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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.

The Board’s decision likely will be reviewed by an appellate court since the NLRA allows D.R. Horton to appeal Board decisions in the District of Columbia Circuit, or in any circuit where the unfair labor practice arose or where the company does business.  The decision is almost surely to be challenged on grounds that it is at odds with the United States Supreme Court’s decision in AT&T Mobility v. Concepcion, 131 S.Ct. 1740 (2011), where the Court held that a California law prohibiting class action waivers in consumer arbitration agreements was preempted by the Federal Arbitration Act, meaning that class action waivers in consumer arbitration agreements may be enforceable.  The Board’s decision also is likely to be challenged based on the fact that it was issued by only two Board members, potentially in violation of the Supreme Court’s decision in New Process Steel v. NLRB.

In D. R. Horton, Inc., 357 NLRB No. 184 (January 3, 2012), a plurality of the Board held that D.R. Horton’s class/collective action waivers in its arbitration agreements - which employees were required to sign as a condition of employment - constituted an unfair labor practice under the National Labor Relations Act. 

This case started innocuously enough, as the charging party alleged that he was misclassified as an exempt employee under the FLSA, and initiated arbitration on behalf of himself and similarly situated employees.  After D.R. Horton asserted that arbitration of collective claims was prohibited under his arbitration agreement, the charging party brought a ULP charge against the company.  With only two members participating in the decision (as the third and only other Board member recused himself), the Board held that D.R. Horton engaged in an unfair labor practice by including waivers of class or collective claims in arbitration agreements that its employees were required to sign. 

The basis for the Board’s plurality opinion is Section 7 of the NLRA, which provides employees with the right “to engage in . . . concerted activities for the purpose of collective bargaining or other mutual aid or protection . . . .”  29 U.S.C. § 157.  “The Board has long held, with uniform judicial approval, that the NLRA protects employees’ ability to join together to pursue workplace grievances, including through litigation,” and “that concerted legal action addressing wages, hours or working conditions is protected by Section 7.”  Thus, D.R. Horton’s mandatory arbitration agreement, which precludes employees from pursuing class or collective claims in any forum (judicial or arbitral) “clearly and expressly bars employees from exercising substantive rights that have long been held protected by Section 7 of the NLRA,” and constitutes an unfair labor practice.

The Board’s decision expressly dealt with the Supreme Court’s ruling in Concepcion, distinguishing that case because it did not involve “the waiver of rights protected by the NLRA or even employment agreements.”  Likewise, the Board noted that Concepcion dealt with a conflict between California state law and federal law (the FAA), which implicated the Supremacy Clause, while the D.R. Horton case addressed alleged conflicts between two federal laws - the NLRA and FAA.  To the extent a conflict does exist between the two federal laws, the Board stated that the FAA would yield to the NLRA and its protections on the right to engage in concerted activity.

While the NLRB usually decides cases involving unionized workforces, this decision based on Section 7 of the NLRA would apply to union and nonunion employees, so long as the employer meets the jurisdictional requirements of the NLRA.

Even the Board’s ruling has some limitations, of which employers should be aware:

• The class waiver prohibition is limited to statutorily defined “employees” under the NLRA, meaning it does not apply to managerial employees or supervisors. 
• Employers may still insist that any arbitration proceedings be on an individual basis “[s]o long as the employer leaves open a judicial forum for class and collective claims.” 
• The Board does acknowledge that a union is still free to collectively bargain away its members’ ability to pursue class or collective claims, just as it may agree to arbitration provisions that waive other actions.  The key is that the union negotiates this, not an employer unilaterally imposing such waivers.

The new regulations, which are set to be published in the Federal Register today, alter pre-election litigation procedures that will invariably pave the way for quicker elections in representation cases and likely result in more union victories in elections.  For a detailed summary of these regulations, see our previous post following the Board’s vote on the proposed revisions.  The Board has also provided a short summary of the new regulations.

In response to this week’s developments, two business organizations, the U.S. Chamber of Commerce and the Coalition for a Democratic Workplace, filed a lawsuit against the Board seeking to stop the implementation of these new regulations.  The suit, filed in the District Court for the District of Columbia, seeks an injunction preventing the Board from enforcing the new regulations and a declaratory judgment holding that the rules are contrary to the National Labor Relations Act and the First and Fifth Amendments to the U.S. Constitution.  The suit also alleges that the manner in which the Board rushed through the rule violated the Administrative Procedures Act and the Regulatory Flexibility Act.

Absent court intervention, the new regulations are due to take effect on April 30, 2012.  Regardless of whether the lawsuit ultimately succeeds in preventing the implementation of the new rules, the Board’s actions continue to signal a significant step towards eliminating the procedural safeguards that permit employers to challenge the appropriateness of proposed bargaining units before an election takes place.  The Board’s actions are also a major step in the direction of shrinking the window of time between a union petition and the actual election.  As we previously have recommended, employers are well served to consult with their labor counsel and advisors, so that they may now begin to make preparations for a labor relations arena in which they may have little to virtually no advance notice of a pending union election and little to no ability to challenge the union’s proposed bargaining unit until after the voting has taken place.

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.

As we reported on December 23, 2010, the NLRB had issued a proposed rule regarding the notice on December 22, 2010. The NLRB received more than 7,000 comments in the six-month comment period that followed. The NLRB appears to have made minor adjustments based on comments received, but the Final Rule is substantially as proposed.

The Final Rule requires private-sector employers who are covered by the NLRA (which is most companies) to post the designated 11x17 employee rights notice wherever other workplace notices are typically posted. If employers regularly post rules or policies on an intranet or internet site, the Board’s notice must also be posted there. Translated versions must be posted where at least 20% of the workforce is not proficient in English. 

The notice tells employees of their unionizing rights, gives examples of unlawful employer and union conduct, and tells employees how to contact the NLRB with questions and complaints. The NLRB describes the notice as “similar” to the notice required for federal contractors by the U.S. Department of Labor (“DOL”). The NLRB will deem a contractor in compliance with this requirement if it posts the DOL’s notice.

Failure to post the notice may be treated as an unfair labor practice (“ULP”).

What This Means For Employers

Unless a company already posts the DOL’s comparable notice, employers should obtain a copy of the notice from the NLRB (via its website or a Regional Office), once it is published around August 30, 2011. The notice should be posted, both physically and electronically, in all places that other employee notices are posted. Companies should ensure they are in compliance with this requirement by no later than November 14, 2011.

Proposed Changes

Timing of Elections.  As indicated, one of the most notable proposed changes is the timing of the election itself.  The Board’s proposed amendments would reduce the time between the filing of a petition and the election, with elections being held as early as 10 days after a petition is filed.  In 2010 the median timing of an election was 38 days after the filing of a petition.

Litigation Limitations.  One reason quickie elections would be possible is because of the numerous proposals made regarding litigation related to elections.  First, the amendments would require that any pre-election hearing disputing the right of the union to hold the election, be held within seven days of when the hearing notice is served.  Currently, Regional Directors have flexibility in scheduling the pre-election hearing and can consider special circumstances.  Second, at the hearing employers would be required to file a Statement of Position explaining all of their legal objections to the elections.  Notably, failure to object to an issue would be fatal because the objection would be deemed waived.  Third, prior to an election the hearing officer will only rule on disputes that would affect more than twenty percent of the bargaining unit.  Fourth, if the hearing officer does rule prior to the election, parties cannot request review of the ruling by the NLRB until after the election. 

Access to Employee Information.  The changes would require employers to provide unions access to employee information within two days of approval of an election agreement or issuance of a direction of election.  Currently employers have seven days to provide this information.  The proposals would also require employers to provide employees’ available phone numbers and email addresses, information employers do not currently provide.  Finally, the amendments further propose that employers must provide this information electronically.

Potential Impact

In its fact sheet that compares its proposals to the current procedures in place, the NLRB claims that it periodically reviews and revises its procedures to improve its service to the public and that the proposed amendments would help it carry out its duties under the National Labor Relations Act (“NLRA”).  Furthermore, the NLRB claims that the motivation for the proposed rules is to streamline the election process, reduce unnecessary litigation and facilitate the use of electronic communications and document fillings.  Unfortunately, while the proposed amendments may do exactly that, they do so to the detriment of employers. 

The Board’s proposed changes will clearly provide significant benefits to unions and as noted by former NLRB Chairman Peter Schaumber, hurt employers and lead to uninformed voters.  Because of the quickie elections, employers will have less time to respond to organizing campaigns.  Employers will have a short amount of time to educate employees about their views on unionization and additionally limited time to review and determine their legal positions on the elections.  Calling it “a seismic shift in Board law and procedures,” Schaumber explains that the proposals will “eviscerate employers’ chance to respond” and “employees will only hear one side of the story.” 

What You Can Do

The Board is accepting comments on its proposed rules through August 22, 2011.  Your comments can be submitted through regulations.gov.  In addition to commenting on these proposals, one strategy is for employers to be proactive regarding unions.  If the amendments are accepted, employers will clearly be facing an uphill battle when elections occur.  As a result, employers should educate employees about unionization as soon as they are aware of the potential of any election.

The poster entitled, “EMPLOYEE RIGHTS”, lists seven bullet points which, repetitively, state that employees have the right to organize, form or join a labor union and, again repetitively, state that they have the right to negotiate their wages, benefits and working conditions with their employer.  A separate bullet point also explains that employees have the right to act with each other to improve working conditions, raise work related complaints “directly” with the employer or with a government agency and, again, to form a union.  Another bullet states that employees have the right “to strike and picket.”  The last bullet advises that employees can, “Choose not to do any of these activities…”

Also included on the poster is a descriptive summary of seven types of illegal activity by employers and five types by unions.  The poster concludes with the warning that, “Illegal conduct will not be permitted,” along with a description of the NLRB’s authority and possible remedies which the Board can order.  Finally, it provides employees with contact information for the NLRB.

We encourage our readers to carefully review the broad and repetitive poster and consider making comments.  We are in a position to assist our clients and others who may wish to submit comments.
 

The NLRB’s Complaint

On October 27, 2010, the NLRB’s Connecticut Regional Office (Region 34) issued a complaint alleging that American Medical Response of Connecticut illegally terminated an employee for, among other things, violating the Company’s social media policy.  At issue is whether an employee’s unflattering and critical social media  posts about her supervisor, which triggered co-workers to post supportive messages, constitute a protected concerted action under the National Labor Relations Act (the “Act”).   The NLRB also alleges that the Company’s social media policy, which prohibits such conduct, violates the Act because it tends to chill employees from exercising their protected right to protest working conditions.  This despite a prior guidance that permitted such a policy.  A hearing on the complaint has been set for January 25, 2011.
 
Factual Background

In November 2009, the Company received a customer complaint regarding bargaining unit member Dawnmarie Souza’s (“Souza”) rude and discourteous service.  Souza, who was requested by her supervisor to prepare a response to the customer’s complaint, asked her supervisor to allow a union representative to assist in preparing the response.  A few hours after her supervisor denied this request, Souza posted comments on her personal social networking page mocking her supervisor.  In addition to using vulgar language to characterize her supervisor, Souza also referred to her supervisor as a “17”— company-speak for a psychiatric patient.  Souza’s postings drew supportive comments from her co-workers, which, in turn, led Souza to post further negative comments about her supervisor.  Souza was eventually terminated.

At all material times during Souza’s employment, the Company maintained a Blogging and Internet Posting Policy which prohibited employees from, among other things, making “disparaging, discriminatory or defamatory comments when discussing the Company or the employee’s superiors, co-workers….”

The Bottom Line

The NLRB’s complaint against American Medical Response, in tandem with Mr. Solomon’s publicly-expressed sentiment, represent a troubling departure by the Board on prior advice it issued regarding social networking policies. It is unclear whether the Board will ultimately agree with Mr. Solomon that an employee’s comments made on a social networking site are analogous to those made around a company water cooler, particularly since such view would require overlooking the reality that the recipients of such communications will necessarily include both employees and non-employees alike.  What is clear, however, is that the Board is actively challenging social networking and other workplace policies.  For this reason, all employers are encouraged to carefully review their social networking and other policies that may get the attention of the NLRB.

Jerry Mulhall was an employee of Hollywood Greyhound Track, Inc., operating as Mardi Gras Gaming (“Mardi Gras” or the “Company”), in Hallandale Beach, Florida.  Mardi Gras’ workforce was non-union—and that is how Mulhall wanted it to stay.  A vehement opponent of unionization, Mulhall filed suit to block enforcement of a Memorandum of Agreement (“MOA”) entered into by his employer and UNITE HERE which, according to Mulhall, would illegally thrust unionized status upon the employees. 

Under the MOA, which Mulhall characterized as “illegal and collusive,” UNITE agreed to financially support a casino gaming ballot initiative desired by Mardi Gras, and, if recognized as the exclusive bargaining agent for Mardi Gras’ employees, to refrain from picketing, boycotting, striking or undertaking “other economic activity” against the Company.  In exchange, Mardi Gras agreed to help UNITE organize the Company’s employees.  Specifically, Mardi Gras promised to:  (1) provide UNITE with complete employee rosters and home addresses; (2) allow UNITE to use Company property—including non-public areas—for organizing activities; (3) refrain from any anti-union speech or conduct; (4) waive its right to an NLRB-monitored secret ballot election and, instead, allow an informal “card check;” and (5) promise not to file unfair labor practice charges against UNITE for violating employees’ rights during the organizational campaign.

UNITE abided by the MOA and provided more than $100,000 toward the gaming-related ballot initiative favored by Mardi Gras.  When UNITE later demanded the promised assistance from the Company in organizing the workforce, Mardi Gras refused, claiming that the MOA was illegal, based on the advice of its new legal counsel. 

UNITE and Mardi Gras arbitrated the enforceability of the MOA, and an arbitrator ruled for UNITE.  At the same time, Mulhall filed an injunction action in federal court, claiming that the MOA was unlawful under Section 302 of the LMRA, which makes it illegal for an employer to deliver, or for a union to receive, any “thing of value.”  Essentially, the statute prohibits employer payments to any representative of its employees, with certain limited exceptions.  As the Court observed, one of the goals of Section 302 is to protect employees from the collusive effects of unions and employers attempting to “buy” labor peace. 

In holding that Mulhall had legal standing to bring such an action, the Eleventh Circuit found that Mulhall satisfied all three elements:  (1) he has suffered or imminently will suffer an injury-in-fact; (2) that his injury stems from the defendant’s conduct; and (3) that a favorable judgment is likely to redress the injury.  With regard to the “injury” prong, the Court held that Mulhall showed that he had a “legally cognizable interest” that was imminently at risk of being invaded:  his freedom of association under the First Amendment.  In other words, Mulhall had the right not to associate with a union, and the MOA substantially jeopardized that right.  Therefore, he faced imminent injury:  being forced to unionize against his will. 

The Court also found that the second and third prongs required to establish standing were satisfied because the potential injury was “fairly traceable” to Mardi Gras’ and UNITE’s conduct, and a favorable judgment—enjoining enforceability of the MOA—would eliminate the risk of forced unionization.  In finding that Mulhall had standing and could proceed with his legal action, the Court was clear to point out that it was not ruling on the merits.  Instead, in the Court’s words, “we say only that it is enough to allow him to get his ticket stamped for admission to the federal court.”      

Mulhall raises a host of interesting questions about the degree to which employers and unions can agree on the conditions that will govern an organizing campaign.  The lesson is that, while granting concessions like neutrality and card check probably do not violate § 302 (if for no other reason than the NLRA allows an employer to voluntarily agree to recognize a union on cards), agreeing to do things such as accept the union’s financial support in unrelated business endeavors in exchange for card check and neutrality raises significant § 302 concerns.  Therefore, employers should carefully consider such proposals and seek legal advice before going forward.

Protected Concerted Activity 

Section 7 of the NLRA protects “the right . . . to form, join, or assist labor organizations . . . and to engage in other concerted activities for the purposes of collective bargaining or other mutual aid or protection.”  29 U.S.C. §  157.  “Concerted activity” is action taken in pursuit of a common goal by multiple employees or by a single employee where the employee is authorized by other employees to act on their behalf.  The concerted activity is protected if it is intended for mutual aid or protection (a lawful objective) and executed by a lawful method.  Many people think of strikes, group complaints, or honoring picket lines as typical activities protected by the NLRA.  However, an activity may fall under the protection of the NLRA even where it appears to have little or nothing to do with unions.  Employees have the right to engage in concerted activities even where no union activity is involved and in situations where the employees have not considered a collective bargaining agreement. 

Under Section 8 of the NLRA, employers may not interfere with, restrain, or coerce employees in their rights to engage in concerted activities.  29 U.S.C. §  158(a)(1).  Employers who take an adverse action toward, or retaliate against, employees because of protected concerted activities may violate the NLRA and possibly find themselves having to defend against an unfair labor practice charge.  As noted, this is the case for both unionized and non-unionized employers. 

Facebook, Blogs, Chat Rooms and More

When addressing employee use of social media, employers should be aware that unions and possibly the NLRB may construe employees’ use of social media as protected concerted activities.  Unions may argue that employees are exercising their Section 7 rights when they use Facebook, blogs, chat rooms, twitter and even email.  Because of its nature, social media provides the perfect opportunity for employees to interact with one another, and unions and the NLRB may try to classify such interactions as employees engaging in protected concerted activity.   

Social media, and employees’ use of it, presents considerable challenges to employers.  Misuses of social media can result in damage to the employer’s reputation, breach of confidentiality, and trade secret theft.  To minimize those risks, employers may implement a social media policy to provide some limitations on how social media may be used relating to the company.  Such policies may address employees’ use of social media both at the workplace, with company property, and outside of the workplace.  When constructing such a policy, employees’ Section 7 rights should be considered.   Employers must avoid any policy that may reasonably tend to “chill” employees in the exercise of their Section 7 rights, such as overly broad restraints that forbid employees from discussing work conditions with one another or from discussing the company on the Internet or other social forums. 

Other Possible NLRA Claims

With regard to social media, unions may also argue that employers violate the NLRA by monitoring employees’ use of social media because they are engaging in surveillance of union activities.  Employers generally may not use surveillance where employees are engaged in protected union activities, such as exercising their Section 7 rights.  Because surveillance tends to discourage employees from exercising their Section 7 rights, it is viewed as a violation of the NLRA.  Where unions assert surveillance concerns with social media, the matter will often turn on whether the social media is public or private (where there are passwords in place to limit access to the blog, chat room, Facebook page, etc.).  Employers also should treat both union and non-union use of social media in the same manner to avoid allegations of discrimination against union members and union interests. 

Because of the significant increase in its use, social media creates new challenges for employers in protecting their legitimate business interests.  Employers should be aware of the possibility that unions and the NLRB could seek to invoke the NLRA to protect employees’ use of social media in several respects. 

In UBC, the full five-member Board -- which split along party lines -- held that a labor union’s use of stationary banners outside of the business establishment of a “secondary,” or neutral, employer does not violate the secondary boycott provisions of Section 8 of the National Labor Relations Act.  That Section makes it an unfair labor practice for a union to “threaten, coerce or restrain” a neutral employer if the union’s object is to force the neutral employer to cease doing business with another “primary” employer with whom the union has a labor dispute.  In UBC, the General Counsel pressed ULP charges against the Carpenters’ Union for setting up banners outside the premises of several neutral employers to protest their doing business with a group of construction firms with whom the Carpenters had a primary labor dispute.  At least some of the banners suggested that the Union had a dispute directly with the targeted neutral employers, indicating that the object of the Union’s conduct was indeed to force the neutrals to cease doing business with the primary employers in the case.  The parties however stipulated that the Union did not otherwise engage in picketing, patrolling or disruptive conduct, and as a result, the facts presented the Board with a perfect “test case” regarding the legality of union bannering activity directed at a secondary employer.
 
Departing from past Board cases broadly defining “picketing” under Section 8 of the Act, the UBC majority held that the Union’s conduct “lacked the confrontational aspect necessary to a finding of picketing proscribed as coercion or restraint within the meaning of Section 8[].”  The majority then announced a new standard for determining the lawfulness of non-picketing conduct directed at secondary employers:  secondary activity that falls short of picketing will violate Section 8 only if it “directly cause[s], or could reasonably be expected to directly cause, disruption of the secondary’s operations.”  In reaching this new and extremely narrow standard, the UBC majority noted that its holding was necessary in order to comply with the “Constitutional Avoidance” doctrine, which requires that statutes be construed in a manner that avoids conflict with the U.S. Constitution.  The UBC majority ruled that holding a banner is akin to “speech,” or at least is expressive conduct, and that to outlaw such activity would bring Section 8 of the Act directly into conflict with the First Amendment. 
 
Members Schaumber and Hayes issued a vigorous dissent “compelled by a serious concern that [the majority’s] standard will assuredly foster precisely the evil of secondary boycott activity and expanded industrial conflict that Congress intended to restrict by enacting [Section 8].”

It is difficult to predict the ultimate impact of the UBC decision.  In one sense, it is not an overly controversial decision because the facts of the case indicated that the Union’s conduct was limited to the peaceful display of stationary banners, without patrolling, picketing, name calling or other disruptive conduct.  However, the Democratic majority seized on the opportunity to announce their creation of a test that may have a much wider application.  Now, unions are likely to argue that they are free to engage in any type of conduct -- perhaps even picketing -- as long as they carry it out in a manner that does not “directly cause” disruptions to the secondary employer’s business.  In this regard, the dissent’s concerns are well taken.  We will be watching closely to see how this significant case plays out in the labor arena going forward.

Currently, the NLRB has four sitting members.  This number will reduce to three when Republican Member Schaumber's term runs out in August, 2010.   All three remaining Board members are Democratic appointees. Typically, a fully constituted Board decides 300 to 400 cases per year and there was already a backlog of several hundred cases to be decided prior to the re-arrival of the 600 cases affected by the Supreme Court's decision.  Thus, the log jam of cases at the Board may continue as the Members wrestle with re-deciding the remanded cases.  It is unlikely that the current Board will overturn those decisions which favored unions or employees and there may be occasion for the new Board to change the law or Board's policy in the reconsideration of some of the cases.

We previously predicted that the new Board will overturn a significant number of decisions rendered in favor of employers during the preceding administration.  The agenda to consider those cases will be directed by the NLRB's General Counsel who has the authority to prioritize the cases coming before the Board.  With the departure of General Counsel Ron Meisburg, the President now has the opportunity to appoint his replacement.  However, even with the appointment of a new general counsel, the remand of these 600 cases may affect the Board's timetable in working through the predicted pro-labor agenda.

DOL’s Office of Labor-Management Standards (“OLMS”) held a public meeting on May 24th in Washington, D.C. regarding DOL’s new proposal.  The purpose of the meeting was to receive comments on the planned rulemaking, and the meeting was considered a “listening session” for DOL.  Following a brief introduction to the issues, the floor was opened to those wishing to provide related comments, which became part of the record for the planned rulemaking.

A number of labor-affiliated attendees at the meeting, including the AFL-CIO and the Mine Workers of America, and spoke in favor of the new regulatory initiative.  On the other side of the aisle, attendees from the business community, such as the U.S. Chamber of Commerce and the National Association of Manufacturers, opined that narrowing section 203(c)’s advice exception would adversely impact attorney-client communications and would hinder the free speech rights of employers.

Speaking on behalf of the U.S. Chamber of Commerce, Michael Eastman, Executive Director of Labor Law Policy, expressed concern that narrowing the advice exception will make it more difficult for employers to obtain legal advice regarding labor relations and the National Labor Relations Act (“NLRA”).  Eastman also stated that the LMRDA is designed to provide disclosure when employers engage third parties to interact with and persuade employees, “because employees may not otherwise know such individuals are agents of the employer,” but that “this is not true in the case of the employer’s supervisors, managers, and officers.” 

The rulemaking process takes some time, and we will let you know as soon as DOL publishes a formal Notice of Proposed Rulemaking, at which time comments on the proposed rule can and should be submitted.

Background

Executive Order 13496 was signed by President Obama on January 30, 2009.  It revokes Executive Order 13201, which required posting of the “Beck Poster” (the Beck Poster advised employees they could not be compelled to join a union or maintain a union membership to keep their jobs, and could restrict the use of their union dues for certain purposes).  The goal of the Order is to ensure federal contracts will not be interrupted by labor unrest.  It is premised on the idea that industrial peace is best achieved by informing workers of their rights under Federal labor law.

After almost a year and a half of rulemaking, the form of the new notice has been finalized.  Hard copies can be obtained from the DOL’s Office of Labor-Management Standards (OLMS) at (202) 693-0123 or by email request at olms-public@dol.gov. 

What The Notice Does 

The new notice informs employees of their rights to organize, join a union, bargain collectively, and engage in other protected concerted activity under the NLRA.  It also gives examples of illegal conduct by employers and unions, and gives contact information for National Labor Relations Board.

Is Your Company Affected?

Companies should carefully scrutinize any federal contracts or subcontracts that are signed or modified after June 21, 2010.  The new posting obligation is triggered by the government agency or department’s inclusion of a notice clause in the government contract.  The  clause may not be included in full, however, so also look for inclusion by reference to “29 CFR Part 471, Appendix A to Subpart A.” 

Exceptions to the posting requirement include federal contracts under $100,000, subcontracts below $10,000, and contracts/subcontracts for work to be performed exclusively outside the territorial U.S.  Also, employers who exclusively employ workers excluded from coverage under the NLRA are not covered.

What Should You Do To Comply?

If the notice clause is present in your contract, the company must conspicuously post the prescribed notice wherever employees covered by the NLRA are engaged in activities related to performance of the contract.  The notice must be posted in all places where notices to employees are customarily posted, both electronically and physically.  Physical postings must be on 11x17 size paper.  For electronic postings, the employer must provide an electronic link to the actual notice.  If a large portion of the company’s workforce is not proficient in English, a translated notice must be provided.  Translations can be obtained from the OLMS.  
 
In addition, the contractor must include provisions requiring posting of the same notice in all subcontracts entered into in connection with the contract.

Penalties and Enforcement

The Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) will conduct evaluations to determine compliance with the new requirement.  It is thus particularly important for any company undergoing audit by the OFCCP to ensure the new notice is posted by June 21, 2010.  The OFCCP has issued a Powerpoint Presentation of guidance to federal contractors.  Employees also may file complaints about noncompliance.

Failure to comply with the notice and posting obligation can result in cancellation, termination or suspension of the government contract, in whole or in part.  The contractor may also be declared ineligible for further government contracts.  In addition, the Secretary of Labor may publish the names of any contractors that have failed to comply. 

The Department’s current policy is to construe the “advice exception” broadly to exclude arrangements where the consultant has no direct contact with employees.  This excludes, for instance, situations where the consultant coordinates a campaign to defeat a union organizing effort, so long as the consultant does not contact employees directly.

The Department now views this policy as overly broad.  It intends to publish notice and comment rulemaking to consider a narrower interpretation of the “advice exception” that more closely implements the Department’s new interpretation of the intent of the LMRDA.  The Department’s goal is twofold:  to provide greater labor-management transparency for the public, and more information to workers to ensure effective participation in the workforce. 
 
The Department has announced a Notice of Public Meeting where interested persons can provide comments, to be held May 24, 2010 in Washington, D.C.    Interested participants can register by calling 202-693-0123 or sending an email to olms-public@dol.gov.  At the same time, the Department will seek comments on whether electronic filing should be mandatory for the Form LM-10 and LM-20 reports.

The rulemaking process takes some time, so new regulations are not likely to be finalized for several months.  However, if the Department narrows the “advice exception” as planned, the impact on employers could be significant.  Employers will no longer be able to shield third-party arrangements from reporting simply by isolating consultants from direct employee contact.  A wider range of consulting arrangements will be open to public scrutiny.  Rather than face increased public reporting, employers may elect to perform in-house more of the activities designed to persuade employees as to their bargaining rights.  Employers will have to weigh the benefit of experienced third-party assistance against the cost of public disclosure.

The final rule was issued by the NMB after several months of discussion.  It will take effect 30 days from its publication in the Federal Register on May 11 and its impact will likely be felt immediately in the airline industry.  The Association of Flight Attendants (“AFA”) has already indicated that it will file for an election at Delta Air Lines once the rule becomes effective.  Unions had previously failed to obtain a majority vote at Delta, but Delta’s composition of union and non-union workers has shifted since 2008 when it merged with a heavily unionized NorthWest Airlines.  The Air Transport Association (“ATA”), which represents most airlines, has also responded to the new rule arguing that the NMB does not have authority to implement the rule.  The ATA is expected to file a lawsuit challenging the validity of rule. 

Although the NMB’s action is specific to the airline and railroad industries, it is notable because it continues the trend of recent pro labor actions.  The rule was proposed by the AFL-CIO after President Obama named Linda Puchala to the NMB.  Puchala was the former head of a flight attendant union and as with the recent appointments to the National Labor Relations Board, her appointment shifted the balance of the NMB in a pro labor direction.  The rule was approved by a 2-1 vote with a dissent by Elizabeth Dougherty who explained that the new rule is “an unprecedented departure for the NMB and represents the most dramatic policy shift in the history of the agency.”

Under Register Guard, employers may prohibit employees from sending non-job related solicitations using the employer’s email system, including union-related communications.  Register Guard established that employers may prohibit this type of email even if the employer permits employees to send personal messages via email, such as an announcement of someone’s birthday, as long as the employer did not discriminate between union and nonunion communications of a similar nature.   

In Oakwood, the Board broadly defined a “supervisor” under the National Labor Relations Act (“NLRA”) as a person who assigns work to other employees using independent judgment and discretion.  Supervisors are not protected under the NLRA and can be ordered to assist the employer in its anti-union activities or discharged for assisting a union.  The Board stated that an individual’s judgment is independent where it is not dictated or controlled by instructions, such as employer policies or rules. 

Should the Board revisit the holding of either case, the result will most likely be employee- and union-friendly. 

In her Register Guard dissent, Board Member Liebman (now Chairman) would have found that “banning all nonwork-related ‘solicitations’ is presumptively unlawful absent special circumstances.”  When considering Register Guard on remand from the D.C. Circuit, the Board may now follow Liebman’s lead.  It will likely hold that the employer cannot preclude employees from using the email system for union-related matters. 

• What can employers do?  Employers should try to prohibit union-related solicitations by strictly prohibiting any personal use of their email systems.  Circuit courts may uphold such a policy even if Register Guard is reversed along Liebman’s interpretive lines.

In the Oakwood dissent, Liebman wrote that an individual should not be classified as a supervisor if the only supervisory duty performed is simply designating a task or tasks. If Oakwood is revisited, the Board will likely interpret “supervisor” less broadly.  This would make it more difficult for employers to classify lead persons who assign duties on a daily basis as supervisors.  Thus, in a union organizing drive, lead persons would be part of the bargaining unit and could advocate unionization to the workers they oversee. 

• What can employers do?  To ensure that lead persons can be classified as supervisors, employers should make sure that they do more than merely assign tasks (e.g. evaluate employees for raises, hire subordinates, make effective recommendations for hire, or authorize time off or overtime).

The recent revisions could signal an increased focus on several particular topics.  For example, a number of the revisions address issues relating to undocumented witnesses, bilingual or non-English speaking witnesses, and posting of notices in languages other than English.  These provisions likely highlight an increased focus on workplaces with high concentrations of workers from other countries.  Significantly, investigators and field agents are told to inform undocumented witnesses that the NLRB is not associated with the U.S. Immigration and Customs Enforcement, but that they cannot guarantee that action will not be taken against the witness due to immigration status. 

Several of the revisions relate to the issuance of investigative subpoenas and procedures for opposing petitions to revoke subpoenas, including a new section on recovery of attorneys’ fees and costs in subpoena enforcement proceedings.  One section adds as considerations for issuing a subpoena “the possible derivative liability of additional parties” and the possible need “to obtain a protective order or other pendente lite relief.”  Another section clarifies language regarding notice to attorneys, emphasizing that the agency is not required to notify a party or its counsel if the agency subpoenas a witness who is not a supervisor or agent of the party.  This may forebode an increased emphasis on the use of subpoenas in Board investigations and proceedings.  The Regional Director has broad discretion to issue pre-complaint investigative subpoenas whenever evidence cannot be obtained by reasonable voluntary means.

Other sections with revisions include guidance on procedures when attorney misconduct is alleged in agency proceedings, guidance on introducing evidence regarding the appropriateness of particular remedies, and guidance on processing representation petitions that are blocked by ULP charges that are otherwise appropriate for deferral to grievance and arbitration.  Significantly, even if such a ULP charge is appropriate for deferral, the Manual states that Regional Offices should proceed with pre-complaint investigations and reach determinations on the merits (but not proceed to a complaint), so as to unblock the representation case.  In addition, the revised Manual also contains a new section with guidance on alternative dispute resolution of cases pending before the Board.  These changes might suggest a heightened aggressiveness on the part of the agency to pursue enforcement and obtain settlements in a more efficient manner.

Although to some extent the revisions to the Manual might simply reflect the need to update procedures in light of issues encountered over the past several years, they also constitute tangible evidence that the NLRB is taking steps to improve its enforcement procedures so they may be put to better use.

Becker’s nomination was returned by the Senate in accordance with its operating rules because at least one Senator objected to having the nomination held over for consideration during the 2010 session.  Earlier this year Senator McCain (R, Ariz.) expressed his opposition to Becker’s nomination, referring to the nomination as one of the most controversial that he had seen in a long time and placing a hold on the nomination after his request for a public hearing was denied.

Whether Becker’s nomination will survive is unclear.  Because it has been returned, the President must resubmit the nomination in order for the Senate to consider Mr. Becker.  If he is re-nominated, the process could coincide with debate over the Employee Free Choice Act (EFCA), bringing into stark focus some of the most controversial aspects of organized labor’s agenda. 

This scenario may also create room for compromise, or at least the illusion of one.  To get EFCA passed and push Becker through to confirmation, proponents might be willing to modify the provision that would eliminate the right to call for a secret ballot union election.  However, with Becker on the NLRB, pro-union rules and decisions are more likely to predominate.  Among Mr. Becker’s most controversial views are:  (a) that employers should play no role whatsoever in the union selection process; and (b) that many of the NLRB’s current rules regarding the union selection process can be changed by rulemaking without legislation.

A compromise which defeats EFCA in its current form but allows Mr. Becker to be confirmed could, in the eyes of employers opposing EFCA’s passage, turn out to be a pyrrhic victory.
 

A settlement of this magnitude in a case that did not involve strike misconduct, plant closure, or wholesale discharges reflects the Board's clear intent to put real teeth into its enforcement process, particularly with regard to the obligation to bargain for contracts in good faith.  This settlement may be raised by opponents of the Employee Free Choice Act as evidence that the Board already has sufficient ability under existing law (the National Labor Relations Act) to aggressively enforce collective bargaining obligations, which obviates any need for remedies such as mandatory arbitration.

Since January 1, 2008, the Board has operated with three vacancies, leaving only two members to make decisions regarding labor-management disputes in the workplace.  In the past 16 months, Chairman Wilma Liebman and Member Peter Schaumber have issued more than 400 decisions—all of which could be invalidated based on the Supreme Court’s ruling.  Dozens of these decisions were appealed to federal courts of appeal on the two-member question, and the appellate decisions have been mixed.  The U.S. Courts of Appeal for the First, Second, and Seventh Circuits have upheld the decisions as valid, while the D.C. Circuit took the opposite position. 

Resolution of the issue turns on interpretation of the National Labor Relations Act’s quorum provision, 29 U.S.C. § 153(b).  In arguing for rejection of the Board’s ruling, New Process Steel relies on the Act’s statement that “three members of the Board shall, at all times, constitute a quorum of the Board.”  The Board’s contrary position is based on statutory language that indicates that two members may constitute a quorum when an appropriate designation has been made.

Until the issue is resolved by the Supreme Court, the precedential value of the two-member decisions will remain uncertain.