evaluating a proposed unit.

Specialty Healthcare also placed a significant burden on employers trying to challenge smaller units.  The Board stated that, if an employer wished to argue that a unit should include additional employees, the employer needs to show that employees in a larger unit have an “overwhelming” community of interest with those in the proposed smaller unit.  That’s a higher burden than what has been applicable in the past, and not one easy to meet.

The effects of Specialty Healthcare were evident in a more recent Board decision.  In Macy’s Inc., the Board recently confirmed that 41 Macy’s cosmetic and fragrance department sales employees could form a bargaining unit.  Those 41 employees made up about one-third of the employees at that Macy’s store.  Macy’s argued that this unit was inappropriate because cosmetic and fragrance employees shared an overwhelming community of interest with the other sales employees, but the Board saw it differently.

The Board noted several factors that established the community of interest among the cosmetic and fragrance employees: they all worked in the same department, were supervised by the same manager, had limited contact with other sales employees, and were paid on the same commission-based based structure.  Additionally, the Board pointed out that Macy’s rarely transferred employees between the cosmetic and fragrance department and other store departments.

While the Macy’s, Inc. case was not a positive development for employers, the NLRB then rejected a proposed micro-unit about a week later in a different case at Bergdorf-Goodman, a Nieman Marcus subsidiary.  In that case, the Board found that salon shoes salespeople and contemporary shoe salespeople lacked a community of interest.  In so deciding, the Board noted that the proposed unit in that case was not created based on any administrative or operational lines established by the employer.  Additionally, the employees had different department managers, different floor managers, and different directors of sales.

While both of these cases dealt with the retail industry, the results are important to employers in any sector, since the Specialty Healthcare standard certainly can be applied to create micro-bargaining units in other industries.  In fact, employers can probably expect unions to try organizing smaller bargaining units within larger companies, particularly where efforts to organize larger groups have proved unsuccessful.  This strategy allows unions to select pro-union employee groups and increase their likelihood of winning an election.

If there’s one proactive takeaway from these cases, it’s that employers need to think in advance about how they can make themselves less vulnerable to micro-unit organizing.  For example, cross-training employees and having them work in different departments makes it less likely a union could demonstrate a community of interest among a small group of employees.  Of course, any steps taken to combat against micro-unit organizing also need to be evaluated for their operational feasibility.  In most cases, it’s probably best that employers contact experienced legal counsel to weigh the pros and cons involved.

Firings for Facebook Comments Unlawful, NLRB Rules

Jackson Lewis Law firm

An employer violated the National Labor Relations Act by discharging two employees because of their participation in a Facebook discussion about their employer’s State income tax withholding mistakes, by threatening employees with discharge for their Facebook activity, by questioning employees about that activity, and by informing employees they were being discharged because of their Facebook activity, the NLRB has ruled. The Board also ruled the employer’s Internet/Blogging policy violated the NLRA. Triple Play Sports Bar and Grille, 361 NLRB No. 31 (2014).

Facebook Posts

Triple Play employees Jillian Sanzone and Victor Spinella discovered they owed more in State income taxes on their earnings at the sports bar than expected. Sanzone discussed this at work with other employees, and some employees complained to the employer about the tax problem. The employees did not belong to a union. 

Sanzone, Spinella, and former employee Jamie LaFrance had Facebook accounts. On January 31, 2011, LaFrance posted the following “status update” to her Facebook page:

Maybe someone should do the owners of Triple Play a favor and buy it from them. They can’t even do the tax paperwork correctly!!! Now I OWE money…[expletive deleted]!!!!

The following comments were posted to LaFrance’s page in response:

KEN DESANTIS (a Facebook “friend” of LaFrance’s and a customer): “You owe them money…that’s [expletive deleted] up.”

DANIELLE MARIE PARENT (Triple Play employee): “I [expletive deleted] OWE MONEY TOO!”

LAFRANCE: “The state. Not Triple Play. I would never give that place a penny of my money. Ralph [DelBuono] [expletive deleted] up the paperwork…as per usual.”

DESANTIS: “yeah I really dont go to that place anymore.”

LAFRANCE: “It’s all Ralph’s fault. He didn’t do the paperwork right. I’m calling the labor board to look into it bc he still owes me about 2000 in paychecks.”

At this point, Spinella selected the “Like” option under LaFrance’s initial status update. The discussion continued:

LAFRANCE: “We shouldn’t have to pay it. It’s every employee there that its happening to.”

DESANTIS: “you better get that money…thats [expletive deleted] if that is the case im sure he did it to other people too.” 

PARENT: “Let me know what the board say because I owe $323 and ive never owed.”

LAFRANCE: “I’m already getting my 2000 after writing to the labor board and them investigating but now I find out he [expletive deleted] up my taxes and I owe the state a bunch. Grrr.”

PARENT: “I mentioned it to him and he said that we should want to owe.”

LAFRANCE: “Hahahaha he’s such a shady little man. He prolly pocketed it all from all our paychecks. I’ve never owed a penny in my life till I worked for him. Thank goodness I got outta there.”

SANZONE: “I owe too. Such an [expletive deleted].”

PARENT: “yeah me neither, i told him we will be discussing it at the meeting.”

SARAH BAUMBACH (Triple Play employee): “I have never had to owe money at any jobs…i hope i wont have to at TP…probably will have to seeing as everyone else does!”

LAFRANCE: “Well discuss good bc I won’t be there to hear it. And let me know what his excuse is ;).”

JONATHAN FEELEY (a Facebook “friend” of LaFrance’s and customer): “And ther way to expensive.” 

Sanzone and Spinella Discharged

When Ralph DelBuono, the employer’s co-owner, learned about the Facebook discussion, he discharged Sanzone, telling her it was because of her Facebook comment. Spinella was terminated the next day, after being interrogated about the Facebook discussion, the meaning of his “Like” selection, the identity of the others in the conversation, and other issues. The other co-owner told Spinella that, because Spinella “liked” the disparaging and derogatory comments, Spinella was disloyal and it was “apparent” that Spinella wanted to work elsewhere. He told Spinella, “[Y]ou will be hearing from our lawyers.” Thereafter, the company’s attorney contacted Sanzone by letter, suggesting a possible defamation action. The lawyer also contacted LaFrance who, in response, deleted the entire Facebook conversation and posted a retraction. 

Sanzone and Spinella filed separate unfair labor practice charges against Triple Play, which the NLRB consolidated into one complaint. 

The employer did not dispute the employees’ Facebook activity was concerted and they had a protected right to engage in a Facebook discussion about the employer’s tax withholding calculations. The employer, however, contended it had not violated the NLRA because the plaintiffs had adopted LaFrance’s allegedly defamatory and disparaging comments, which were unprotected. The employer also asserted the Facebook posts were unprotected because they were made in a “public” forum, accessible to employees and customers, and they had undermined the co-owner’s authority in the workplace and adversely affected its public image.

Comments Protected

The Board disagreed. It determined the employees did not lose the Act’s protection to engage in concerted activity because of their comments in the Facebook discussion. Under its holding in Atlantic Steel, 245 NLRB 814 (1979), the NLRB explained, it must balance employee rights with the employer’s interest in maintaining order at its workplace, but Atlantic Steel dealt with workplace confrontations with the employer, which was not the scenario here. The employer’s reliance on that decision was therefore misplaced. In this case, the Board pointed out, the disputed conduct involved a social media discussion among offsite, off-dutyemployees, and two non-employees in which no manager or supervisor participated and where there was no direct confrontation with management. Further, the Board said, Sanzone’s “use of a single expletive” to describe her manager “in the course of a protected discussion on a social media website” did not “sufficiently implicate” the employer’s “legitimate interest in maintaining discipline and order in the workplace.”

The Board also rejected the employer’s argument that Sanzone’s comment was unprotected because it was a workplace confrontation that could be seen by customers DeSantis and Feeley. The NLRB noted they joined the discussion as LaFrance’s Facebook friends, on their own initiative and in the context of a social relationship with LaFrance outside of the workplace, not because they were the employer’s customers, and“[t]his off-duty indiscretion away from the [employer’s] premises did not disrupt any customer’s visit to the [employer].”

Neither did the Board see this conduct as disloyal or defamatory. While the Board agreed an employer has a legitimate interest in preventing the disparagement of its products or services and in protecting its reputation from defamation, against which NLRA Section 7 rights are to be balanced, that interest was not pr
esent here so as to overcome the employees’ statutory protection. It rejected the employer’s contention that Sanzone’s comment and Spinella’s “like” were disloyal and unprotected. The purpose of the employees’ communications was to seek and provide mutual support to encourage the employer to address problems in the terms or conditions of employment, not to disparage its product or services or to undermine its reputation, the NLRB said. The discussion clearly showed a labor dispute existed and the employees’ participation was not directed to the general public (they were more comparable to conversations that can be overheard by a customer). Further, the Board said the comments were not “so disloyal . . . as to lose the Act’s protection” because they did not even mention the employer’s products.

The Board also rejected the contention that the employees’ comments were unprotected because they were defamatory. According to the agency, Triple Play had not met its burden to establish the comments were made with knowledge of their falsity or with reckless disregard for their truth or falsity. In addition, it said that Sanzone’s use of an expletive to describe a co-owner in connection with the asserted tax-withholding errors “cannot reasonably be read as a statement of fact; rather, Sanzone was merely (profanely) voicing a negative personal opinion of [the co-owner].”

“Like” Protected

The Board also decided that Spinella’s use of Facebook’s “like” option was protected. It expressed agreement only with the comment it immediately followed (LaFrance’s original post), the Board found, not with LaFrance’s other comments. Accordingly, said the Board, Spinella’s activity was protected by the Act, and the employer’s adverse action was unlawful. (See our blog post, Employee’s Facebook ‘Like’ is Part of Concerted Activity: NLRB.)

Internet/Blogging Policy Unlawful

The Board faulted the employer’s internet/blogging policy, as well. It found that, since employees would reasonably construe the employer’s “Internet/Blogging” policy to prohibit the type of protected Facebook post that led to the unlawful discharges, it was illegal.

The policy stated:

The Company supports the free exchange of information and supports camaraderie among its employees. However, when internet blogging, chat room discussions, email, text message, or other forms of communication extend to employees revealing confidential and proprietary information about the company, or engaging in inappropriate discussions about the company, management, and/or co-workers, the employee may be violating the law and is subject to disciplinary action, up to and including termination of employment. Please keep in mind that if you communicate regarding any aspect of the Company, you must include a disclaimer that the views you share are yours, and not necessarily the views of the Company. In the event state or federal law precludes this policy, then it is of no force or effect.

Employees could reasonably interpret the policy as proscribing discussions about terms and conditions deemed “inappropriate” by the employer, because “‘inappropriate’ [is] ‘sufficiently imprecise’ that employees would reasonably understand it to encompass ‘discussions and interactions protected by Section 7,’” the Board found.

Employer Cautions

This decision is wide-ranging. It underscores the need for employers to pause, reflect, and thoroughly investigate before taking action against employees for alleged misconduct where they have acted together in regard to their wages, hours or working conditions, even where their language might give offense to the employer despite the fact that members of the public can view their complaints. The decision also shows the NLRB affords significant leeway to employees, even permitting public invective against business owners — at least up to a point. Finally, employers should avoid policies and rules that contain broad, imprecise, or vague prohibitions that might be viewed as restricting unlawfully employees’ protected activity. 

ARTICLE BY

Howard M. Bloom
Philip B. Rosen
 
OF
Jackson Lewis P.C.