Tag: National Labor Relations Board

NLRB Determines Confidentiality and Non-Disparagement Provisions to be Unlawful in Severance Agreements

The National Labor Relations Board (the NLRB or the Board) issued a decision earlier this week that purports to ban confidentiality and non-disparagement provisions from most employee severance agreements.

In McLaren Macomb, the Board scrutinized severance agreements an employer gave to 11 employees who had recently been laid off. The confidentiality provision stated that the terms of the severance agreement were confidential and must not be disclosed to anyone with few exceptions (e.g., the employees’ spouses). The non-disparagement provision barred the employees from making statements to anyone that could disparage or harm the image of the employer or its officers, directors, employees, etc. These provisions are obviously common in severance agreements.

Among other things, the Board determined that both provisions unlawfully prevented the former employees from speaking out about working conditions and compensation (including the severance) offered by the employer and assisting with NLRB and other government investigations. Historically, the NLRB has gone back and forth on whether such provisions are lawful. However, the position taken this week is the NLRB’s most aggressive position to date. Specifically, the Board determined that the mere inclusion of such provisions in a severance agreement is unlawful because they have a deterrent and chilling effect on worker’s rights, even if the employee does not sign the agreement or the employer does not enforce the provisions against an employee who breaches confidentiality or disparages the company after signing.

It is important to note that this decision has some limitations:

  • First, it does not apply to “supervisors” (as defined by the NLRA) or to independent contractors. Who is a “supervisor” under the NLRA involves several factors, including whether the employee has the authority to hire, fire, discipline, or direct the work of another employee. Therefore, it is clear that executives and upper-level management are not covered by this ruling, and, depending on the circumstances, middle and even lower level managers may not be covered either.
  • Second, some have questioned whether a smartly worded disclaimer may permit employers to include limited confidentiality and limited non-disparagement provisions in severance agreements given to rank-and-file employees. For instance, in the past, employers often included a broad statement that the severance agreement is not intended to and in fact does not infringe upon any rights the employee may have under the NLRA. Unfortunately, the Board did not specifically address this issue, but, given the aggressive position taken in the Board’s decision this week, there is definitely some risk of liability even with such disclaimers. That determination should be made based on the employer’s risk-tolerance, along with the circumstances of the individual severance agreement, and is best determined by speaking with legal counsel.

The NLRB General Counsel is expected to release additional guidance on this issue in the coming months. Until that happens, employers should seriously consider this decision when drafting severance agreements.

© 2007-2023 Hill Ward Henderson, All Rights Reserved
For more Labor Law news, click here to visit the National Law Review.

NLRB Unleashes New Damages Against Labor Law Violators

On Tuesday, December 13, 2022 to the National Labor Relations Board (NLRB”) issued a decision that that could have profound effect on employers in all industries, regardless if they have a union. In Thrryv, Inc., the NLRB ruled in a 3 to 2 decision that employers who have been found to have violated the National Labor Relations Act (“NLRA”) can be assessed “consequential damages.” in addition to the more traditional remedies of back pay and reinstatement.   If this case is upheld following a likely appeal, it will rock the employer community in the automotive industry and elsewhere.

The case arises from a unionized marketing company that decided to have a layoff. In the course of negotiating with the company over the layoff, the union representing the employees made various requests for information from the company. The company never provided the requested data. The NLRB determined the company violated the NLRA by refusing to respond to the union’s request for information. The NLRB further found the company violated the act by implementing the layoff without engaging in collective bargaining with the union.

Normally, the NLRB would remedy a violation of this nature by ordering the company to engage in “make whole relief” for the affected workers. Typically, that would involve reinstatement and back pay for the period of time they were wrongfully laid-off. However, in this case, the NLRB boldly went where it has never gone before and ordered the company to compensate the employees for “all direct or foreseeable pecuniary harms suffered as a result of the unfair labor practice.” The NLRB went on to say this would be the new normal to remedy employer violations of the NLRA. Determining the full extent of direct or foreseeable pecuniary harms will invariably require additional hearings in which the parties present evidence. Under this new standard, the type of damages potentially available to affected workers could include such things as out-of-pocket, medical expenses, credit card debt, and any other cause the light off employees incurred while trying to make ends meet.

The two Republican members of the NLRB, Marvin Kaplan, and John Ring filed a dissenting opinion.  The dissent believes that the new remedy laid-out in the majority decision is too broad.  They contend this new standard could subject employers to almost limitless, speculative damages.  The dissenting opinion also notes that this new form of damages goes further than those available under Title VII of the Civil Rights Act of 1964.  They question how the NLRB could award such damages without specific statutory authority from Congress.

This case will almost certainly be appealed and it behooves all the employer community to closely follow its track and if the NLRB uses other cases to continue to try to implement these new form of damages.

Article By Mark J. Neuberger of Foley & Lardner LLP

For more labor law legal news, click here to visit the National Law Review.

© 2022 Foley & Lardner LLP

Following the Recent Regulatory Trends, NLRB General Counsel Seeks to Limit Employers’ Use of Artificial Intelligence in the Workplace

On October 31, 2022, the General Counsel of the National Labor Relations Board (“NLRB” or “Board”) released Memorandum GC 23-02 urging the Board to interpret existing Board law to adopt a new legal framework to find electronic monitoring and automated or algorithmic management practices illegal if such monitoring or management practices interfere with protected activities under Section 7 of the National Labor Relations Act (“Act”).  The Board’s General Counsel stated in the Memorandum that “[c]lose, constant surveillance and management through electronic means threaten employees’ basic ability to exercise their rights,” and urged the Board to find that an employer violates the Act where the employer’s electronic monitoring and management practices, when viewed as a whole, would tend to “interfere with or prevent a reasonable employee from engaging in activity protected by the Act.”  Given that position, it appears that the General Counsel believes that nearly all electronic monitoring and automated or algorithmic management practices violate the Act.

Under the General Counsel’s proposed framework, an employer can avoid a violation of the Act if it can demonstrate that its business needs require the electronic monitoring and management practices and the practices “outweigh” employees’ Section 7 rights.  Not only must the employer be able to make this showing, it must also demonstrate that it provided the employees advance notice of the technology used, the reason for its use, and how it uses the information obtained.  An employer is relieved of this obligation, according to the General Counsel, only if it can show “special circumstances” justifying “covert use” of the technology.

In GC 23-02, the General Counsel signaled to NLRB Regions that they should scrutinize a broad range of “automated management” and “algorithmic management” technologies, defined as “a diverse set of technological tools and techniques to remotely manage workforces, relying on data collection and surveillance of workers to enable automated or semi-automated decision-making.”  Technologies subject to this scrutiny include those used during working time, such as wearable devices, security cameras, and radio-frequency identification badges that record workers’ conversations and track the movements of employees, GPS tracking devices and cameras that keep track of the productivity and location of employees who are out on the road, and computer software that takes screenshots, webcam photos, or audio recordings.  Also subject to scrutiny are technologies employers may use to track employees while they are off duty, such as employer-issued phones and wearable devices, and applications installed on employees’ personal devices.  Finally, the General Counsel noted that an employer that uses such technologies to hire employees, such as online cognitive assessments and reviews of social media, “pry into job applicants’ private lives.”  Thus, these pre-hire practices may also violate of the Act.  Technologies such as resume readers and other automated selection tools used during hiring and promotion may also be subject to GC 23-02.

GC 23-02 follows the wave of recent federal guidance from the White House, the Equal Employment Opportunity Commission, and local laws that attempt to define, regulate, and monitor the use of artificial intelligence in decision-making capacities.  Like these regulations and guidance, GC 23-02 raises more questions than it answers.  For example, GC 23-02 does not identify the standards for determining whether business needs “outweigh” employees’ Section 7 rights, or what constitutes “special circumstances” that an employer must show to avoid scrutiny under the Act.

While GC 23-02 sets forth the General Counsel’s proposal and thus is not legally binding, it does signal that there will likely be disputes in the future over artificial intelligence in the employment context.

Article By Steven M. Swirsky, Adam S. Forman, Nathaniel M. Glasser, Neresa A. De Biasi, and Ridhi D. Madia of Epstein Becker & Green, P.C.

For more labor law legal news, click here to visit the National Law Review.

©2022 Epstein Becker & Green, P.C. All rights reserved.

NLRB To Begin Partnering With DOJ To Combat Collusion

The National Labor Relations Board and The Department of Justice joined forces to sign a memorandum of understanding (“MOU”) between the two entities. The MOU follows President Biden’s Executive Order in 2021 aimed at increasing competition in the economy. The NLRB and DOJ plan to coordinate in order to ensure workers are able to freely exercise their rights and to protect competitive labor markets.

According to the DOJ, this new partnership will allow the two agencies to “share information on potential violations of the antitrust and labor laws, collaborate on new policies and ensure that workers are protected from collusion and unlawful employer behavior.” The two agencies plan on greater coordination in information sharing, enforcement activity and training. Furthermore, the two agencies will now refer potential violations that they discover in their own investigations to each other.

For employers, this continues the trend of the federal government stepping up their investigatory and enforcement actions.

Article By Isaac T. Caverly of Polsinelli PC

For more labor and employment legal news, click here to visit the National Law Review.

© Polsinelli PC, Polsinelli LLP in California

Crosshairs: Labor Board Targets Gig Economy, Noncompete Agreements, and More

Many employers in the “gig economy” – such as rideshare companies – rely heavily on independent contractors for various functions within their organizations. Because independent contractors are exempt from coverage under the National Labor Relations Act (NLRA), which includes the right to form or join unions, this appears to have garnered the attention of the National Labor Relations Board’s (NLRB) top lawyer. And it appears the NLRB may be seeking to disrupt those companies’ current staffing models.

According to a recent press release from the agency:

“National Labor Relations Board (NLRB) General Counsel Jennifer A. Abruzzo and Federal Trade Commission (FTC) Chair Lina M. Khan executed a Memorandum of Understanding (MOU) forming a partnership between the agencies that will promote fair competition and advance workers’ rights. The agreement enables the NLRB and FTC to closely collaborate by sharing information, conducting cross-training for staff at each agency, and partnering on investigative efforts within each agency’s authority.”

The statement then goes on to describe specifically how the agencies will be targeting the gig economy:

“The MOU identifies areas of mutual interest for the two agencies, including: labor market developments relating to the ‘gig economy’ such as misclassification of workers and algorithmic decision-making; the imposition of one-sided and restrictive contract provisions, such as noncompete and nondisclosure provisions; the extent and impact of labor market concentration; and the ability of workers to act collectively.”

What does this mean for employers? For one thing, it reinforces that the NLRB is going to be taking a much closer look at workers classified as independent contractors – and likely finding independent contractor status more often. For another, it means the NLRB may soon be looking at noncompete agreements and similar restrictive covenants and finding the maintenance of overbroad terms to be violations of labor law. And while the memorandum calls out the gig economy, it is not limited solely to companies operating in that space.

Employers – in the gig economy and otherwise – should take note of these agencies’ moves and be aware that these issues are likely to receive much scrutiny in the coming months and years.

Article By David J. Pryzbylski of Barnes & Thornburg LLP

For more labor and employment legal news, click here to visit the National Law Review.

© 2022 BARNES & THORNBURG LLP

The FTC Seemingly Thumbs Its Nose at the Supreme Court

Despite the Supreme Court’s recent 6-3 ruling in West Virginia v. EPA that regulatory agencies must have “clear congressional authorization” to make rules pertaining to “major questions” that are of “great political significance” and would affect “a significant portion of the American economy,” and the import of that ruling to the area of noncompete regulation, the Federal Trade Commission (FTC) and National Labor Relations Board (NLRB) announced yesterday that they are teaming up to address certain issues affecting the labor market, including the regulation of noncompetes.

In a Memorandum of Understanding (MOU) issued on July 19, 2022, the FTC and NRLB shared their shared view that:

continued and enhanced coordination and cooperation concerning issues of common regulatory interest will help to protect workers against unfair methods of competition, unfair or deceptive acts or practices, and unfair labor practices. Issues of common regulatory interest include labor market developments relating to the “gig economy” and other alternative work arrangements; claims and disclosures about earnings and costs associated with gig and other work; the imposition of one-sided and restrictive contract provisions, such as noncompete and nondisclosure provisions; the extent and impact of labor market concentration; the impact of algorithmic decision making on workers; the ability of workers to act collectively; and the classification and treatment of workers. (Emphasis added.)

Accordingly, the purpose of the MOU is “to facilitate (a) information sharing and cross-agency consultations on an ad hoc basis for official law enforcement purposes, in a manner consistent with and permitted by the laws and regulations that govern the [FTC and NLRB], (b) cross-agency training to educate each [agency] about the laws and regulations enforced by the other [agency], and (c) coordinated outreach and education as appropriate.”

This follows the Biden Administration’s July 9, 2021 Executive Order in which it “encourage[d]” the FTC to “consider” exercising its statutory rulemaking authority under the FTC Act “to curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility.” Nothing concrete has yet come of that Executive Order, although the MOU perhaps represents the next stage of the FTC’s “consider[ation]” of the issue. As we previously reported, FTC Chairwoman Lina Khan recently told the Wall Street Journal that regulating noncompetes “falls squarely in [the FTC’s] wheelhouse,” and she has never been shy about sharing her view that noncompetes should be banned nationwide and that the FTC has the authority to do so. This view does not appear to have changed despite the Supreme Court’s decision in West Virginia v. EPA.

Only time will tell what, if any, action the FTC takes with respect to regulating noncompetes, but if it does take steps to ban or otherwise limit noncompetes nationwide under Section 5 of the FTC Act, there will no doubt be litigation challenging those regulations. And you can bet that the Supreme Court’s decision in West Virginia v. EPA will be front and center in any such challenge. Indeed, according to Law360, U.S. Chamber of Commerce Executive Vice President and Chief Policy Officer Neil Bradley said that the MOU shows Chairwoman Khan’s vision for the FTC “goes well beyond what is provided in law and what was envisioned by Congress.” Chairwoman Khan does not seem too perturbed by the prospect of challenges to the FTC’s authority in this regard, however, and seems intent on moving forward despite the Supreme Court’s admonition.

Article By Erik W. Weibust and Stuart M. Gerson of Epstein Becker & Green, P.C.

For more antitrust legal news, click here to visit the National Law Review.

©2022 Epstein Becker & Green, P.C. All rights reserved.

NLRB to Decide Organizing Rights of Non-Teaching Employees at Religious Colleges, Universities

NLRB national labor relations boardThe National Labor Relations Board is set to decide if the same test used to determine whether teaching employees of a religious school are subject to the Board’s jurisdiction should be extended to non-teaching employees. Islamic Saudi Academy, Case 05-RC-080474 (May 12, 2016).

In Pacific Lutheran University, 361 NLRB No. 157 (2014), the Board adopted a two-part test for determining whether to exercise jurisdiction over teachers at such schools under the U.S. Supreme Court’s decision in NLRB v. Catholic Bishop, 440 U.S. 490 (1979). The Board held that a college or university claiming that it is exempt from NLRB jurisdiction must first demonstrate it holds itself out as providing a “religious educational environment”. If the school satisfies that requirement, it then must show that it holds out the faculty members who a union is seeking to represent “as performing a specific role in creating or maintaining the college or university’s religious educational environment, as demonstrated by its representations to current or potential students and faculty members, and the community at large.”

On whether a school satisfies the second part of the test, the Board will determine whether the school holds out its faculty members as performing any religious function in creating or maintaining a religious educational environment. The Board noted that evidence in support of this requirement might include showing “that faculty members are required to serve a religious function, such as integrating the institution’s religious teachings into coursework, serving as religious advisors to students, propagating religious tenets, or engaging in religious indoctrination or religious training.” For more on Pacific Lutheran University, see NLRB Announces New Standard for Exercising Jurisdiction Over Religiously Affiliated Colleges and Universities.

Islamic Saudi Academy is a non-profit private educational institution operating an elementary and secondary school at two locations in Fairfax County, Virginia. In May 2012, the Islamic Saudi Academy Employee Professional Association filed a petition to represent, among others, the Academy’s non-teachers, such as nurses, IT employees, librarians, finance clerks, and internal auditors. After several procedural twists and turns, as well as issuance by the Board of its decision in Pacific Lutheran University, the Board ordered the case be remanded to the Regional Director “for further appropriate action consistent with its decision in Pacific Lutheran University.”

The Regional Director decided that, assuming Pacific Lutheran University applies to non-teaching employees at primary and secondary schools, the Academy had not established that the non-teaching classifications were held out as performing a specific religious function and that the Board should assert jurisdiction over the non-teaching classifications. The Academy then requested review by the NLRB.

It is unclear how the second part of the test –holding employees out as performing a religious function — would be applied to non-teaching employees, since the school must show the non-teacher performs a religious function in creating or maintaining a religious educational environment. Certainly, with respect to many non-teachers, satisfying the burden of proof will be a tall order.

Article by Howard M. Bloom & Philip B. Rosen of Jackson Lewis P.C.
Jackson Lewis P.C. © 2016

2015 Union Membership Rate Relatively Stable Despite New NLRB Election Rules

national labor relations boardDespite the National Labor Relations Board’s “quickie election rules,” the percentage of unionized workers in the private sector remained stable during 2015, according to the Bureau of Labor Statistics of the U.S. Department of Labor: 6.7% of private-sector workers were in unions in 2015, up from 6.6% in 2014. Not surprisingly, public-sector workers had a much higher union membership rate: 35.2%.

According to the report, men had a higher union membership rate than women: 11.5% versus 10.6%. In addition, the percentage of African-American workers who were union members was greater than Caucasian workers.

New York (24.6%), Alaska (22.8%), and Hawaii (21.8%) had the highest unionization rates, whereas South Carolina (2.2%), Mississippi (3.7%), and Utah (3.7%) had the lowest.

The report found the median weekly earnings of nonunion workers were lower than the median weekly earnings for unionized workers ($776 per week versus $980 per week). The report, however, recognizes that this comparison may not be valid because the “comparisons of earnings in [the] release are on a broad level and do not control for many factors that can be important in explaining earnings differences.” Indeed, this is likely the case.

Article By Howard M. Bloom & Philip B. Rosen of Jackson Lewis P.C.

Jackson Lewis P.C. © 2016

Target Faces First Ever Union

The Wall Street Journal reports the NLRB has rejected an appeal from Target Corp. seeking to invalidate an employee vote in favor of unionization.  In September, a “micro-unit” of about one dozen pharmacy workers in Brooklyn, NY voted in favor of unionization.  The company appealed, but the NLRB affirmed the vote yesterday.

As reported in the article, “The group of less than a dozen employees in Brooklyn, N.Y., would be the first union among Target’s nearly 350,000 employees, marking a significant milestone for a company that has fought to keep unions out of its stores.”  The complete article can be found here.

Article By John T.L. Koenig of Barnes & Thornburg LLP

© 2015 BARNES & THORNBURG LLP

NLRB Calls Out Punt Team and Declines Jurisdiction Over Northwestern University Football Players

In a mild surprise given the current constitution of the Board (read – majority appointed by President Obama), the NLRB declined to assert jurisdiction in ruling on the petition of Northwestern University’s scholarship football players to unionize.  However, in a display of special teams not seen on a football field in Evanston, Illinois since the days of John Kidd, the NLRB reached its decision without determining if scholarship players were “employees” under the National Labor Relations Act.  Even with this limitation, it is clear competitive balance considerations for NCAA Division I sports has received great deference as a policy matter in a legal dispute.

I will not take this opportunity to point out my initial forecast that the NLRB would find this case extremely unique for its jurisdiction and the original decision by the Chicago NLRB regional office would be reassessed given the potential effect on permissible amateurism.  Not doing it.  It is sufficient to note this decision affirms the desire of the NLRB to see the student-athlete/employee question answered by Congress and/or the NCAA member institutions, although not necessarily in that order.

A fair question in reading the Board’s decision is whether the same result would have occurred if the “Power 5” conferences had not recently enacted measure to provide athletic aid for the full cost of attendance and extra benefits for scholarship athletes.  Since Northwestern University, as a member of the Big Ten, is subject to these new rules, it provided a floor for the enhancement of student-athlete benefits.  The Board noted this enhancement, even though it occurred after the scholarship football players filed their petition and there is no indication it would have been sufficient for collective bargaining purposes.

As the National Labor Relations Act does not cover public employees, it is important to remember the majority of Division I student-athletes participating in revenue-generating sports attend state universities.  The ability of public employees to organize for collective bargaining is governed by state law.  While the NLRB’s decision notes that Ohio and Michigan have recently enacted legislation which precludes union organization by student-athletes of their state universities (putting those perpetual lovebirds, the University of Michigan and The Ohio State University in the same basket), keep an eye on states like Connecticut and Pennsylvania which have recently considered legislation that goes the opposite direction to explicitly provide student-athletes the status of employees for purposes of collective bargaining.

Since this legal issue is by no means resolved, private NCAA institutions are still advised to make sure that NCAA and university-sponsored rules which govern practice time, academic advice and progress, athletic-related activities, and student-athlete wellness are monitored for compliance.  As a best practice, institutions should consider third-party compliance audits which not only uncover hidden legal vulnerabilities, but also are helpful in defusing the concerns which could lead to an organizational effort by the football or basketball team.

ARTICLE BY Tyrone P. Thomas of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

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