Hunton Profile

Administrative Law Task Force

The Administrative Task Force plays a critical role in keeping our OSHA practice current and vibrant.  We follow developments daily and we work together to analyze the impact that proposed and actual changes will have on the law in general and specifically on our client’s industries. Employers today face an unprecedented range of workplace safety and OSHA legal issues as government increases worker safety and health regulation and demands meticulous reviews by its OSHA inspection force.

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Board Requires Employers to Pay Taxes on Backpay

As a result of the National Labor Relations Board’s (the “Board”) decision in Latino Express, Inc., 359 NLRB No. 44 (Dec. 18, 2012), employers will now have greater obligations in cases where individuals are awarded lump-sum backpay.  Making good on its earlier promise, the Board held that employers must reimburse individuals for any additional federal or state income taxes, which may result when a lump-sum backpay award covers more than one calendar year.  The Board also held that employers must submit appropriate documentation to the Social Security Administration (“SSA”) so that backpay is allocated to the appropriate calendar quarters.  The Board’s decision follows, a March 2011 memorandum issued by Acting General Counsel, Lafe Solomon, in which he addressed both of these issues instructing Regions to seek a remedy with a tax component in cases involving lump-sum backpay as well as a remedy requiring employers to notify the SSA of the appropriate periods for allocating backpay.

Backpay is considered wages by the IRS and under the Social Security Act.  When it is paid as a lump sum, regardless of when it was earned, it is treated as income earned in the year the award is paid and posted to the employee’s social security earnings record for that year as well.  In Latino Express, the Board explained that individuals who receive a lump-sum backpay award that covers more than one calendar year, may be bumped into a higher tax bracket and therefore owe more taxes than if they had simply received those wages when they were or would be earned.  Additionally, the Board provided three scenarios in which an individual’s social security benefits could be impacted by a lump-sum backpay award noting that such an award may 1) hinder the individual’s accumulation of social security credits needed to qualify for participation in old-age social security; 2) increase wages so that the individual’s income exceeds the annual contribution and benefit base for a given year; and 3) reduce monthly social security benefits for retirees.
 
The Board reasoned that employers should pay any additional taxes on lump-sum backpay because courts and administrative agencies frequently order such relief.  To justify its requirement that employers file reports with the SSA, the Board noted that the burden on employers of filing these reports is not a heavy one and that the wrongdoer should bear the consequences of its unlawful conduct.  Most importantly, however, the Board’s based its decision on the remedial policies of the National Labor Relations Act and ensuring that individuals are truly made whole and not disadvantaged a second time. 

The Board’s decision will be applied retroactively and therefore impact all pending and future cases.  Because numerous cases involved awards of backpay this will have a significant impact on employers who come before the Board.

NLRB Judge Invalidates "Chilling" Social Media Policy Despite Savings Clause

On September 20, 2012, Administrative Law Judge Clifford H. Anderson struck down telecommunications company EchoStar Corp.’s policy prohibiting employees from making disparaging comments about it on social media sites. The NLRB judge found that the prohibition, as well as a ban on employees using social media sites with company resources or on company time, chilled employees’ exercise of their rights under Section 7 of the National Labor Relations Act (“NLRA”). The EchoStar decision comes on the heels of the NLRB’s recent ruling striking down Costco Wholesale Corp.’s policy barring employees from posting statements online that were harmful to the company’s reputation.

In EchoStar, the judge held that the clause prohibiting “disparaging” comments was overbroad and failed to include exceptions for speech that may be critical of the company but is nonetheless protected by Section 7 of the NLRA. In doing so, he rejected the company’s argument that the challenged provision was not overbroad when read in the context of the entire social media policy and an accompanying employee handbook, which included a savings clause stating that in the event of a conflict between EchoStar policy and the law, “the appropriate law shall be applied and interpreted so as to make the policy lawful.” The judge found that a reasonable employee would not react to the savings clause by “losing the chill that the rule under challenge causes.” That the policy went on to tell employees to “remember to use good judgment” in deciding what types of comments to post to social media sites was found to be similarly ineffective at convincing a reasonable employee that the exercise of his or her Section 7 rights remained uninhibited.

The EchoStar decision echoes the reasoning of the Costco decision, and indicates that the NLRB will continue to subject broad social media policies that restrict employee speech without any specific limitations to harsh scrutiny. The case also reinforces the guidance in NLRB Acting General Counsel Lafe Solomon’s three memoranda issued earlier this year stating that restrictions on the usage of social media must be narrowly tailored and clear, and vague policies will be found to be overbroad even if they contain a general savings clause.

NLRB On A Mission To Curb Anti-Social Media Policies In The Workplace

In recent years, the National Labor Relations Board (NLRB) and unions have placed a growing emphasis on extending the application of labor law into the social media arena.  As part of this initiative, the NLRB has adopted a strong stance against social media policies that it believes pose a threat to employees’ right to engage in protected activities under Section 7 of the National Labor Relations Act (NLRA).

Section 7 of the NLRA protects, among other things, an employee’s right to self-organization; to form, join, or assist labor organizations; to bargain collectively through representatives of their own choosing; to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection; and to disclose, expose, debate and disclose terms and conditions of employment.  29 U.S.C. § 157.  Employer policies regulating social media use will be held to violate Section 8(a)(1) of the NLRA if it “interfere[s] with, restrain[s], or coerce[s] employees in the exercise of the rights guaranteed in section 7.”  29 U.S.C. § 158. 

In the last ten months, Lafe E. Solomon, the acting general counsel for the NLRB, has issued three reports discussing how the agency has handled the increase in the number of charges being brought against employers for allegedly unlawful social media policies.  According to Solomon,

[An employer’s policy] is clearly unlawful if it explicitly restricts Section 7 protected activities.  If the rule does not explicitly restrict protected activities, it will only violate Section 8(a)(1) upon a showing that: (1) employees would reasonably construe the language to prohibit Section 7 activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7 rights.

Memorandum OM 12-59.  Also according to Solomon, “[r]ules that are ambiguous as to their application to Section 7 activity, and contain no limiting language or context that would clarify to employees that the rule does not restrict Section 7 rights, are unlawful.”  Memorandum OM 12-59.

The most recent May 30, 2012 report provides specific examples of policies that the General Counsel’s office believes are acceptable policies. This latest report has been garnering criticism for what some are calling a heavy-handed approach.  Based on this recent report, the general take-away points for employers are that broad and general social media policies will most likely be invalid, including but not limited to those that use broad terms like “appropriate” or “inappropriate” without the use of limiting language or examples of what would be considered “inappropriate,” those that prohibit posting photos that include company logos without any limiting language, or those that prohibit disclosing confidential information without any guidance as to what the employer considers confidential.  For example, the following types of social media provisions will likely not pass muster -- broad restrictions on releasing confidential information about the company or coworkers; broad restrictions on sharing confidential information with coworkers; instructions that an employee must ensure that posts are completely accurate and not misleading and that they do not reveal non-public information on any public site; prohibitions against posting personal information about other employees and contingent workers, commenting on “legal matters,” picking fights, engaging in controversial discussions, and airing complaints online; or a requirement that an employee obtain permission prior to posting questionable material.  Furthermore, global savings clauses in social media policies that state something to the effect that nothing in the policy is intended to infringe upon an employee’s NLRA rights will not fix invalid provisions within the policies; instead, each provision will be assessed on its own.

The obvious challenges to employers, both with unionized and nonunionized workforces, is how to have a broad enough social media policy to protect against, among other things, possible damage to the company’s reputation, business relationships, and competitive advantage, possible loss of company trade secrets or intellectual property, possible liability associated with employees posting harassing, confidential, and/or other inappropriate material on other employees, and possible violations of Federal Trade Commission regulations which place restrictions on employee endorsement of employer products or services, while still trying to comply with the NLRB’s restrictive positions on social media policies.  Nevertheless, given the growing business concerns associated with employees’ increased use of social media and the NLRB’s focus on employer social media policies, employers should consider reviewing and updating their social media policies and any other related policies, like non-harassment policies, that may also have social media implications.

NLRB Prepared To Move Full Steam Ahead With "Quickie Election" Rules

As we reported earlier, the path appears (at least temporarily) clear for the NLRB’s new “quickie election” rules to take effect.  In anticipation of the effective date, Board General Counsel Lafe Solomon last week issued a memorandum to all regional directors advising them on how to process union election petitions under the new rules.  While it is too early to tell how dramatically the General Counsel’s guidance will alter the labor relations landscape, it is clear from his memorandum that the Board intends to accelerate the current union election timeline as much as possible.

As we reported in previous posts, the Board’s final rule, adopted on December 22, 2011, modifies in several substantial respects the procedures that govern the processing of union election cases.  These include:

  •  Limiting pre-election hearings to whether a question concerning representation exists;
  • Eliminating a party’s right to file a post-hearing brief and giving a hearing officer discretion whether to allow briefing on any pre-election litigation;
  • Requiring that parties consolidate their appeals of pre and post-election issues, which likely substantially limits pre-election appeals of hearing officer determinations;
  • Limiting interlocutory appeals to issues involving “extraordinary circumstances;”
  • Eliminating the rule that currently prevents regional directors from scheduling an election date any sooner than 25 days after ordering an election;
  • Making Board review of post-election disputes discretionary and allowing the Board to reject any appeal that does not present “a serious issue for review.”

Solomon’s memorandum reveals some -- but far from all -- of what the Board may be planning.  For example, the memo suggests that the regions should schedule any necessary pre-election hearing no more than 7 days after a petition is filed.  This is the hearing that the region in all likelihood will cancel if the employer does not present a viable question concerning representation.  It also states a Board agent can dispense with a pre-election hearing if, in his or her judgment, the petitioned-for unit is “presumptively” appropriate under current Board precedent.  Where a hearing must be held, Solomon directs Board agents to allow only evidence on issues that will be decided by the regional director.  Parties will not be allowed to offer evidence on “nonlitigable issues.”  In this regard, evidence on individual eligibility and inclusions issues will not be allowed unless offered to determine whether a question of representation exists.

Solomon’s memorandum suggests that the Board will take whatever steps it deems necessary to eliminate pre-election litigation and employer appeals and speed election petitions forward for a vote.  That said, it remains unclear how these changes will work in practice.  It is still possible that the D.C. Circuit’s planned ruling on May 15th will invalidate some of the Board’s rule changes.  We will monitor closely the Court’s activity as well as the Board’s implementation of the new rules and will be following up in the days and weeks to come with additional commentary on the potential implications of the new rules.

NLRB Releases Second Round Of Guidance For Social Media Cases

Last week, the NLRB’s Acting General Counsel, Lafe Solomon, released a second report containing guidance relating to employees’ use of social media.  This report comes less than six months after the release of the NLRB’s first report on the subject in August 2011.  Like the August report, the new release summarizes a number of recent cases decided by the NLRB in which an employee was terminated, at least in part, because of his or her comments on social media websites.

In his preamble to the report, Solomon notes that employers’ social media policies and employees’ online postings, as well as the NLRB’s approach to these emerging issues, are a “hot topic” not just in legal and human resources circles, but also in the media and among the general public.  Thus, according to Solomon, the purpose of the latest report is to “provide guidance as this area of the law develops.”

A few key themes emerge from the cases presented in the report:

  • Seven of the fourteen cases summarized in the report deal with whether the employers’ social media policies were so “overbroad” that they interfered with employees’ Section 7 right to engage in protected concerted activity. 
  • In scrutinizing whether a social media policy was overbroad, the Board considered whether the policy could be reasonably construed by an employee to limit activities protected under Section 7, such as discussions about wages and other terms and conditions of employment.  As a result, the Board struck down policies that used terms such as “appropriate” or “professional” to describe what kind of social media posts the employer allowed without doing more to define those terms or to clarify that concerted activity protected under Section 7 was not restricted.
  • The Board also considered whether the employers’ social media policies contained “limiting language excluding Section 7 activity from its” restrictions and whether the examples of prohibited conduct used in those policies could be “reasonably read” to include protected conduct. 
  • The Board also looked at industry and employer-specific context in evaluating social media policies.  For example, a drugstore operator’s social media policy, which restricted employees from discussing matters related to the company on social media sites, was considered lawful by the Board.  According to the NLRB, when interpreted in context, the drugstore operator’s employees would understand the policy to only restrict those communications that might implicate SEC or FTC regulations and not those communications protected under Section 7.
  • Terminations that occurred under social media policies the NLRB considers unlawfully overbroad are not unlawful by default.  For a termination to be unlawful, the comments made by the employee giving rise to his or her termination must qualify as protected concerted activity under Section 7.  Thus, an employer must carefully consider whether the employee’s posting is merely unprotected “venting” about a matter of individual concern or whether the comments were intended to (or actually did) initiate a collective discussion or group action.

Employers Take Note: NLRB Provides Guidance For Social Media Cases

The focus on social media by the National Labor Relations Board (“NLRB” or the “Board”) continues as evidenced by its recent report issued by Acting General Counsel Lafe Solomon.  The report discusses fourteen social media cases that were decided by the Board after Regional Directors submitted requests for advice to the Board’s Division of Advice.  The cases highlighted by Solomon give some insight to how the NLRB will handle various social media issues in the future.

The guidance provided by the NLRB indicates that employers should be conscious of protected concerted activity when responding to employees’ social media posts and should additionally ensure that social media policies are drafted narrowly so as not to infringe on employees’ rights protected by the National Labor Relations Act (“NLRA” or the “Act”).  Solomon explains that he offers the case summaries in the NLRB report in an effort to assist practitioners and human resources professionals and to “encourage compliance with the Act and cooperation with Agency personnel.”  Several of the cases in the NLRB’s report are discussed below.

Facebook postings determined to be protected concerted activity

  • In preparation for a meeting at work to discuss job performance, an employee posted on Facebook that her coworkers did not help the employer’s clients enough and asked her coworkers how they felt.  Several coworkers responded to the Facebook post.  The NLRB explained that such actions were protected concerted activity because the employee was acting with or on the authority of other employees; the posts commented on staffing and job performance and therefore implicated the terms and conditions of employment; and the posting was initiated in preparation for a meeting with the employer.
  • A sales person posted pictures on Facebook from a work event and included comments criticizing the employer for its hosting of the event and providing inexpensive food and beverages.  The sales person’s activities were protected concerted activity because he had been complaining with coworkers about the food for the event and the sales person had told his coworkers that he would be placing the pictures on Facebook.  As a result, the sales person was vocalizing the sentiment of his coworkers.  Additionally, the post was related to the terms and conditions of employment since the choice of refreshments could impact the employee’s commission.

Facebook posts and tweets that were not protected concerted activity

  • The Board advised that an employer’s termination of an employee who tweeted inappropriate tweets from a work-related Twitter account was not unlawful.  The employee’s tweets included a tweet critical of the paper’s copy editors, tweets about homicides in the city where the paper was published and several tweets with sexual content.  The employer did not have a social media policy but instructed the employee not to tweet about anything work related.  Because the employee was terminated for writing inappropriate and offensive comments, which did not involve protected concerted activity, his termination did not violate the Act.
  • An employee did not engage in protected concerted activity when he posted on Facebook complaining about his employer’s tipping policy.  The employee, a bartender, never raised the issue with management and no other employees commented or responded on his Facebook posts nor was the issue ever raised with his coworkers.  The NLRB determined that the employee was acting solely on behalf of himself and there was no concerted activity.
  • The NLRB found that an employee who had posted on Facebook about an individual gripe was not engaged in protected concerted activity.  The employee had posted on Facebook after an interaction with a new assistant manager and commented about the “tyranny” at the store, noting that a lot of the employees are about to quit.  Although other coworkers posted supportive comments, the Board advised that there was no concerted activity because the posting did not include any language indicating that the employee sought to initiate or induce coworkers to engage in action.

Violations of Section 8(a)(1) for threatening to sue

  • Employer violated Section 8(a)(1) when the employer’s attorney sent a letter to employee who had posted comments on Facebook expressing her dissatisfaction with the employer for not withholding state taxes and stating that the employer did not know how to do paperwork.  The letter stated that legal action would be taken unless the employee retracted her “defamatory” statements.  The NLRB advised that the letter was unlawful even if there was a reasonable basis for the potential legal action because the letter would reasonably tend to interfere with the employee’s Section 7 rights.

Union’s video on Facebook could coerce or restrain individuals’ right to work for a non-union employer

  • The Union violated Section 8(b)(1)(A) by posting an interrogation videotape on YouTube and Facebook.  A union business agent and several organizers went to a nonunion jobsite with a video camera and told the employees that they were inspecting the job and had received reports of illegal workers.  The individuals did not identify themselves or reveal their union affiliation but proceeded to question the employees about their immigration status, forcing the employees to respond when they resisted.  After videotaping the interrogations, the union then edited the video and posted it on YouTube and Facebook.  The Board explained that the union’s conduct violated the Act because it had a reasonable tendency to restrain or coerce employees in the exercise of their Section 7 rights, which includes the right to work for a nonunion employer.

Overbroad social media policies

  • An employer had a policy that 1) prohibited employees from using any social media that may violate, compromise or disregard the rights and reasonable expectations of privacy or confidentiality of any person or entity; 2) prohibited any communication or post that constitutes embarrassment, harassment or defamation of the employer, its employees, officer board member, representative or staff member; and 3) prohibited statements that lack truthfulness or that might damage the reputation or goodwill of the employer, its staff, or employees.  Because the policy prohibiting the use of social media in regards to confidentiality did not have any limits, did not explain what was confidential and was used to terminate an employee for posting on Facebook about working conditions which would be protected by the Act, the Board advised that the policy was overbroad.  Additionally, the Board found the other policies overbroad as well because they would apply to protected criticism of the employer’s labor policies or treatment of employees and the policies did not define its broad terms to limit them to exclude Section 7 activity.

Lawful social media policy

  • The NLRB determined that an employer’s social media policy that precluded employees from pressuring their coworkers to connect or communicate with them via social media could not reasonably be read to restrict Section 7 activity and was sufficiently specific in its prohibition against pressuring coworkers and applied only to harassing conduct.  The Board also considered several of the employer’s other social media guidelines and found them to be overbroad because they could be interpreted to restrict Section 7 rights.

Update: NLRB Remains Focused on Social Media Issues

The National Labor Relations Board (“NLRB”) regional offices addressing complaints involving employers’ social media policies must seek advice from the NLRB’s Division of Advice before taking any action. The memorandum, issued by the NLRB’s Office of the General Counsel on April 12th, added social media disputes to the list of matters that must be submitted to the Division of Advice.  The Division of Advice is responsible for issuing opinions on difficult or novel labor issues. 

Citing lack of governing precedent and the important policy issues involved, the NLRB’s Acting General Counsel Lafe E. Solomon instructed regional offices to submit for review “cases involving employer rules prohibiting, or discipline of employees for engaging in, protected concerted activity using social media, such as Facebook or Twitter.”

On a related note, earlier this month, the NLRB's Manhattan Regional Director informed Thomson-Reuters that the NLRB planned to file a complaint against the company for allegedly reprimanding an employee who had criticized company management on Twitter.  A complaint is not yet publically available. 

This is not the first time a regional NLRB office challenged an employee’s social media policy.  In October 2010, the NLRB’s Connecticut Regional Office issued a complaint against the American Medical Response of Connecticut over an employee’s termination for posting unflattering statements about her supervisor on Facebook. The NLRB settled this complaint in February 2011.  The settlement required the company to revise its policy to "ensure that they do not improperly restrict employees from discussing their wages, hours and working conditions with coworkers and others while not at work.”  The employer also agreed that it “would not discipline or discharge employees for engaging in such discussions.”

While the NLRB has not yet issued a ruling in any case that would provide precedential guidance on social media issues as noted in the General Counsel memorandum, the NLRB Division of Advice has considered an employer’s social media policy and refused to issue a complaint.  In 2009, a union asked an NLRB regional office to issue a complaint against Sears Holdings Corporation for maintaining a social media policy that prohibited, among other things, “disparagement of company's or competitor's products, services, executive leadership, employees, strategy, and business prospects” on the grounds that the policy restricts the employees’ right to “engage in concerted activities” under Section 8 of the National Labor Relations Act (“NLRA”).  The Division of Advice found that the disparagement provision, read in concert with a list of proscribed activities including “abusive and profane language” and “verbal, mental, and physical abuse” did not violate the NLRA.  Noting that the employer’s policy explicitly stated its intent not to restrict the flow of useful and appropriate information, the Division of Advice concluded that a complaint was not warranted because the policy as a whole did not reasonably tend to limit or chill protected activities.

While the NLRB’s position on social networking policies remains unclear and somewhat inconsistent, the recent General Counsel memorandum underscores the NLRB’s growing alertness to the topic of social media and its role in the workplace.

President Obama Nominates Lafe E. Solomon And Terence F. Flynn To National Labor Relations Board

On January 5, 2011, the White House announced President Obama’s intent to nominate Lafe E. Solomon to be General Counsel for the National Labor Relations Board and Terence F. Flynn to be a Board Member.

The General Counsel is appointed for a four year term by the President with the consent of the Senate and is independent from the Board.  According to the NLRB’s News Release, Mr. Solomon, a native of Helena, Arkansas, who received a B.A. in economics from Brown University in 1970 and a law degree from Tulane University in 1976, has served as a career attorney at the NLRB.  He began his NLRB career in 1972 as a field examiner, and after earning his J.D., he joined the NLRB Office of Appeals.  He transferred to the Appellate Court Branch in 1979 and later worked for various board members.  President Obama named him Acting General Counsel of the NLRB as of June 21, 2010 under the Federal Vacancies Reform Act of 1998, after the previous General Counsel, Ronald Meisburg, resigned.  The News Release describes the General Counsel as the NLRB’s top investigative and prosecutorial officer, who has supervisory authority over all Regional Offices, guides policy on issuing complaints, seeking injunctions, and enforcing the Board’s decisions.  Among the steps he has taken as acting General Counsel, Mr. Solomon has issued an NLRB memorandum calling for priority action in unfair labor practice cases alleging retaliatory discharge during union organizing efforts.  He also recently authored a memorandum identifying “the protection of employee free choice regarding unionization” as the “keystone” of the NLRB’s mission, stating that he is “committed to making the principle of employee free choice meaningful.”  His language suggests that under his direction, the NLRB would continue to pursue the aims of the Employee Free Choice Act.

President Obama’s other NLRB nominee, Terence F. Flynn, received a B.A. from the University of Maryland, College Park and a J.D. from Washington & Lee University School of Law.  The NLRB’s News Release says that Mr. Flynn worked at various law firms from 1990 until 2003, working on a range of labor and employment and immigration matters.  He is currently Chief Counsel to NLRB Board Member Brian Hayes (the only Republican currently on the Board) and was previously Chief Counsel to former NLRB Board Member Peter Schaumber, also a Republican.