General Counsel Richard F. Griffin

NLRB Acting Chair Philip Miscimarra has given the clearest indication to date of what steps a new Republican majority is likely to take to reverse key elements of the Labor Board’s hallmark actions of the Obama administration once President Trump nominates candidates for the Board’s two open seats and the Senate confirms. In each of these cases, Miscimarra highlighted his earlier opposition to the majority’s changes in long standing precedents and practices.

The Acting Chair’s Position On the Board’s 2014 Amended Election Rules – The Emphasis On “Speed Above All Else” is Inconsistent With the Law

In a strongly worded dissent in European Imports, Inc., 365 NLRB No. 41 (February 23, 2017), the Acting Chair took issue the majority’s decision to deny an Employer’s Emergency Request for Review, that sought to postpone and reschedule a representation election scheduled to take place only three days after a significant number of the employees who would be eligible to vote approximately 25%, learned that they were included in the bargaining unit, and would be affected by the outcome of the vote.

In its Emergency Request, the employer urged the Board to postpone the election by a week, to endure that the employees would know whether they would be eligible to vote and if they were, to allow them to get the facts and make an informed decision when they voted. It also argued that holding the election so soon after the issuance of the Direction of Election “would deprive many employees of sufficient notice that they would be voting in election that would dictate whether they would have union representation.”

Disagreeing with the decision of Members Mark Pearce and Lauren McFerran to deny the employer’s Emergency Request without comment, Miscimarra took issue not only with the denial of this Request, but more broadly, with the Board’s 2014 Amended Election Rule (the “Rule”) and its “preoccupation with speed between petition-filing and the election,” the Rule’s “single-minded standard” calling for “every election (to be) scheduled for ‘the earliest date practicable . . .”

Miscimarra reiterated his position, as expressed in his dissent to the Board’s adoption of the amended Election Rule in 2014, that such an emphasis on speed above all else is inconsistent with the Board’s duty under the National Labor Relations Act “to assure to employees the fullest freedom in exercising the rights guaranteed” by the Act.

The Acting Chair again called for the Board to establish “concrete parameters” for the scheduling of elections that would ensure “reasonable minimum and maximum times between the filing of a representation petition and the holding of an election.”

In addition to addressing issues of timing, Miscimarra also took issue with the fact that during the representation hearing preceding the Direction of Election. The Board’s Regional Director had refused to permit the employer to present evidence and develop a record as to why it was being prejudiced in this case by the 2014 Amended Election Rule. The Regional Director ruled that because earlier judicial challenges to the facial validity of the Election Rule had been dismissed, the employer could not litigate the actual prejudice the Rule caused in this case.

Miscimarra made clear that in his view, the fact that earlier facial challenges to the Amended Election Rule had been dismissed, questions as to the validity of the Rule, when applied to specific facts remains open and that it is a “clear error and an abuse of discretion” to deny an employer the opportunity to litigate such issues when they arise.

The Acting Chair’s Position On the Obama Board’s Handbook and E-Mail Decisions

In another dissent in Verizon Wireless Inc., 365 NLRB No. 38 (February 24, 2017)  Miscimarra reiterated his strong dispute with the way in which the Obama Board has analyzed and decided cases challenging employee handbooks and policies, writing that Board’s current standard for deciding such cases “defies common sense.”

Under the Board’s 2004 Lutheran Heritage standard, the Board will find a handbook provision or policy to violate the Act and unlawfully interfere with employees’ rights to engage in concerted, protected activity if which in part rendered work rules and handbook provisions unlawful if employees “would reasonably construe” them to prohibit protected activities under Section 7 of the Act.

The Acting Chair reiterated his view, as explained in his lengthy 2016, dissent in William Beaumont Hospital, 363 NLRB No. 162, that the Board’s current test is unworkable, and fails to adequately recognize employer’s legitimate needs of employers. Calling on the Board and the Courts to overturn and reject the Lutheran Heritage standard, Miscimarra urged the adoption in its place of a new balancing test that would not only focus on employees’ rights under the Act, but that would also take into account employers’ legitimate justifications for a particular policy or rule, such as attempting to avoid potentially fatal accidents, reduce the risk of workplace violence or prevent unlawful harassment.

Miscimarra also took direct aim in his dissent at the He also wrote that he believes the Board should overturn its Purple Communication decision allowing employee virtually unfettered use of employer email systems and return to the former standard in Register Guard, which recognized that such systems are employer property and should be recognized as such. The dissent described the standard under Purple Communications as “incorrect and unworkable,” and called for a standard that would once again recognize “the right of employers to control the uses of their own property, including their email systems, provided they do not discriminate against NLRA-protected communications by distinguishing between permitted and prohibited uses along Section 7 lines.”

What This Means for Employers

As we noted when the President appointed then Member Miscimarra to serve as Acting Chair of the Board, meaningful change in how the Board interprets and applies the Act will not come until the two vacant seats are filled and a new majority is able to act. Additionally, current General Counsel Richard F. Griffin, Jr.’s term runs through August 4, 2017.

We expect change to come as ULP issues get before the Board. It is to be expected that any new Members appointed by the President will almost certainly share Acting Chair Miscimarra’s views on such issues as use of employer email systems and the review and enforcement of workplace rules, handbooks and the like.  A new balancing test such as that proposed in the Beaumont Hospital dissent is quite foreseeable.

Concerning the Amended Election Rule, things are a bit trickier. The Rule itself was the result of formal rule making, with public comment and input after the Board published its proposed Rule in the Federal Register.  Major changes in the Rule itself would require a new Board to follow the same processes, which are quite lengthy. However, there is certainly room, as Miscimarra’s dissent in European Imports demonstrates, for the Board to make changes in how it administers and processes cases even under this Rule, before any change to the Rule itself becomes effective.  The Acting Chair’s comments concerning the right of employers and other parties to due process, including the right to develop a complete factual record on disputed, material issues is something that can be changed through the administration and application of the Rule even without formal change.  So to, it would not be surprising for a new General Counsel to give guidance to the Board’s Regional Offices calling for them to apply their discretion to avoid circumstances like those that triggered the Emergency Request in European Imports to make sure that there are no more “three day elections.”

Periods such as this, where there is transition in interpretation and enforcement, are challenging but in reality they have been a part of the history of the enforcement and application of the Act for more than 80 years.  Students of the Board often speak of a pendulum and the need for those with business before the Board to try to anticipate its swings.  Careful consideration of not just what the “law” is now, but also what it is likely to be going forward will now once again be the watchword.

 

One of the questions asked of NLRB General Counsel Richard F. Griffin, Jr. following his presentation at this week’s meeting of the Committee on Developments Under the National Labor Relations Act of the American Bar Association was whether the National Labor Relations Board will follow the EEOC’s lead and adopt a practice of turning employers’ position statements in ULP investigations over to the unions and individuals who have filed the charges.

While his carefully phrased response was that the General Counsel’s office has not made such a decision at this time, most of those in the room took his answer to mean that this is probably going to become the Board’s practice as well in the near future.  Given the increased use of investigative subpoenas by the Board, this means that more and more employer records and documents are likely to be given to unions filing charges.  We will continue to monitor and report.

One of the hallmark initiatives of NLRB General Counsel Richard F. Griffin Jr. has been the pursuit of more aggressive remedies in response to what the General Counsel considers to be egregious unfair labor practices (“ULP’) activity.  While his predecessors and prior Board members spoke of “special remedies” that they would seek to impose in what they deemed extraordinary cases, General Counsel Griffin and today’s National Labor Relations Board (“NLRB” or “Board”) are much more frequently arguing for and directing remedies that go beyond those that the NLRB routinely imposed over the first 75 years following passage of the National Labor Relations Act (the “Act” or the “NLRA”).

The General Counsel Wants Guitar Center Stores to Pay the Union’s Bargaining Expenses

On July 24, 2015, Peter Sung Or, Regional Director Region 13 issued a Consolidated Complaint (pdf) against Guitar Center Stores, Inc., a nationwide retail chain, accusing the company of bargaining in bad faith in its negotiations with the Retail Wholesale and Department Store Union (“Union”) for contracts at the Chicago, New York and Las Vegas locations where the Union represents sales employees.  The Complaint consolidates seven ULP charges involving negotiations at those locations for collective bargaining agreements.  In addition to seeking the traditional remedy of an order directing the employer to bargain in good faith, the Complaint also calls for a Board order that would require the company “to reimburse the Union for its costs and expenses incurred in collective bargaining for all negotiations from July 2013 forward, including for example, reasonable salaries, travel expenses, and per diems” incurred by the Union.  The Complaint does not call for a date when the obligation to pay the Union’s bargaining expenses would conclude, but  apparently the General Counsel wants the employer to pay these costs until negotiations are completed and contracts are reached at each of these locations.

This Case Reflects the General Counsel’s Decision to Pursue “Enhanced Remedies” Much More Routinely

This case reflects decisions by the NLRB and its General Counsel to take a much more aggressive approach in seeking what are arguably punitive remedies against employers who are alleged to have violated the  Act and to more aggressively seek injunctive relief in the federal courts against what the General Counsel and Board believe to be serious ULP activity .  Section 10 of the Act gives the Board broad authority to remedy ULPs in order to effectuate the purposes of the Act and to encourage collective bargaining.  However, the Supreme Court has long interpreted this authority as being entirely remedial– the Board has no authority to issue punitive remedies such as fines or damages other than back pay.  Traditionally, the Board has ordered an employer who violated the Act to: (i) cease and desist the conduct found to be unlawful; (ii) cease and desist from violating the Act in any like or related manner; (iii) take appropriate affirmative action, e.g., rehire, bargain in good faith; expunge records, make employees whole, and (iv) post a notice to employees for 60 days.  In truly egregious and rare cases, the Board has ordered an employer to bargain with a union without an election where an employer commits such serious unfair labor practices that a fair election cannot be held and where the union can show that a majority of employees supported the union before the unfair labor practices– so-called Gissel Bargaining Order (pdf). The Board also has authority to seek Section 10(j) injunctive relief in appropriate cases.  Here too, the General Counsel is continuing to exercise his discretion to recommend (pdf) and pursue such relief far more than in the past.

Starting in 2006, the General Counsel begun  a series of initiatives involving bargaining for  initial contracts and undocumented aliens, in which the General Counsel has sought to expand the scope of the Board’s traditional remedies in cases of “extraordinary and flagrant violations.”  See “NLRB Reiterates Its Position That Undocumented Workers Are Entitled To ‘Conditional Reinstatement’ in Unfair Labor Practice Cases. These new remedies include: (i) extension of the certification year for bargaining with a newly certified union, (ii) gaining access to the employer’s property, (iii) notice reading by Board agents or Company officials, (iv)  imposing a schedule for bargaining; (v) requiring reports of bargaining status, and (vi) reimbursement of bargaining or litigation costs.

As a result of these initiatives, labor unions, as well as the General Counsel are starting to request that the Board award bargaining expenses as part of the remedy in cases where the Board finds that an employer has bargained in bad faith. NLRB General Counsel Griffin recently commented on this trend at the Annual Midwinter meeting of the ABA Labor and Employment Section when he stated that “[t]his is a continuation of previous initiatives by the Office of the General Counsel (citations omitted).  The relief may be requested by the Charging Party or sua sponte by the Regional Director, when the Regional Director believes such relief may be appropriate.” See General Counsel Memorandum GC-15-05, at 25 (pdf).

It is not yet clear how the federal courts will view the Board’s increased awarding of enhanced remedies since at this point there have been very few cases in which such Board orders have been subject to judicial review.  While the Supreme Court has long and unequivocally held that the Board cannot impose punitive remedies, recent court of appeals cases appear to cast doubt on where the line is drawn.  On May 8, 2015 the D.C. Court of Appeals in a case entitled FallBrook Hospital Corporation v NLRB  upheld the Board’s authority to award bargaining costs in a case in which the Board had found an employer to have engaged in what it referred to as an  egregious case of bad faith bargaining.  Citing the Board’s discretion in fashioning remedies for violations of the Act, and the great degree of deference that the Courts are to afford the Board’s interpretation of the Act,  the Court noted that the Hospital had not only committed a large number of ULPs but also had acted  in an “obstinate and pugnacious manner” in its negotiations with its employees’ union representative and had bargained with a “closed mind” and, in the course of the parties’ negotiations had “put up a series of roadblocks designed to thwart and delay bargaining.” For these reasons the Court deferred to the Board and enforced its order directing the Hospital to reimburse the union for its expenses and costs over the course of the negotiations.

What’s Next?

Given, all of this, it is no surprise that unions are increasingly asking for the Board to pursue these and other types of enhanced remedies when they file ULP charges and over the course of Board proceedings. Whether and where the Board will draw a bright line differentiating between what it will consider to be an egregious violation which it believes justifies and requires enhanced remedies and more routine hard bargaining cases, in which it will hold traditional remedies are adequate is yet unknown.  Also unknown is whether the Board is prepared to issue orders calling for such enhanced remedies when it is a union, not an employer, that has bargained in bad faith, is also unknown at this stage.

On March 18, 2015, NLRB General Counsel Richard F. Griffin, Jr. issued General Counsel Memorandum GC 15-04 containing extensive guidance as to the General Counsel’s views as to what types employer polices and rules, in handbooks and otherwise, will be considered by the NLRB investigators and regional offices to be lawful and which are likely to be found to unlawfully interfere with employees’ rights under the National Labor Relations Act (“NLRA” or the Act”).

This GC Memo is highly relevant to all employers in all industries that are under the jurisdiction of the National Labor Relations Board, regardless of whether they have union represented employees.

Because the Office of the General Counsel investigates unfair labor practice charges and the NLRB’s Regional Directors act on behalf of the General Counsel when they determine whether a charge has legal merit, the memo is meaningful to all employers and offers important guidance as to what language and policies are likely to be found to interfere with employees’ rights under the Act, and what type of language the NLRB will find does not interfere and may be lawfully maintained, so long as it is consistently and non-discriminatorily applied and enforced.

As explained in the Memorandum, the Board’s legal standard for deciding whether an employer policy unlawfully interferes with employees’ rights under the Act is generally whether “employees would reasonably construe the rules to prohibit Section 7 activity” – that is action of a concerted nature intended to address issues with respect to employees’ terms and conditions of employment. As we have noted previously, this General Counsel and Board have consistently given these terms broad interpretations and have found many employer policies and procedures, in handbooks and elsewhere, that appear neutral and appropriate on their face, to violate the Act and interfere with employee rights.  Many of these cases have involved non-union workplaces where there is not a union present and there is no union activity in progress.

There are two sections to the Memo. Part 1 of the Memorandum, which begins at page 2 and runs to page 20, offers a recap of NLRB decisions concerning 8 broad categories of policies, with summaries of the Board’s holdings and examples of policy language that the NLRB has found to unlawfully interfere with employees’ Section 7 rights and policy language that the Board has found did not unlawfully interfere with employees’ rights.  Section 2 reports on the General Counsel’s settlement with Wendy’s International LLC following an investigation of charges in which the General Counsel found portions of Wendy’s employee handbook unlawfully overbroad, with an explanation as to why the General Counsel found the policies in question to interfere with employees’ rights under the Act and a description of the language Wendy’s adopted to replace the problematic policies as part of its settlement of the charges. Both parts of the Memorandum will be of interest to employers and attorneys who draft, apply and enforce handbooks and other workplace policy documents.

Part 1: Examples of Handbook Rules found by the Board to be Lawful and Unlawful in recent decisions

  • Employer Handbooks Rules Regarding Confidentiality – The Memorandum reviews the Board’s precedents holding that “Employees have a Section 7 right to discuss wages, hours, and other terms and conditions of employment with fellow employees, as well as nonemployees such as union representatives.” Interestingly, the Memorandum also states that “broad prohibitions on disclosing ‘confidential’ information are lawful so long as they do not reference information regarding employees or anything that would reasonably be considered a term or condition of employment, because employers have a substantial and legitimate interest in maintaining the privacy of certain business information.”  The Memorandum further “clarifies” by advising that “an otherwise unlawful confidentiality rule will be found lawful if, when viewed in context, employees would not reasonably understand the rule to prohibit Section 7 protected activity.”
  • Employer Handbooks Rules Regarding Employee Conduct toward the Company and Supervisors – As explained in the Memorandum, “Employees also have the Section 7 right to criticize or protest their employer’s labor policies or treatment of employees.”  The Memorandum offers an overview of decisional law, with particular attention to cases involving rules that “prohibit employees “from engaging in ‘disrespectful,’ ’negative,’ ‘inappropriate,’ or ‘rude’ conduct towards the employer or management, absent sufficient clarification or context.”  As further noted, employee criticism of the employer “will not lose the Act’s protection simply because the criticism is false or defamatory.”
  • Employer Handbooks Rules Regulating Conduct Towards Fellow Employees – This section of the Memorandum focusses on language and policies that the Board has found to interfere with the Section 7 right employees have ‘to argue and debate with each other  about unions, management, and their terms and conditions of employment,” which the General Counsel explains the Board has held will not lose their protection under the Act, “even if it includes ‘intemperate, abusive and inaccurate statements.” Of particular interest in this portion of the Memorandum is the examination of policies concerning harassment.  The Memorandum notes that “although employers have a legitimate and substantial interest in maintaining a harassment-free workplace, anti-harassment rules cannot be so broad that employees would reasonably read them as prohibiting vigorous debate or intemperate comments regarding Section 7 protected subjects.”
  • Employer Handbooks Rules Regarding Employee Interaction With Third Parties – This section of the Memorandum focuses on employer policies and provisions that seek to regulate and restrict employee contact with and communications to the media relating to their employment.  The General Counsel notes that “(A)nother right employees have under Section 7 is the right to communicate with the new media, government agencies, and other third parties about wages, benefits, and other terms and conditions of employment,” and that rules “that reasonably would be read to restrict such communications are unlawful.” The General Counsel acknowledges however that “employers may lawfully control who makes official statements for the company,” any such rules must be drafted so as “to ensure that their rules would not reasonably be read to ban employees from speaking to the media or third parties on their own (or other employees”) behalf.
  • Employer Handbooks Rules Restricting Use of Company Logos, Copyrights and Trademarks – The Board has found many employer policies, whether contained in employee handbooks or elsewhere, that broadly prohibit employees from using logos, copyrights and  trademarks to unlawfully interfere with employees’ Section 7 rights.  While the General Counsel acknowledges that “copyright holders have a clear interest in protecting their intellectual property,” the Board has found, with the approval of such courts as the Fourth Circuit Court of Appeals, that “handbook rules cannot prohibit employees’ fair protected use of that property.”  In this regard the General Counsel states in the Memorandum that it is his office’s position that “employees have a right to use the name and logo on picket signs’ leaflets, and other protected materials,” and that “Employers’ proprietary interests are not implicated by employees’ non-commercial use of a name, logo, or other trademark to identify the employer in the course of Section 7 activity.”
  • Employer Handbooks Rules Restricting Photography and Recording – While many handbooks and policies prohibit or seek to restrict employees from taking photographs or making recordings in the workplace and on employer policy, the Memorandum states that “Employees have Section 7 right to photograph and make recordings in furtherance of their protected concerted activity, including the right to use personal devices to take such pictures make recordings.”  The Memorandum further notes that such policies will be found to be overbroad “where they would reasonably be read to prohibit the taking of pictures or recordings on non-work time.”
  • Employer Handbooks Rules Restricting Employees from Leaving Work – With respect to handbook or other policies that restrict employees from leaving the workplace or from failing to report when scheduled, the Memorandum notes that “one of the most fundamental rights employees have under Section 7 of the Act is the right to go on strike,” and therefore “rules that regulate when an employee can leave work are unlawful if employees reasonably would read them to forbid protected strike actions and walkouts.”  Not all rules concerning absences and leaving the workstations are unlawful.  A rule would be lawful if “such a rule makes no mention of ‘strikes,’ ‘walkouts,’ ‘disruptions’ or the like” since employees should “reasonably understand the rule to pertain to employees leaving their posts for reasons unrelated to protected concerted activity.”
  • Employer Conflict of Interest Rules – The Memorandum states that under Section 7 of the Act, employees have the right to engage in concerted activity to improve their terms and conditions of employment, even if that activity is in conflict with the employer’s interests.  It cites as examples of such activities that could arguably be in violation of broad conflict of interest policies as protests outside the employer’s business, organizing a boycott of the employer’s products and services and solicitation of support for a union while on non-work time.  The Memorandum notes that when a conflict of interest policy “includes examples of otherwise clarifies that it limited to legitimate business interests (note: as that term is defined by the General Counsel and the Board) employees will reasonably understand the rule to prohibit only unprotected activity.”

Part 2: The Wendy’s International LLC Handbook Cases

The second part of the Memorandum relates to the Board’s settlement of a series of unfair labor practice charges against Wendy’s International LLC (Wendy’s) alleging that various provisions of the handbook were overbroad and unlawfully interfered with employees’ rights under the NLRA.  The company entered into an “informal, bilateral Board settlement agreement.  In this section, the GC explains why various provisions were found unlawful and then sets forth negotiated replacement policies that the GC found did not violate the Act.  While not a formal “safe harbor” since this is the position of the General Counsel and not the Board, it offers very good advice for employers and attorneys in this area.  The Wendy’s policies that the General Counsel argued violated employees’ Section 7 rights and the replacements that the General Counsel found acceptable concerned the following areas:

  • Handbook Disclosure Provision – The handbook in issue contained a broad prohibition against disclosure of the handbook and the information it contained without the company’s express prior written permission.  The General Counsel found this to be unlawful because it prohibited disclosure of employment practices to third parties such as a union or the NLRB.
  • Social Media Policy – While the General Counsel acknowledged that employers have “a legitimate interest in ensuring that employee communications are not construed as representing the employer’s official position,” the General Counsel found the company’s rule to be overbroad since it prohibited a much broader range of communications that would be protected by Section 7.  This included photography and recording and no retaliation provisions.
  • Conflict of Interest Policy
  • Company Confidential Information Provision
  • Employee Conduct
  • Walking Off the Job Without Authorization
  • No Distribution/No Solicitation Provision
  • Restaurant Telephone; Cell Phone; Camera Phone/Recording Devices Provision

While Memorandum GC 15-04 arguably does not contain “new” information or changes in policy or case law, it should be useful for employers and practitioners (and employees) in that it provides a concise summary of the General Counsel’s views on this wide range of matters and examples of language that is likely to be found lawful in future proceedings.  Of course it is important to note that each charge is decided on its own facts and the actions and statements of employers and their supervisors in connection with the application and enforcement of the particular provision will almost always be relevant to the determination of whether the Board will issue a complaint on a particular ULP Charge.