On April 25, 2017, Dorothy Dougherty, Deputy Assistant Secretary of the Occupational Safety and Health Administration (“OSHA”) and Thomas Galassi, Director of OSHA’s Directorate of Enforcement Programs, issued a Memorandum to the agency’s Regional Administrators notifying them of the withdrawal of its previous guidance, commonly referred to as the Fairfax Memorandum, permitting “workers at a worksite without a collective bargaining agreement” to designate “a person affiliated with a union or community organization to act on their behalf as a walkaround representative” during an OSHA workplace investigation.

The Lawsuit Challenging the Participation of Union Representatives in OSHA Inspections

Two days later, on April 27, 2017, the National Federation of Independent Business filed a  with the United States District Court for the Northern District of Texas, effectively declaring victory in their lawsuit challenging the issuance of the Fairfax Memorandum as being inconsistent with and unsupported by the Occupational Safety and Health Act, and the regulations issued under it allowing for the limited participation of third party experts during OSHA conducted workplace safety inspections.

For readers who have been following this issue and the litigation, the withdrawal of the Fairfax Memorandum and the plaintiff’s decision to discontinue their law suit should come as no surprise. This past February, the court denied OSHA’s motion to dismiss the lawsuit challenging the Fairfax Memorandum and OSHA’s decision to allow the participation of union representatives in non-union workplaces, finding that the plaintiff had “stated a claim upon which relief can be granted,” and that “the [Fairfax Memorandum] flatly contradicts a prior legislative rule as to whether the employee representative” in such a walk-around inspection “must himself be an employee.”

OSHA and the DOL’s Decision to Withdraw the Fairfax Memorandum

Less than a week later, OSHA filed an Unopposed Motion For Extension of time to answer the complaint in the Federation’s lawsuit, explaining to the Court that “the extension of the deadline for defendants to answer is necessary to allow incoming leadership personnel at the United States Department of Labor adequate time to consider the issues.”

The Memorandum withdrawing the Fairfax Memorandum reiterates the requirements of 29 CFR 1903.8 (c) that an employee representative who accompanies an OSHA representative during a walkaround workplace inspection “shall be an employee of the employer,” and that the only exceptions in which a non-employee may participate is “where good cause is shown” and the participation of a non-employee, such as an industrial hygienist or a safety engineer” is “reasonably necessary to the conduct of an effective and thorough inspection of the workplace” in the judgment of the OSHA Compliance and Safety Health Officer conducting the examination. Notably, however, rather than actually stating that the Fairfax Memorandum was inconsistent with the provisions of the statute or the OSHA regulations, the April 25th memorandum simply refers to it as “unnecessary.”

What this Means for Employers

First and foremost, OSHA’s issuance of the April 25th memorandum makes clear that union representatives who are not the certified or recognized bargaining representative of the employees at a facility to be inspected by OSHA have no legal right to participate in such inspections.  Accordingly, it is equally clear that an employer faced with such an inspection at a facility that a union is seeking to organize should understand that the union’s representatives have no right to participate.

An important effect of the withdrawal of the Fairfax Memorandum will be to deny unions a potentially potent tool for organizing. As Judge Fitzwater described in his Memorandum and Order denying OSHA’s motion to dismiss the Federation’s lawsuit in February, unions such as the UAW in its ongoing organizing campaign at Nissan in Tennessee have come to rely upon participation in OSHA inspections as a valuable tool.

No doubt with the confirmation of Secretary Acosta, leadership of the Department of Labor will continue to review and reassess positions and actions taken during the past eight years.

On March 21, 2017, the National Labor Relations Board (“NLRB” or “Board”) found that a Teamsters local violated Section 8(b)(1)(A) of the National Labor Relations Act (“Act”) by failing to provide sufficient information about the financial expenditures of the local and its affiliates to two workers employed in a bargaining unit who exercised their rights to object to paying union dues and fees pursuant to Communications Workers v. Beck, 487 U.S. 735 (1988).

Teamsters Local 75 – Schreiber Foods

In Teamsters Local 75, affiliated with the International Brotherhood of Teamsters, AFL-CIO (Schreiber Foods) the NLRB issued its Second Supplemental Decision and Order following up on prior Board decisions in the case’s long history and unanimously held that Teamsters Local 75 unlawfully sought to collect union dues and fees from two employees who invoked their Beck objector rights.  Specifically, the Board ruled that the Union failed to provide adequate and detailed financial disclosures because, in addition to the providing the details about the local’s own expenditures of employees’ dues, the Board ruled the local must also provide details about its affiliates’ financials resulting from the local’s “per capita tax” expenditure—that is the portion of dues money that the local shares with its affiliates.  With respect to the Teamsters, the “per capita tax” is the amount that a local of the Teamsters union pays, using a portion of each employee members’ dues money, to three affiliated entities—the International Brotherhood of Teamsters (International), the relevant Conference of Teamsters (Conference), and the relevant Teamsters Joint Council (Jt. Council).

The Board’s Reasoning

The Board relied in part on its rationale and holding in Teamsters Local 579 (Chambers & Owen), 350 NLRB 1166, 1170-1171 (2007), wherein the Board overturned its prior holding that a union that pays per capita taxes to its affiliates is not required to provide Beck objectors with information regarding “how its affiliates determined the chargeability to the objectors of the per capita taxes that the affiliates received and spent.” Id. at 1168.  Rather, in Chambers & Owen, the Board not only held that “this affiliate information must be furnished to a Beck objector so that he or she can determine whether to file a challenge” id. (emphasis in original), but it also found that the union’s failure to provide such information violated Section 8(b)(1)(A) and its duty of fair representation. Id. at 1169, 1171.

What the Board Will Now Require

Here, the Board reached the same conclusion—and went a step further—noting that Teamster Local 75 must provide the Becks objecting employees with the following detailed expenditure information:

[T]he major categories of its expenditures, the percentage of each category that it considers chargeable and nonchargeable, and a detailed explanation of how it calculates its allocation of expenditures; the names of its affiliates and other entities with which it shares income from dues and fees, the amounts of income shared, the major categories of expenditures of each affiliate or other entity and the percentages of each category those affiliates and other entities consider chargeable and nonchargeable, and a detailed explanation of how the affiliates and other entities calculated their expenditure allocation.

 What This Means Going Forward

This holding essentially means that unions will have to disclose much more detailed financial information when employees exercise their Beck rights—information that unions will likely be far more resistant and hesitant to provide.  With affiliates’ expenditures coming under greater scrutiny, it also makes it more likely that Beck dues objectors will seek to have less of their money going to the unions (and their affiliates) activities.  With more Americans than ever choosing to be union-free and/or choosing not to be union members, this decision places much more power with individual employees, and emboldens their protected right to refrain from union activity, a right already afforded under the Act but often glossed over by unions.

Even further expanding the National Labor Relations Board’s (“NLRB”) holdings in D.R. Horton and Murphy Oil limiting employer requirements concerning class action waivers, on June 26, 2015, an NLRB administrative law judge (“ALJ”) ruled that even a non-mandatory arbitration agreement that is voluntarily entered into by employees is unlawful if it requires employees to waive joint, class or collective actions in all forums, judicial and arbitral.

In November 2011, AT&T Mobility Services (“AT&T”) sent via email a Management Arbitration Agreement (“Agreement”) to 24,000 of its employees who were not represented by unions that included a class and collective action waiver.  The email made clear employees had the right to opt-out of the Agreement and provided employees instructions on how to do so electronically.

The email’s subject line read: “Action Required: Notice Regarding Arbitration Agreement.”  Once the Agreement was electronically opened, the page linked to a button marked “Review Completed,” which when clicked, indicated that an employee had reviewed it.  Employees who did not click on the button were sent additional emails until they reviewed and acknowledged the Agreement.

The emails provided each employee with a deadline of February 6, 2012 by which to choose to opt-out of the Agreement and explained that opting out meant the employee was declining “to participate in the arbitration process.”  The messages also included assurances that no adverse action would be taken against employees who choose to opt out, provided employees with a hotline number to call should they have any questions and explicitly stated that all employees could still bring claims before administrative agencies.

In June 2013, three employees filed a wage and hour class action in federal district court.  AT&T convinced the plaintiffs’ attorney that two of three employees had failed to opt-out of the Agreement and thus were bound to arbitrate their claims on an individual basis.  AT&T argued that employees who had not opted out were bound by the Agreement and had waived their right to participate in the class action.

The class action continued in federal court, and the federal district court judge found that only those 175 employees who had opted-out of the Agreement were eligible to participate in the class (and only 20 actually opted to participate).

The two initial plaintiffs who had not opted out of the Agreement proceeded to arbitration with their claims and eventually sought new counsel.  Their new attorney filed an unfair labor practice (“ULP”) charge with the NLRB on their behalf, arguing that the Agreement violated their rights under the National Labor Relations Act (“NLRA”) by interfering with their right to participate in a class action, a form of concerted activity.  The Board’s Regional Director agreed, issued a Complaint, and the matter proceeded to a hearing before an ALJ.

While the NLRB ALJ conceded that the Agreement “initially was not mandatory” due to the opt-out option, she took issue with what she concluded was an absence of evidence that employees were actually appraised “in layman’s terms, of the ‘real-life’ consequences of the choice they were being asked to make.”  On that basis, the ALJ reasoned that once an employee failed to opt-out, there was “no opportunity for an employee to reconsider his or her decision.”

The ALJ held that an employer may not require employees to enter into arbitration and class action waiver agreements—even where the employee voluntarily elects not to opt out—if the agreement includes an irrevocable waiver of the employee’s future rights protected by the NLRA, such as the right to participate in joint, class or collective actions.

As a remedy, the ALJ ordered AT&T to rescind the Agreement, or to revise it to make clear that employees are not required to waive their right to pursue joint, class or collective actions in all forums, arbitral or judicial.

While the ALJ had no problem stating that she was bound by NLRB precedent and the holdings of D.R. Horton and Murphy Oil, she failed to mention that Section 7 of the NLRA also affords employees the right to refrain from—and thus opt out of—collective action.  Specifically, while the current Board, and the ALJ here, have conjured a prohibition on class action waivers out the clause of Section 7 which states that employees “shall have the right to…engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection…,” each has ignored Section 7’s equally important counterpart which provides that employees “shall also have the right to refrain from any or all such activities….”

Despite the fact that every U.S. Court of Appeals that has been asked to review D.R. Horton and Murphy Oil has outright rejected the NLRB’s extreme holdings concerning class and collective action waivers in arbitration agreements, the Board pushes forward undeterred and continues to adhere to, and ALJ’s continue to follow, the Board’s rationale and holdings articulated in those cases.

The unanimity and absence of any split among the Courts of Appeal makes it all the more likely that the U.S. Supreme Court will eventually address the NLRB’s very aggressive anti-arbitration agreement position.  Considering that the NLRB’s view directly conflicts with the Supreme Court’s prior rulings regarding class action waivers in arbitration agreements, it will be interesting to see how the NLRB’s position holds up if and when it ultimately comes under Supreme Court scrutiny.

In the meantime, the area has become increasingly difficult for employers to navigate.  Any employer that wishes to adopt an arbitration agreement with its individual employees that provides for some kind of joint, collective, or class action waiver should contact experienced labor counsel to determine the best course of action for the particular employer.

While we have been reminding readers of the fact that  the National Labor Relations Act (the “Act”) protects employees regardless of whether they are represented by a union and the Act applies to non-unionized workforces, too, recently  a National Labor Relations Board (the “NLRB”) Administrative Law Judge issued a decision following an unfair labor practice (“ULP”)  hearing based on a charge filed by a teacher at New York City’s prestigious Dalton School that should serve as an object lesson for employers in all non-union businesses.

The case, Dalton School, Inc., involved a series of emails concerning a school musical. The case arises out of a doomed production of a middle school rendition of Thoroughly Modern Millie. The Charging Party, David Brune, was one of five teachers in the theater department at the Manhattan private school. In late 2013, the theater department starting putting together the Millie production, including assigning roles, rehearsing lines and songs and preparing sets and costumes. In early January 2014, just weeks before opening night, complaints regarding Asian ethnic stereotypes in the play by parents and faculty were received by the school’s administration.  . The school ordered Brune to discontinue all work on the production two weeks prior to the opening; and eventually, certain offending parts of the play were re-written. Brune only learned that the revamped production would open on schedule three days prior to the opening. Despite the short notice, and with a lot of work in that short period, the production was successful.

Afterwards, Brune shared his views with how the school’s administration handled the concerns and the changes in the play with the other faculty members in the school’s theater department. Through a series of drafted letters to school management, and e-mails within the department, Brune and the others spoke of the redress they felt they should receive for the mishaps with Millie and their views as to how to avoid a repeat in the future. In one of these emails, Brune accused school management of lying to the theater department.

A month after he sent the emails, Brune was called into a meeting with the school management, where they debriefed on the Millie situation. The head of the school asked Brune if he ever said anything negative about the school administration, such as accusing it of lying. He denied saying anything negative. On April 17, 2014, Brune was again summoned to a meeting with School management, but this time, he was presented with a copy of an email he had sent to other teachers during February, in which he wrote that  that management had lied to the theater department and the students. At this meeting, Brune was told his contract would not be renewed for the next year and that he could leave immediately or finish out the school year.

Rather than going quietly into the good night, Brune filed a ULP charge with the New York regional office of the NLRB claiming that he had been terminated for engaging in protected concerted activity, that is his communications with his fellow teachers. Following an investigation, the Board’s Regional Director issued a complaint and the matter was tried before ALJ Arthur J. Amchan.

In defending against the claims, Dalton denied that the decision not to renew Brune’s contract for the following year was not related to any concerted, protected activity.  Rather, the school asserted that the decision not to renew Brune’s contract was based on the fact that he had been dishonest in the March meeting when asked whether he ever stated that School management lied about the Millie production.

The ALJ found otherwise, and concluded that Dalton rescinded his employment contract because he had engaged in protected, concerted activity when he communicated with his fellow teachers about how the school’s administration had handled the matters. Specifically, the ALJ concluded that the e-mails between the theater department members discussing how to address concerns about the Millie production with school management were concerted protected activity. The Judge reasoned that since the e-mails clearly identified each employee who was involved in the e-mail chain, Dalton was aware that there was more than one employee involved in the communications, putting it on notice that the activities were concerted. The ALJ further found that the school’s actions in the March meeting violated the Act because they were designed to “trap” or catch Brune in a lie about the February e-mail.

This case is a vivid illustration of how employee actions about a wide range of work related matters, including in non-unionized workplaces, can rise to the level of protected activity, even if the actions are as simple as the exchange of emails among co-workers.

New Union Rules and Rulings: Proactive Strategies for Employers Facing Today’s Aggressive National Labor Relations Board and New Expedited Representation Elections

April 14, 2015 – Hilton Westchester, Rye Brook, New York

May 7, 2015 – The L.A. Hotel Downtown, Los Angeles, California

The National Labor Relations Board (NLRB) has adopted dramatic new rules and processes for union representation elections scheduled to take effect on April 14, 2015. The NLRB has also changed many of its standards concerning workplace rules, handbooks and policies affecting ALL EMPLOYERS, not only unionized workplaces.

This interactive workshop will address critical headline issues developing from today’s aggressive, union-friendly NLRB and provide innovative techniques and proactive and preventive strategies to prepare and respond to these developments. Specifically, our speakers will explain and offer tactics on:

  • New election rules that will bring fast elections in small units, with limited opportunity for employers to present both sides to employees and resolve key questions before a vote
  • NLRB’s evolving and expansive definition of joint employers including franchisors and franchisees
  • Developing and enforcing handbooks, policies, practices and work rules, including use of email, social media, and protection of confidential information that will withstand the NLRB’s increasing scrutiny
  • NLRB’s expanding view of protected concerted activity, including social media, workplace confrontations, class action waivers and other recent NLRB decisions

To review locations and a briefing agenda, please click here.  To register, please click here.

The fee to attend this briefing is $50 for the first person and $25 for each additional person from the same organization. The fee includes breakfast, workshop materials, and lunch. Overnight accommodations can be arranged directly with the hotel.

For additional information, please contact Elizabeth Lynch Gannon at egannon@ebglaw.com or 202/861-1850.

An NLRB Administrative Law Judge issued a Decision on April 29th in which he found that when a waiter in a restaurant in New York City, acting alone, instituted a class action lawsuit claiming violation of state or federal wage and hour laws, he was  engaging in concerted activity on behalf of himself and co-workers, even if none of those co-workers are aware of the filing.  While the decision does not mention whether the waiter was represented by a union, it seems pretty clear that there was no union in this case.

Thus, the Judge concluded, when the restaurant terminated the waiter, it did so because, whether he knew it or not, he was engaging in concerted, protected activity with the restaurant’s other employees.  The Judge also noted that when the owners read the complaint and saw that it had been filed on behalf of a class of similarly situated employees as well, the employer likely believed that the waiter was acting with others for their mutual benefit.

The case involved the issue of whether such an employee, whose employer terminated his employment the day it received a copy of the employee’s lawsuit in the mail from the employee’s counsel terminated the employee for engaging in protected, concerted activity as that term is defined under the National Labor Relations Act (the Act or the NLRA) or whether the employee was fired for something he alone did for himself. If he was not acting in concert with co-workers the Judge opined that the employee’s termination would not have violated the Act (although it may have violated other laws).

ALJ Raymond Green distilled the case down to this fundamental question: when an employee files a lawsuit “relating to wages,” is that employee “engaged in concerted activity within the meaning of Section 7 (of the National Labor Relations Act),” or is such an employee “acting solely in pursuit of his own interests?”  The Judge concluded although it was clear that the charging party acted alone, the very language of the complaint, which stated that it had been filed on behalf of the name plaintiff and “on behalf of a class of similarly situated employees who work or have worked at the (restaurant) over a three year period of time,” “it could be argued that (the waiter) sought ‘to initiate or to induce or to prepare for group action.”

The Judge recommended that the NRLB issue an order directing the waiter’s reinstatement with full back pay and seniority.  He also recommended that the employer post a notice to employees that advised employees that among their rights under the Act is the righto “file lawsuits on behalf of themselves and others relating to their wages or other terms and conditions of employment.”

The decision is a reminder that with the current NLRB, with its mindset of expanding its reach into non-union workplaces that a broad range of actions that an employee may take on his or her own behalf are likely to implicate the rights of co-workers and thus be found to be protected under the NLRA as concerted activity. Surely this would be the case in virtually every class action lawsuit under state or federal wage and hour laws.

While most Americans were preparing for their Thanksgiving Feast, President Obama showed his thanks last week to Big Labor and its hundreds of millions in campaign contributions by ignominiously allowing his recently confirmed Labor Secretary to move forward his DOL’s long pending radical proposal to dramatically change the decades old “Persuader Regulations”.  The Proposed Rule is designed to give unions both an organizing and bargaining advantage by significantly restricting the right and ability of employers to obtain legal counsel and lawfully communicate with employees about labor matters.

Unbalance the Playing Field – Silence the Lawyers 

As anyone with a cursory familiarity with Dick the Butcher’s famous quote “The first thing we do, let’s kill all the lawyers,” from Shakespeare’s ”Henry VI,” is aware, the true expression behind the statement was that in order to destroy liberty and conquer the opposition, one must first deprive the opposition of their legal rights, including their ability to obtain the advice and support of lawyers.   Playing the role of Dick, the DOL seeks to butcher the rights of employers by revising the regulations to substantially interfere with their attorney-client relationships.

The proposed regulations drew the immediate criticism of everyone from Senators, to both employer and employee rights groups, to the American Bar Association raising serious ethical, economic and practical concerns.

Although the regulations were originally proposed in June 2011 with an extended comment period closing in September 2011, they were seemingly on the back burner as the President focused on reelection, an aggressive yet embattled NLRB and the launch of Obamacare.  However, now with his NLRB at full strength , without any fanfare, while America was distracted last Tuesday, the DOL released its Fall Rule List where for the first time it disclosed that the controversial regulations will be moving forward and a Final Rule will be released in March 2014.

The Proper Historic Advice Exemption

The Rule radically alters the regulations implementing the “Advice Exemption” to the Labor Management Reporting and Disclosure Act of 1959 (“LMRDA.”).  The LMRDA requires disclosure of an employer’s use of professional persuaders or middlemen who would communicate with employees on their behalf and attempt to persuade them against unionization or otherwise to support the employer’s position. Recognizing the proper  role for labor counsel and the attorney-client privilege, Section 203(c) of the LMRDA provided a broad “Advice Exemption” from the disclosure requirements.

For over 50 years this Advice Exemption has been properly, effectively and simply administered by distinguishing direct communications with employees from an attorney’s counsel to an employer-client with communications, drafting, rewrites or recommendations concerning such communications being exempt from LMRDA’s disclosure requirements and recognized as protected attorney-client communications and attorney work product.  The existing regulations have provided a clear line of demarkation; as long an employer’s lawyer or consultant did not communicate directly with employees and as long as the employer remained free to accept or reject any draft materials prepared  by them (speeches, letters, written communications, etc.), they were covered by the Advice Exemption and not subject to disclosure or reporting by the employer or the counselor.

The Proposed Rule Would Eviscerate the Advice Exemption

The new Proposed Rule intentionally eviscerates any meaningful use of the Advice Exemption.  As proposed the rule provides:

In contrast to advice, “persuader activity” refers to a consultant’s providing material or communications to, or engaging in other actions, conduct or communications on behalf of an employer that, in whole or in part, have the object directly or indirectly to persuade employees concerning their rights to organize or bargain collectively.

76 Fed. Reg. 36182 (emphasis added).

The bolded sections above make it clear that the Advice Exemption would be swallowed up by the new expansive definition of  persuader activity as now “other actions” could include discussion regarding strategy, reviews of employer drafts and myriad other ways labor attorneys currently aid their clients.  Likewise, the “in part’ and “indirectly” aspects of the definition may apply to essentially any meaningful advice or counsel provided by labor counsel as a labor counsel is typically not doing his/her job well if they are not considering both the legal and practical implications of their advice.

Moreover, if even only a portion of what an employer has its labor attorney working on in part and indirectly concerns this new expansive definition of persuader activity the Proposed Rule would require disclosure of who their advisors are, how much they paid them, the area(s) they obtained their assistance on and a specific description of each task they obtained assistance on.

Final Rule Could Interfere With Employer’s Standard Labor Needs

If the Final Rule does not deviate from the Proposed Rule it could mean the following typical areas of labor attorney assistance may lose the attorney-client confidentiality employers have become accustom to rely on:

  • Advice on union avoidance strategy
  • Supervisory training on the NLRA
  • Advice on or draft pre-election communications
  • Advice on or draft pre-election speeches
  • Advice on or draft communications about union negotiations
  • Advice on or draft strike communications
  • Advice on or draft communications to unions or employees regarding grievances, information requests, and other contract administration issues
  • Review of or draft Employee Handbooks, Policies and Agreement (whether or not the employer is unionized)
  • Review of or draft employee communications on any issues (bonuses, policies, etc)

The Proposed Rule may not kill lawyers but it certainly is aimed at killing the attorney-client privilege and chilling employers’ ability to communicate lawfully with their employees.  This is expected spawn numerous legal challenges from a wide range of groups  but also vex employers as those challenges are litigated.

Management Memo will keep readers updated as the Final Rule comes closer and will provide Management Missives on how to cope should the Final Rule resemble the Proposed Rule.

 

 

On August 1st President Obama made a bold statement by appointing Richard Griffin to serve as the NLRB’s General Counsel only three days after the former union lawyer vacated his unconstitutional recess appointment as a NLRB Board Member. The President statement by appointment made at least two things clear –

  1. The President wants an aggressive pro-labor General Counsel and NLRB, and
  2. The President values advancing the labor agenda over cooperation with the US Senate.

As we discussed here on July 30th the Senate confirmed a full Board for the first time in a decade as a result of a “deal” in which Senate Republicans capitulated to a threat from Senate Democrats to change the rules on filibusters. We noted last week that this deal was likely not a good deal at all for employers as it resulted in three former union lawyers appointed as the controlling majority of the Board.

For employers, one of the only concessions of the “deal” was that it resulted in the withdrawal of the pending nominations of Griffin and Sharon Block to the Board. Griffin and Block of course had served as unconstitutionally appointed recess appointments since January 2012. During their period on the Board they issued a number of controversial pro-labor decisions and were generally viewed as activist Board members. To the chagrin of employers and Congressional Republicans they also continued to issue decisions even after multiple Courts of Appeals ruled they were unconstitutionally appointed and had no authority to act. In May Senator Lamar Alexander (R-Tenn.) encapsulated the view of many noting:

My problem is that they continued to decide cases after the federal appellate court unanimously decided they were unconstitutionally appointed. Not only has the President shown a lack of respect for the Constitutional role of the separation of powers… but I believe [Griffin and Block] have as well.

The President’s withdrawal of their nominations was a symbolic, if not substantive victory.

By nominating Griffin to serve as the agency’s top lawyer and prosecutor, the President has both symbolically and substantively thumbed his nose at the Senate Republicans and employers.

In fact, rather than removing Griffin’s influence from the Board by the deal, it seems that the President may have actually enhanced that influence. As the General Counsel Griffin will serve an important policy role in deciding where the prosecutorial direction of the Board. The General Counsel has the final say in whether the Board pursues cases which reverse existing Board precedent, continue recent expansions of Section 7 rights or create entire new theories of employer liability. The recent Boeing controversy as well as the assault on “at-will” agreements, social media policies and similar common sense employer policies are all the result of an aggressive NLRB General Counsel flexing his muscles.

With Griffin’s appointment to such an important position, employers have reason for concern. As if not borne out by the decisions of the Board since he was appointed, Griffin has a long history as a union advocate. For nearly twenty years prior to his 2012 recess appointment to Griffin was employed by the International Union of Operating Engineers as its counsel, rising to serve as the union’s General Counsel and to serve as on the board of directors of the AFL-CIO Lawyers Coordinating Committee. Griffin will now serve as the top prosecutor bringing cases before a Board, the majority of which is comprised of his former union lawyer colleagues.

While Griffin technically needs to be confirmed by the Senate to be General Counsel, in the absence of a confirmation, the Act permits the President to appoint Griffin as Acting General Counsel at any time, and to serve in that role the full powers of a confirmed General Counsel. In fact, Lafe Solomon, the current Acting General Counsel, has been serving in that capacity sine June 2010 without confirmation. So in essence, as soon as the President wants Solomon to pass the baton to Griffin, Griffin will start serving in his new role.

Management Missives

  • Employers should not expect a reversal of course for the Office of the General Counsel as Griffin is likely to continue, if not expand the efforts of Solomon to broaden the Board’s role in non-union workplaces.
  • Union-free employers should dust off their union avoidance programs and redouble their efforts.
  • Unionized employers should be prepared for more strident and aggressive unions.
  • All employers should review their policies and procedures to ensure they are not susceptible to challenge under the Board’s recent pronouncements.

By: Steven R. Blackburn

Wal-Mart Stores has filed an interesting and unusual lawsuit in Los Angeles Superior Court seeking injunctive relief to stop various activities conducted by the United Food and Commercial Workers Union and its subsidiary “OUR Wal-Mart” (Organization United for Respect at Wal-Mart) in connection with their long-running efforts to organize the giant retailer’s employees.  The complaint alleges that on numerous occasions in 2012 and 2013 demonstrators acting on behalf of the UFCW entered various Wal-Mart stores in California and disrupted store operations.  These actions included “flash mobs,” use of bullhorns inside stores, setting free balloons, and leaving perishable goods in carts without paying for them.  Wal-Mart had repeatedly notified the UFCW that these actions constituted unlawful trespass on its properties but the demonstrations persisted.  For example, on August 15, 2012, a group of OUR Wal-Mart activists allegedly entered a store in Baldwin Hills posing as shoppers.  Suddenly, one member of the group took out a bullhorn and began reading from a script.  At one point, the group began singing the Aretha Franklin song “Respect.”  The incident lasted about 20 minutes.  Some of these demonstrations occurred during the same period that employees at several Wal-Mart stores engaged in unprecedented one-day work stoppages in a show of support for UFCW’s organizing efforts.  As recently as April 24, 2013, UFCW staged a coordinated group trespass in numerous Wal-Mart stores throughout California.

Consistent with the experience of many retailers in California in dealing with labor union disruptions, Wal-Mart has had little success in its attempts to get local law enforcement to address these tactics.  The demonstrators often disperse before police arrive, or the police have refused to intervene on the grounds that the trespass was “labor activity.” 

Wal-Mart’s lawsuit seeks a permanent injunction barring UFCW activists from entering any of its 250 stores in California “for any purpose other than for shopping for and/or purchasing merchandise.”  The unusual angle of the claim is that it also seeks declaratory relief establishing that California’s controversial and much-litigated Moscone Act does not apply to labor-related demonstrations inside of Wal-Mart’s stores.

The Moscone Act, Cal. C.C.P. 527.3, was enacted in the seventies when the pro-labor California Legislature waded into a long-running litigation over the rights of labor unions to conduct organizing activities on private property in retail settings.  The Act, read together with Labor Code Section 1138.1, broadly limits the jurisdiction of the Superior Courts to provide injunctive relief to address disruptive activity related to labor disputes and union organizing.  For all practical purposes, these provisions as they have been interpreted by the California courts have made it all but impossible for retail employers to prevent disruptive trespassing on privately owned sidewalks, parking lots, court yards and the like by labor groups unless serious violence or property damage has occurred.

Wal-Mart’s case against UFCW will probably be given an edge by a recent decision of the California Supreme Court.  In late December 2012, a divided California Supreme Court in Ralphs Grocery v. UFCW (PDF) rejected several lower court rulings holding that the Moscone Act was unconstitutional because it favors “speech” by labor unions and allows unions a greater right to trespass on private property than other third parties.  Also rejecting contrary federal authority, the California High Court held that the Moscone Act was not unconstitutional.  But in a less-noted aspect of the Ralphs case, the Court sharply limited the long-standing Pruneyard doctrine, which stands for the proposition that certain privately owned property in shopping centers can qualify as a “public forum,” where picketing or hand billing that would otherwise be trespassing must be permitted.  The Court held in Ralphs that the privately owned sidewalk in front of the store at issue was not a public forum.  The Court limited application of the Pruneyard doctrine to places in retail settings where members of the public are invited to congregate for performances, socializing, and similar activities.  In her separate opinion Chief Justice Cantil-Sakauye specifically voiced the opinion that picketing or demonstrating inside a retail store is not protected.  The Ralphs decision has been appealed to the U.S. Supreme Court.

Repeatedly using italics to emphasize its point, the Wal-Mart lawsuit seeks an injunction to prevent labor-related activity only inside of its stores.  The rationale of the holding of Ralphs on the public forum issue would seem to support the Company’s position.  That is, if a privately-owned sidewalk outside of a store is not akin to public forum where free speech must be prevented, it would seem even more clear that the inside of a store should be protected from disruption.  And of course, when you file a lawsuit seeking resolution of a novel legal issue, it’s always great to know in advance that the Chief Justice of the Supreme Court agrees with your position. 

This lawsuit will be closely watched and will undoubtedly result in appeals no matter what the outcome.  In the meantime, retail employers should continue to be vigilant and consistent in protecting their property from intrusion by any sort of protesters, picketers or handbillers, whether they are affiliated with a labor union or not.  It is critical that every retail employer protect property that it owns with carefully drafted “time, place and manner” rules governing public access and that those rules be uniformly enforced.  If the property is leased, the employer should ensure in advance of any controversy over access by picketers or handbillers that the landlord is ready and able to limit the access to the full degree the law allows.

By: Evan Rosen and Adam C. Abrahms

Yesterday, in a 2-1 decision, the Third Circuit Court of Appeals became the second appellate court to issue a ruling that President Obama’s recess appointments to the National Labor Relations Board (the “Board”) were constitutionally invalid because they did not occur during an “intersession recess” of the United States Senate.  The case comes a few months after the D.C Circuit’s ruling in Noel Canning, which similarly held that the recess appointments were invalid.  The Third Circuit and D.C. Circuit decisions, taken together, call into question the validity of a considerable number of decisions and rules that the Board has issued over the past few years.

The case before the Third Circuit arose from a petition by the Service Employees International Union (“SEIU”) for certification as the bargaining representative of a unit of licensed practical nurses (“LPN”) employed by New Vista Nursing & Rehabilitation.  New Vista challenged the Union’s certification on the grounds that the LPN’s were supervisors and not eligible to organize under the National Labor Relations Act.   The Regional Director and the Board rejected New Vista’s argument, held the LPN’s were not supervisors and ordered an election to be held.  The Union received a majority of votes, but New Vista refused to bargain with the Union in order to challenge the Board’s conclusion.  As a result, the Union filed an unfair labor practice and a motion for summary judgment, which the Board granted.  The Board’s order granting summary judgment was issued by a three member panel that included Member Craig Becker, who was appointed by President Obama via the Recess Appointments clause of Article II of the U.S. Constitution.

New Vista argued that the Board’s three member panel was improperly constituted and without power to issue the order because of Member Becker’s appointment to the Board while the Senate was not actually in “recess.”  The U.S. Constitution grants the President power to fill vacancies without Senate confirmation during “the Recess of the Senate.”  The Third Circuit considered three possible definitions of the term “the Recess of the Senate:” (1) intersession breaks; (2) intersession and intrasession breaks that last at least ten days; and (3) any time in which the Senate is not open for business and is unavailable to provide its advice and consent.  In its decision, the Third Circuit concluded that the first definition was the correct interpretation, holding that “the Recess of the Senate” only refers to an intersession break.  For that reason it concluded that Craig Becker’s appointment was invalid because it occurred in March 2010 during an intrasession break.  Accordingly, the Third Circuit overturned the Board’s ruling against New Vista because the Board’s order had not been issues by a properly constituted, valid three-person panel.

This decision is significant because it casts further doubt on all of the decisions and rules that the Board has issued over the past three years.  As we have previously discussed, the Board under President Obama has been among the most activist in the agency’s history.  It has issued decisions and rules – many of which pertain to non-unionized companies – that touch on many aspects of the workplace, including for example, social media policies, confidentiality agreements, at-will employment, internal investigations, class action waivers, ambush election rules and notice posting requirements. But, in light of the Noel Canning decision and yesterday’s decision by the Third Circuit, employers have a strong argument that these decisions and rules were issued by an invalid Board and are thus without any legal effect.  Yesterday’s decision bolsters this argument because, unlike the Noel Canning decision, the Third Circuit’s focused on Member Becker, who was appointed in 2010 and is no longer on the Board.  This means that the breadth of Board decisions and rules that are invalid extends back to Becker’s appointment, which occurred in March 2010 when Chairperson Wilma Liebman’s term expired.

Last month the Board petitioned for certiorari seeking review of the Noel Canning decision by the Supreme Court.  The Supreme Court will have the final say on the issue, but in the meantime, President Obama’s recess appointments to the Board are also being challenged in cases brought before the Second, Fourth, Fifth, Seventh, Ninth and Eleventh Circuits.    This blog will provide an update when decisions in those circuits are issued.

Management Missives

  • In defending any unfair labor practice charge that relies on any of the NLRB Decisions after March 2010, Employers should contest any assertion that they are valid authority under with the investigation Region can rely and should cite to both Noel Canning and New Vista Nursing decisions.
  • Employers who have received any adverse ruling from the Board since March 2010 now have additional grounds to have the ruling vacated and should consider filing such an appeal in the D.C. Circuit or Third Circuit.