Tag: NLRA

Office Politics: The Basics for Private Employers

In case you haven’t noticed the yard signs popping up like mushrooms, the constant barrage of television and radio advertisements, or the unsolicited text messages from unknown numbers, we are in the homestretch of election season. For those employers with questions on how to handle political speech in the workplace, especially during the last few days before (and hopefully not much beyond) Election Day, here is a refresher on the basics for private employers.

The First Amendment to the U.S. Constitution prevents the government from enacting laws to prohibit the free exercise of speech and assembly, among other liberties. It does not apply to private employers. Where there is no state action involved, there is no unfettered right to free speech in a private place of employment. Quite simply, a private employer can enact rules to keep political expression from its workplace. Some employers prohibit political speech in the workplace to avoid potential disruptions to business operations, customer relations, or employee morale.

If an employer adopts a policy concerning political expression and messaging, it must do so fairly and consistently, and it should be inclusive and consistent to avoid the perception of favoritism or discrimination. In other words, if an employer requires Meghan to remove her Kamala button, it should also direct Dennis not to wear his Trump t-shirt. Remote workers are still “in the workplace” when they participate in virtual meetings, so there are no separate rules for them.

When enacting rules about political expression and messaging in the workplace, private employers should of course remain aware of the National Labor Relations Act (NLRA), which applies to both union and non-union settings, and among other things protects employees’ ability to engage in concerted activity or to discuss the terms and conditions of their employment. Therefore, private employers must be mindful of a potential nexus or overlap between employees’ political speech and discussion of working conditions. Under the NLRA, for instance, employees may distribute information during non-working time about a candidate’s stance on a particular issue that may also constitute a complaint about the employees’ working conditions.

© Copyright Babst, Calland, Clements and Zomnir, P.C.
For more on Political Speech, visit the NLR Constitutional Law section.

It’s Election Time: Time Off to Vote, Political Activities, and Political Speech in the Workplace

With Election Day quickly approaching, it is the right time for employers to refresh themselves on the various protections that may exist for their employees when it comes to voting and other political activities. Below is an overview of employees’ rights related to voting and other political activities leave, as well as protections for political speech and activity both in and outside the workplace.

Voting Leave Laws

Approximately thirty states require that employers provide their employees with some form of time off to vote. Twenty-one of these states require that the leave be paid. The exact contours of these laws – such as the amount of leave, notice requirements, and whether there is an exception when the employee has sufficient time outside of working hours to vote – vary by state. For example:

  • In New York, employers must provide leave to employees who do not have sufficient time outside of working hours to vote. An employee is deemed to have sufficient time to vote if the polls are open for four consecutive hours before or after the employee’s shift. Employees who do not have such a four-hour window are eligible to take the amount of leave that will – when added to their voting time outside working hours – enable them to vote, up to two hours of which must be without loss of pay. Employees may take time off for voting only at the beginning or end of their shift, as designated by the employer, unless otherwise mutually agreed to between the employee and employer. Employees are required to notify their employer that working time off to vote is needed between two and ten working days before the election.
  • Similarly, in California, employees are entitled to sufficient time off to vote, up to two hours of which must be paid. Unless the employer and employee agree otherwise, the employee must take the leave at the beginning or end of the employee’s shift, whichever allows the most time to vote and the least time off from work. Employees are required to provide notice that time off to vote is needed at least two working days before the election.
  • In the Washington, D.C., employees are entitled to up to two hours of paid leave to vote in either an election held in D.C. if the employee is eligible to vote in D.C., or in an election held in the jurisdiction in which the employee is eligible to vote. Employees must submit requests for leave a reasonable time in advance of the election date. Employers may specify the hours during which employees may take leave to vote, including requiring employees to vote during the early voting period or vote at the beginning or end of their shift during early voting or election day.
  • In Illinois, employers must provide two hours of paid voting leave to employees whose shifts begin less than two hours after the opening of the polls and end less than two hours before the closing of the polls. Employees must provide notice of the need for leave before the day of the election.
  • In Maryland, employees are entitled to up to two hours of paid voting leave, unless the employee has at least two non-working hours to vote while the polls are open. Employees must furnish proof to their employers that they either voted or attempted to vote, which can be in the form of a receipt issued by the State Board of Elections.

Certain states, includingNew York, California, and Washington, D.C., require that employers post a notice of an employee’s right to take leave in a conspicuous location before the election. Sample notices have been published by the New York State Board of Elections, the California Secretary of State, and D.C. Board of Elections.

Other Political Leave Laws

Some states require that employers provide leave for political-related reasons beyond just voting. For example:

  • Alabama, Delaware, Illinois, Kentucky, Nebraska, Ohio, Virginia, and Wisconsin require that certain employers provide unpaid leave for employees to serve as election judges or officials on Election Day. In Minnesota, employees are entitled to paid leave for this reason; however, employers may reduce an employee’s salary or wages by the amount the employee receives as compensation for their service as an election judge.
  • Minnesota and Texas require that certain employers provide employees with unpaid leave to attend party conventions and/or party committee meetings.
  • Connecticut, Iowa, Maine, Nevada, Oregon, South Dakota, and Vermont require that certain employers provide employees with an unpaid leave of absence to serve as elected members of state government. In Iowa, employees are also entitled to leave to serve in a municipal, county, or federal office.
  • In Vermont, employees may take unpaid leave to vote in annual town hall meetings.

Some of these laws only apply to larger employers. For example, in Nevada, employers with at least fifty employees are required to provide leave for employees to serve as members of the state legislature. State laws also vary with respect to the amount of notice that employees must provide to their employers in order to be eligible for leave.

Political Speech in the Workplace

In our current political climate, many employers are concerned with what steps they can take regarding political speech and activity in the workplace. When these discussions or activities occur during working hours, they have the potential to negatively impact performance, productivity, or even possibly cross the line into bullying or unlawful harassment.

When employees publicly attend political rallies or support causes on social media, they may also (intentionally or not) create an actual, or perceived, conflict of interest with their employer. The complicated question of what exactly employers can do around employee political speech and activity is governed by various sources of law, some of which is discussed below.

Additionally, for employers with designated tax statuses, certain political speech can give pose risk to an organization’s tax-exempt status. Many tax exempt-organizations are subject to significant restrictions on lobbying and political activities. For example, 501I(3) organizations risk losing their tax-exempt status if they engage in political campaign activities or if a substantial part of its activities involves lobbying. Speech by an employee that constitutes political campaign or lobbying activity risks being attributed to an organization if an employee’s speech is seen as representative of the organization and being ratified by the organization. For example, if an employee urges their social media followers to contact their state representative about proposed legislation, this risks carrying the inference that the employee was speaking on behalf of the organization.

Employee “Free Speech”

There is no general right to “free speech” in a private sector workplace. Because the U.S. Constitution is primarily concerned with state actors, the First Amendment does not prevent private employers from prohibiting or restricting political speech in the workplace. Therefore, subject to certain exceptions discussed below, private sector employers are generally able to enact prohibitions around discussing politics at work and discipline employees for violating such policies.

However, as noted, an employer’s ability to restrain political speech in the workplace comes with some restrictions. At the federal level, Section 7 of the National Labor Relations Act (“NLRA”), which applies to both unionized and non-union employees, protects certain “concerted activities” of employees for the purposes of “mutual aid or protection.” Political speech or activity that is unrelated to employment, such as an employee distributing pamphlets generally encouraging co-workers to vote for a candidate or support a political party, would not likely be covered or protected by the NLRA. The NLRA therefore does not universally prevent employers from prohibiting political discussions or activities in the workplace.

However, political speech may be protected by the NLRA when it relates to the terms or conditions of employment, such as communicating about wages, hours, workplace safety, company culture, leaves, and working conditions. Therefore, an employee encouraging co-workers to vote for a candidate because the candidate supports an increase in the minimum wage might claim to come under the protection of the NLRA.

State laws may also place certain limitations on employer attempts to restrict employee political speech. For example, Connecticut law prohibits employers from taking adverse action against employees for exercising their First Amendment rights, provided that such activity does not interfere with the employee’s job performance or the employment relationship.

Lawful Outside Activity/Off-Duty Conduct

Many states have laws that prohibit adverse action against employees based on lawful activities outside the workplace, which may include political activities. For example:

  • In approximately a dozen states, employers are prohibited from preventing employees from participating in politics or becoming candidates for public office. New York Labor Law § 201-d prohibits employers from discharging or otherwise discriminating against employees because of their “political activities outside of working hours, off of the employer’s premises and without use of the employer’s equipment or other property, if such activities are legal.” Political activities include (1) running for public office, (2) campaigning for a candidate for public office, or (3) participating in fund-raising activities for the benefit of a candidate, political party, or political advocacy group. Similar laws exist in California, Louisiana, and Minnesota, among other states.
  • Other states – including Delaware, Florida, Massachusetts, and New Jersey– prohibit employers from attempting to influence an employee’s vote in an election. In Florida, “[i]t is unlawful for any person … to discharge or threaten to discharge any employee … for voting or not voting in any election, state, county, or municipal, for any candidate or measure submitted to a vote of the people.” A dozen or so states approach this issue in a more limited fashion by prohibiting employers from attaching political messages to pay envelopes.
  • At least two states, Illinois and Michigan, prohibit employers from keeping a record of employee’s associations, political activities, publications, or communications without written consent.
  • Washington, D.C. prohibits discrimination in employment on the basis of political affiliation. Despite its seemingly broad scope, this statute has been interpreted to only protect political party membership and not (1) membership in a political group, or (2) other political activities, such as signing a petition.

These laws vary considerably from state to state, so it is important for employers to consult the laws when considering policies or rules around employee political activity.

* * *

As the election approaches and early voting takes place, employers should review the applicable laws for each jurisdiction in which they operate and ensure that their policies and practices are compliant. Employers should also ensure that managers are well versed in the employer’s policies around voting and political speech and activities so that they can properly respond as situations arise.

© 2024 Proskauer Rose LLP.
For more on Workplace Speech, visit the NLR Labor Employment section.

NLRB General Counsel Takes Issue with “Stay-or-Pay” Employment Provisions

On October 7, 2024, the General Counsel (GC) for the National Labor Relations Board (NLRB) issued a 17-page memorandum urging the NLRB to find so-called “stay-or-pay” provisions unlawful and to impose harsh monetary penalties on employers that use such provisions.

On October 15, 2024, the U.S. Department of Labor (DOL) similarly announced that it will combat stay-or-pay clauses, among other provisions in employment agreements that the DOL describes as “coercive.”

What is a “stay-or-pay” provision?

A stay-or-pay provision is a requirement that an employee pay their employer for certain expenditures made for the employee’s benefit if the employee separates from employment within a specified period of time. Examples include training repayment agreement provisions (sometimes referred to as “TRAPs”), and provisions requiring employees to repay signing bonuses, moving expenses, or tuition reimbursement.

Why does the NLRB GC take issue with such provisions?

The GC’s latest memorandum is essentially an addendum to her prior memorandum criticizing non-compete covenants. In her view, stay-or-pay provisions violate the National Labor Relations Act (NLRA) because, as she interprets them, they are akin to non-compete covenants that unlawfully restrict employees from changing jobs.

We don’t have union employees. Does the NLRA even apply to our business?

Yes. Under Section 7 of the NLRA, employees in both unionized and nonunionized workforces have the right to join together in an effort to improve the terms and conditions of their employment. Specifically, Section 7 grants employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, or to refrain from any and all such activities.” Although certain types of workers, such as managers, supervisors, and independent contractors, are not entitled to such rights, Section 7 of the NLRA otherwise applies to all workers – whether unionized or not.

Do I really need to be concerned about the NLRB GC’s memorandum, and is it legally binding on my business?

The memorandum does not carry the force of a statute or regulation or case law. And it’s not even the stance of the NLRB. It’s essentially the NLRB GC’s guidance for the stance she is encouraging the NLRB to take with respect to these types of provisions.

That said, the memorandum is getting a lot of publicity in the press and online, which means employees who have heard about it may become skeptical about the enforceability and/or legality of their stay-or-pay provisions. This, in turn, may embolden employees to make a move, as they may be less fearful of their repayment obligations.

Will the NLRB GC’s memorandum apply prospectively, or will it also apply retroactively?

If the NLRB adopts the GC’s view, then yes, the memorandum would apply both to agreements entered into in the future, as well as to agreements already signed by employees and former employees. However, it affords employers a 60-day period from the date of the memorandum to “cure” any pre-existing stay-or-pay provisions before facing potential prosecution.

What are the potential consequences for my business if the NLRB adopts the GC’s view?

The GC expects employers to make employees whole, which may mean rescinding or rewriting the agreement or reimbursing former employees for sums repaid pursuant to their agreements. She goes further and suggests that an employer must compensate an employee if the employee can demonstrate that “(1) there was a vacancy available for a job with a better compensation package; (2) they were qualified for the job; and (3) they were discouraged from applying for or accepting the job because of the stay-or-pay provision.”

Is there any way the stay-or-pay provisions used by my business aren’t objectionable?

According to the GC, a stay-or-pay provision is reasonable if (a) it is entered into voluntarily in exchange for a benefit to the employee (as opposed to, for example, being a condition of employment), (b) the repayment amount is reasonable and specific, (c) the “stay” period is reasonable, and (d) it does not require repayment if the employee is terminated without cause.

We do use stay-or-pay provisions in our business. What should we do now?

Your course of action depends on your appetite for risk. At a minimum, we encourage you to consult with your company’s legal counsel to discuss the full import of the memorandum, risks, and options for your business, as there are a lot more details and nuances in those 17 pages than we can summarize here.

Going forward, some employers might consider alternatives to stay-or-pay provisions, such as stay bonuses (e.g., instead of paying a signing bonus and requiring recoupment if an employee leaves within two years following their date of hire, condition payment of the bonus on the employee staying for a period of two years.) Of course, the hitch with this approach is that it may impact the enforceability of non-compete or non-solicitation covenants in states that require up-front consideration to impose such covenants for at-will employees.

Notably, the GC’s 60-day moratorium takes us to December 6, which is a full month following Election Day. By now, employers are familiar with the makeup of the NLRB changing depending on the party occupying the White House, and if there is a shift in political power come November, that may result in a newly constituted NLRB with new policy preferences. With that in mind, some employers may opt to use a wait-and-see approach before making any changes – whether to existing agreements or retention strategies going forward.

 
© 2024 Much Shelist, P.C.
For more on Stay-or-Pay, visit the NLR Labor Employment section.

It’s Protected: NLRB Finds “Black Lives Matter” Insignia on Employee Uniform Constitutes Protected Activity Under Circumstances

The National Labor Relations Board (“NLRB”), in a 3-1 decision, held that an employee’s display on their work uniform of “BLM,” an acronym for Black Lives Matter, constituted protected concerted activity under Section 7 of the National Labor Relations Act (“Act”). Accordingly, the NLRB reversed an Administrative Law Judge (“ALJ”) decision, and found that the employer (Home Depot) violated Section 8(a)(1) of the Act by directing the employee to remove the BLM insignia because it violated the company’s uniform policy. The employee resigned instead of removing the insignia from their uniform.

Procedural History

In June 2022, an ALJ found that the employer did not violate the Act by requiring the employee to remove the BLM messaging, because the insignia lacked “an objective, and sufficiently direct, relationship to terms and conditions of employment.” The ALJ concluded that the BLM messaging was “primarily used, and generally understood, to address the unjustified killings of Black individuals by law enforcement and vigilantes … [and] while a matter of profound societal importance, is not directly relevant to the terms, conditions, or lot of Home Depot’s employees as employees.” (emphasis in original).

Further, the ALJ determined that the employee’s motivation for displaying the BLM message (i.e., their dissatisfaction with their treatment as employees) was not relevant. The petitioner sought review before the NLRB.

NLRB Finds Wearing BLM Insignia at Work Constitutes Protected Activity

On review, the NLRB concluded that the employee’s refusal to remove the BLM insignia was protected concerted activity under Section 7 of the Act because the activity was for “mutual aid or protection,” as it was a “logical outgrowth” of the employee’s and other employees’ complaints about race discrimination in the workplace that allegedly occurred over the preceding months.

According to the NLRB, an individual employee’s actions are a “logical outgrowth” of the concerns expressed by the group where “the record shows the existence of a group complaint,” even though “the employees acted individually and without coordination.” In this case, the fact that the group complaints post-dated the employee’s initial display of the BLM insignia was not dispositive. Instead, and contrary to the ALJ’s conclusion, the NLRB focused on whether the employee’s subsequent refusal to remove the BLM insignia was a “logical outgrowth” of the prior protected concerted activity.

Additionally, the NLRB found that no special circumstances existed, such that there was a sufficient justification for the company to preclude their employees from wearing such insignia. For instance, this was not a situation where display of the insignia might jeopardize employee safety, exacerbate employee dissention, or unreasonably interfere with the company’s public image. In this regard, the NLRB concluded that the company’s public image was not at issue because it encourages employees to customize their uniforms. Likewise, the NLRB held that the company failed to put forth evidence of any non-speculative imminent risks to employee safety from the public and/or any violent or disruptive acts or threats thereof by other employees connected to the BLM insignia.

The NLRB ordered the employer to, among other things, (1) cease and desist from prohibiting employees from taking part in “protected concerted activities,” such as displaying “Black Lives Matter” insignia on their uniform aprons; (2) reinstate the employee without prejudice and compensate him for lost back pay and any adverse tax consequences; and (3) post notice of the decision for 60 days at the store where the dispute arose. The company may still appeal the Board’s decision to a federal appeals court.

Significantly, the NLRB declined to adopt a broader objective advanced by the NLRB General Counsel that protesting civil rights issues on the job is “inherently concerted” activity that is protected by Section 7 of the Act. The fact-intensive reasoning behind the NLRB’s decision here reflects that the underlying circumstances in each situation will play a significant role in the legal outcome as to whether the conduct at issue is protected, and it is not advisable to adopt a broad, one-size fits all rule from this decision.

© 2024 Proskauer Rose LLP.
For more news on Protected Concerted Activity under the NLRA, visit the NLR Labor & Employment section.

New Year, (Potentially) New Rules?

SOMETIMES, THE ONLY CONSTANT IS CHANGE. THIS NEW YEAR IS NO DIFFERENT.

In 2023, we saw several developments in labor and employment law, including federal and state court decisions, regulations, and administrative agency guidance decided, enacted, or issued. This article will summarize five proposed rules and guidance issued by the Department of Labor (“DOL”), the National Labor Relations Board (“NLRB”), the United States Equal Employment Opportunity Commission (“EEOC”), and the Occupational Safety and Health Administration (“OSHA”), which will or may be enacted in 2024.

DOL’s Proposed Rule to Update the Minimum Salary Threshold for Overtime Exemptions

In 2023, the DOL announced a Notice of Proposed Rulemaking (“NPRM”) recommending significant changes to overtime and minimum wage exemptions. Key changes include:

  • Raising the minimum salary threshold: increasing the minimum weekly salary for exempt executive, administrative, and professional employees from $684 to $1,059, impacting millions of workers;
  • Higher Highly Compensated Employee (HCE) compensation threshold: increasing the total annual compensation requirement for the highly compensated employee exemption from $107,432 to $143,988; and
  • Automatic updates: automatically updating earning thresholds every three years.

These proposed changes aim to expand overtime protections for more employees and update salaries to reflect current earnings data. The public comment period closed in November 2023, so brace yourselves for a final rule in the near future. For more information: https://www.federalregister.gov/documents/2023/09/08/2023-19032/defining-and-delimiting-the-exemptions-for-executive-administrative-professional-outside-sales-and

DOL’s Proposed Rule on Independent Contractor Classification under the Fair Labor Standards Act

The long-awaited new independent contractor rule under the Fair Labor Standards Act (“FLSA”) may soon be on the horizon. The DOL proposed a new rule in 2022 on how to determine who is an employee or independent contractor under the FLSA. The new rule will replace the 2021 rule, which gives greater weight to two factors (nature and degree of control over work and opportunity for profit or loss), with a multifactor approach that does not elevate any one factor. The DOL intends this new rule to reduce the misclassification of employees as independent contractors and provide greater clarity to employers who engage (or wish to engage) with individuals who are in business for themselves.

The DOL is currently finalizing its independent contractor rule. It submitted a draft final rule to the Office of Management and Budget (OMB) for review in late 2023. While an exact date remains unknown, the final rule is likely to be announced in 2024. More information about the rule can be found here: https://www.federalregister.gov/documents/2022/10/13/2022-21454/employee-or-independent-contractor-classification-under-the-fair-labor-standards-act

NLRB’s Joint-Employer Standard

The NLRB has revamped its joint-employer standard under the National Labor Relations Act (“NLRA”). The NLRB replaced the 2020 standard for determining joint-employer status under the NLRA with a new rule that will likely lead to more joint-employer findings. Under the new standard, two or more entities may be considered joint employers of a group of employees if each entity: (1) has an employment relationship with the employees and (2) has the authority to control one or more of the employees’ essential terms and conditions of employment. The NLRB has defined “essential terms and conditions of employment” as:

  • Wages, benefits, and other compensation;
  • Hours of work and scheduling;
  • The assignment of duties to be performed;
  • The supervision of the performance of duties;
  • Work rules and directions governing the manner, means, and methods of the performance of duties and the grounds for discipline;
  • The tenure of employment, including hiring and discharge; and
  • Working conditions related to the safety and health of employees.

The new rule further clarifies that joint-employer status can be based on indirect control or reserved control that has never been exercised. This is a major departure from the 2020 rule, which required that joint employers have “substantial direct and immediate control” over essential terms and conditions of employment.

The new standard will take effect on February 26, 2024, and will not apply to cases filed before the effective date. For more information on the final rule: https://www.federalregister.gov/documents/2023/10/27/2023-23573/standard-for-determining-joint-employer-status

EEOC’s Proposed Enforcement Guidance on Harassment

A fresh year brings fresh guidance! On October 2023, the EEOC published a notice of Proposed Enforcement Guidance on Harassment in the Workplace. The EEOC has not updated its enforcement guidance on workplace harassment since 1999. The updated proposed guidance explains the legal standards for harassment and employer liability applicable to claims of harassment. If finalized, the guidance will supersede several older documents:

  • Compliance ManualSection 615: Harassment (1987);
  • Policy Guidance on Current Issues of Sexual Harassment(1990);
  • Policy Guidance on Employer Liability under Title VII for Sexual Favoritism (1990);
  • Enforcement Guidance on Harris v. Forklift Sys., Inc. (1994); and
  • Enforcement Guidance on Vicarious Employer Liability for Unlawful Harassment by Supervisors(1999).

The EEOC accepted public comments through November 2023. After reviewing the public comments, the EEOC will decide whether to finalize the enforcement guidance. While not law itself, the enforcement guidance, if finalized, can be cited in court. For more information about the proposed guidance: https://www.eeoc.gov/proposed-enforcement-guidance-harassment-workplace

OSHA’s Proposed Rule to Amend Its Representatives of Employers and Employees Regulation

Be prepared to see changes in OSHA on-site inspections. Specifically, OSHA may reshape its Representatives of Employers and Employees regulation. In August 2023, OSHA published an NPRM titled “Worker Walkaround Representative Designation Process.” The NPRM proposes to allow employees to authorize an employee or a non-employee third party as their representative to accompany an OSHA Compliance Safety and Health Officer (“CSHO”) during a workplace inspection, provided the CSHO determines the third party is reasonably necessary to conduct the inspection. This change aims to increase employee participation during walkaround inspections. OSHA accepted public comments through November 2023. A final rule will likely be published in 2024.

For more information about the proposed rule to amend the Representatives of Employers and Employees regulation: https://www.federalregister.gov/documents/2023/08/30/2023-18695/worker-walkaround-representative-designation-process

Preparing for 2024

While 2023 proved to be a dynamic year for Labor and Employment law, 2024 could be either transformative or stagnant. Some of the proposed regulations mentioned above could turn into final rules, causing significant changes in employment law. On the other hand, given that 2024 is an election year, some of these proposed regulations could lose priority and wither on the vine. Either way, employers should stay informed of these ever-changing issues.

© 2023 Ward and Smith, P.A.. All Rights Reserved.
       
For more news on 2024 Labor and Employment Laws, visit the NLR Labor & Employment section.

NLRB Issues Memo on Non-competes Violating NLRA

On May 30, 2023, Jennifer Abruzzo, the general counsel for the National Labor Relations Board (NLRB), issued a memorandum declaring that non-compete agreements for non-supervisory employees violates the National Labor Relations Act. The memo explains that having a non-compete chills employees’ Section 7 rights when it comes to demanding better wages. The ­theory goes that employees cannot threaten to resign for better conditions because they have nowhere to go. Non-compete agreements also prohibit employees from seeking better working conditions with competitors and/or soliciting coworkers to leave with them for a local competitor.

Experts have yet to weigh in, but ultimately this issue will be decided by the federal courts. As an employer, if you employ any non-supervisory employees that are subject to a non-compete agreement, an unfair labor practice charge could be filed, and it appears the NLRB would lean towards invalidating the agreement, though all evidence would have to be taken into consideration.

© 2023 Jones Walker LLP

For more Employment Legal News, click here to visit the National  Law Review.

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

Supreme Court Set to Decide Whether NLRA Preempts State Law Claims for Property Damage Caused During Strikes

The U.S. Supreme Court’s upcoming term will include review of whether the National Labor Relations Act (the “Act”) preempts state court lawsuits for property damage caused during strikes, which could have significant implications for employers and unions.

Factual Background

The case – Glacier Northwest Inc. v. International Brotherhood of Teamsters Local Union No. 174 – began over five years ago when the Union in Washington State representing the Employer’s truck drivers went on strike.  The Union timed their strike to coincide with the scheduled delivery of ready-mix concrete, and at least 16 drivers left trucks that were full of mixed concrete, forcing the Employer to rush to empty the trucks before it hardened and caused damage.  The Employer was able to do so, but incurred considerable additional expenses and, because it dumped the concrete in order to avoid truck damage, lost its product.

Employer Brings State Law Suit for Property Damage

After the incident, the Employer sued the Union under Washington State law for intentional destruction of property.  The Union argued that the suit was preempted by the Supreme Court’s decision in San Diego Building Trades Council v. Garmon, 359 U.S. 236 (1959) (“Garmon”).  In Garmon, the Supreme Court held that, although the Act does not expressly preempt state law, it impliedly preempts claims based on conduct that is “arguably or actually protected by or prohibited by the Act.”  The Supreme Court held in Garmon that conduct is “arguably protected” when it is not “plainly contrary” to the Act or has not been rejected by the courts or the National Labor Relations Board (the “Board”).

State Court Holdings

The Washington State trial court dismissed the Employer’s suit for property damage because strikes are protected by the Act.  The Washington Court of Appeals reversed, holding that intentional destruction of property during a strike was not activity protected by the Act, and thus, not preempted under Garmon.

Finally, the Washington Supreme Court reversed again, holding that the Act impliedly preempts the state law tort claim because the intentional destruction of property that occurred incidental to a work stoppage was at least arguably protected, and the Board would be better-suited to make an ultimate determination on this legal issue.

Question Before the Supreme Court

The Supreme Court will now determine whether the National Labor Relations Act bars state law tort claims against a union for intentionally destroying an employer’s property in the course of a labor dispute.

Under Garmon, the Act does not preempt suits regarding unlawful conduct that is plainly contrary to the NLRA, and the Employer argues that the strike at issue here was plainly unprotected because of the intentional destruction of property.  In other words, the conduct is not even arguably protected by the Act such that the Act would preempt – it was, rather, plainly unprotected conduct, and thus, the proper subject of a lawsuit.  The Employer also cited the “local feeling” exception to Garmon, which creates an exception to preemption where the States may have a greater interest in acting, such as in the case of property damage or violence.

The Union argued in opposition to the Employer’s certiorari petition that the Employer merely challenged the Washington Supreme Court’s conclusion that the conduct was arguably protected by the Act, and not its reasoning.  Moreover, whether or not the conduct was protected should be decided by the Board, which is better-suited to decide the matter.

Takeaway

Employers should gain much greater clarity into whether they can seek relief from such conduct via a damages lawsuit.  If the Court finds that such conduct is not preempted and may be litigated in state court, such a ruling could go far in protecting employers’ interests in contentious labor disputes and potentially shift the balance of power towards employers during these disputes.

Article By Michael J. Lebowich, Joshua S. Fox, and Thomas B. Fiascone of Proskauer Rose LLP

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

© 2022 Proskauer Rose LLP.

Could Leagues and Teams be Joint Employers Before the NLRB?

The National Labor Relations Board (NLRB) has released a Notice of Proposed Rulemaking to change the standard for determining if two employers may be joint employers under the National Labor Relations Act (NLRA). The proposed rule, expected to become effective sometime in 2023, could make it more likely that professional and collegiate leagues would be found to be joint employers of any unionized professional players or collegiate student-athletes who play for teams that are members of those leagues.

As a joint employer of unionized players of member teams, a league could be jointly responsible for unfair labor practices committed by the teams or the team’s supervisors or managers (i.e., coaches and administrators), be required to participate in collective bargaining negotiations with the teams concerning the wages and other terms and conditions of employment of the players, and picketing directed at the league would be considered primary and therefore permissible (rather than secondary and subject to injunction).

Currently, the NLRB will find two or more employers to be joint employers if there is evidence that one employer has actually exercised direct and regular control over essential employment terms of another employer’s employees. An employer that merely reserves the right to exercise control or that has exercised control only indirectly will not be found to be a joint employer. The NLRB has proposed that the Browning Ferris standard be restored. Under the proposed rule, two or more employers will be found to be joint employers if they “share or codetermine those matters governing employees’ essential terms and conditions of employment.” Importantly – and the critical import of the proposed rule – the NLRB will consider both evidence that direct control has been exercised and that the right to control has been reserved (or exercised indirectly) over these essential terms and conditions of employment when reviewing two or more employers for status as joint employers.

Professional athletes are employees under Sec. 2(3) of the NLRA, of course. As for collegiate student-athletes, NLRB General Counsel Jennifer Abruzzo issued a memorandum, GC 21-08, announcing the intention to consider scholarship athletes at private colleges and universities to be employees because, as she wrote, they “perform services for their colleges and the NCAA, in return for compensation, and subject to their control.” Stating in summation “that this memo will notify the public, especially Players at Academic Institutions, colleges and universities, athletic conferences, and the NCAA, that [she] will be taking that legal position in future investigations and litigation” under the NLRA, Abruzzo signaled that conferences, leagues, and the NCAA will face joint-employer analysis in an appropriate case.

The “essential terms and conditions of employment” will translate to the sports workplace in the nature of game, practice and meeting times, travel and accommodation standards, equipment and safety standards, conduct rules and disciplinary proceedings, the length of a season, the number of games and playoff terms, and numerous other areas. Professional leagues may already coordinate with their member teams on a number of employment terms for players. For collegiate conferences and leagues, this may be new. Under the current standard, a league could better insulate itself from the decisions made by its members’ coaches and administrators by not exercising direct involvement in those matters. Under the proposed rule, a league or conference that merely has the power (even if reserved and unexercised) to make decisions affecting the “work” conditions for student-athletes could be jointly liable along with the institution for decisions made solely by the institution’s agents.

Consequently, conferences and leagues should consider training managers on their responsibility under the NLRA to private sector employees. They should also consider the role they want to play in collective bargaining should any of the student-athletes at their member institutions unionize.

Article By Patrick L. Egan of Jackson Lewis P.C.

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

Jackson Lewis P.C. © 2022