As featured in #WorkforceWednesday:  This week, we look at the potential “game changing” legal and policy shifts coming to labor relations.

The Protecting the Right to Organize (PRO) Act, if enacted, would make the most significant changes to the National Labor Relations Act since the National Labor Relations Board (NLRB) was created in 1935. The PRO Act is a top priority of the union movement in the United States and is supported by President Biden, who claims to be the most pro-union president in U.S. history.  Attorney Steve Swirsky discusses the potential impact the PRO Act could have on employers. Beyond the PRO Act, Steve also looks at how Jennifer Abruzzo’s confirmation as NLRB general counsel could impact the agency’s litigation and enforcement agenda.

See below for the video and podcast links. For Other Highlights and more news, visit http://www.ebglaw.com/eltw219.

Video: YouTubeVimeo.
Podcast: Apple PodcastsGoogle PodcastsOvercastSpotifyStitcher.

On July 21, 2021, the U.S. Senate confirmed Jennifer Abruzzo to a four-year term as the General Counsel of the National Labor Relations Board (“NLRB” or “Board”). Ms. Abruzzo’s confirmation was by a vote of 51-50, with Vice President Kamala Harris casting the tie-breaking vote. Ms. Abruzzo was sworn in the next day, by NLRB Chair Lauren McFerran. As the NLRB notes, this is “the first time in NLRB history women are serving as both Chairman and General Counsel” of the agency.

Ms. Abruzzo has spent much of her career at the NLRB. She previously served as the Board’s Deputy General Counsel and Acting General Counsel during the Obama administration, and most recently served as Special Counsel for Strategic Initiatives to the Communication Workers of America (“CWA”), the country’s largest communications and media labor union. The CWA, like most other unions, is a strong supporter of the Protecting the Right to Organize Act, commonly referred to as the “PRO Act.”

The General Counsel’s Role

The General Counsel is the chief legal officer of the Board, and her responsibilities include setting the agency’s litigation and enforcement agenda and priorities and having general supervision of the NLRB field offices, and thereby has a significant hand in shaping the interpretation and application of the National Labor Relations Act (“Act”) and nation’s labor policies. Her confirmation, coupled with the expected change of the composition of the Board to a Democrat-appointed majority this summer, solidifies the shift to pro-labor and pro-union policy. President Biden has promised to be “the most pro-union president you’ve ever seen” and is a strong supporter of the PRO Act, and his nominations and appointments reflect that priority.

President Biden’s Firing of Former General Counsel Peter Robb

Ms. Abruzzo succeeds Acting General Counsel Peter Sung Ohr, who was named to that role in January 2021, following President Biden’s firing of Peter Robb, who had been nominated to the role by former President Trump and confirmed by the Senate early in his administration. President Biden, in an unprecedented action and sign of his interest in supporting unions, fired then-NLRB General Counsel Peter Robb on Inauguration Day, even though Mr. Robb’s four-year term had nearly 10 months left. The decision to remove Mr. Robb generated backlash and legal challenges and the close vote in Ms. Abruzzo’s confirmation reflected this.

There have been a number of legal challenges to the firing of Mr. Robb, and questions remain concerning whether Mr. Ohr, as Acting General Counsel, in fact had the legal authority to function as such. In March 2021, the NLRB denied an employer’s request to file a special appeal of a decision rejecting an employer’s motion to dismiss an unfair labor practice complaint issued by a Regional Director as an agent for the Acting General Counsel. The employer asserted that the complaint should be dismissed because Mr. Ohr’s appointment was unlawful, arguing that President Biden didn’t have the authority to fire the general counsel of an independent agency since the Board is supposed to be removed from White House influence.

More recently, Goonan v. Amerinox Processing, Inc., the first court decision involving a challenge to Mr. Ohr’s authority, was issued. In that decision, a district court in New Jersey held that unlike Board members, who may only be removed by the President for cause following notice and hearing, Presidents may lawfully remove general counsels at their discretion. This issue is likely to be considered by additional courts notwithstanding Ms. Abruzzo’s confirmation.

General Counsel Abruzzo’s Background

Ms. Abruzzo is seen as keen on expanding and protecting the rights of workers to join unions and likely to advocate for more union-friendly policies under the Act. She is expected to seek the reversal of budget cuts and staffing reductions implemented under Mr. Robb and policies that critics say have hobbled the ability of NLRB lawyers to pursue unfair labor practice charges and investigate worker complaints against employers.

Ms. Abruzzo has spent the majority of her career at the NLRB, serving for more than two decades in a variety of roles and eventually rising to serve as Deputy General Counsel during the Obama administration, where she served under General Counsel Richard Griffin. She then briefly served as Acting General Counsel following the end of his term.

Much like her immediate predecessor, Mr. Ohr, Ms. Abruzzo is expected to continue rolling back Trump-era policies and to argue for more union-friendly interpretations of the Act. For example, Mr. Ohr affirmed in a recent General Counsel Memorandum his plan to pursue a broadening of employees’ protections under Section 7 of the National Labor Relations Act beyond concerted activities relating to union activity and labor organizing, for instance, by expanding the Board’s traditional view of protected concerted activity to protect employees’ political and social justice advocacy activities under Section 7.  A hallmark of Mr. Griffin’s term as General Counsel was an effort to expand the Board’s application of the Act in non-union workplaces and Ms. Abruzzo is expected to renew that focus.

Following Ms. Abruzzo’s confirmation, the NLRB announced Mr. Ohr’s elevation to the position of Deputy General Counsel, the role Ms. Abruzzo held during the Obama administration.

The Changing Composition of the Board

The Board consists of five members, one of whom serves as Chairman. All members are appointed by the President and confirmed by the Senate. Traditionally, a majority of Board members are from the same political affiliations as the President.

The Board is currently led by Chairman Lauren McFerran, a Democrat first nominated by President Obama and elevated in January 2021 to Chairman by President Biden. At present, the three other Board members are Republicans, with one spot vacant. Although there is currently a Republican majority in the Board, this is expected to change, when Board Member William Emanuel’s term expires on August 27, 2021.

President Biden recently nominated two Democrats, Gywnne Wilcox and David Prouty, to serve as Board members, both of whom have spent their legal careers representing unions. Their nominations have been advanced by the Senate Committee on Health, Education, Labor & Pensions and are expected to be brought to the full Senate shortly. Ms. Wilcox is both a partner in the union-side law firm of Levy Ratner and an Associate General Counsel for 1199 SEIU, United Healthcare Workers East. Mr. Prouty presently serves as General Counsel of Service Employees International Union Local 32BJ, the New York-based local that represents more than 175,000 service workers on the East Coast and, if confirmed, will take the seat to be vacated by Mr. Emanuel in August 2021.

What Can Employers Expect?

The combination of a President who openly expresses the goal of being “the most pro-union president you’ve ever seen” and who was elected with strong union support, together with a General Counsel who is coming to her position from the CWA and a career at the NLRB, with a Democratic majority on the Board, including two Board Members who have spent much of their professional lives seeking to advance the interests of unions and workers, is likely to produce an activist Board and General Counsel’s office that will seek to shift the balance in labor law enforcement and administration in ways that will present challenges for employers.

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Christopher Shur, a Law Clerk – Admission Pending (not admitted to the practice of law) in the firm’s New York office, contributed to the preparation of this post.

On June 15, 2021, the Office of General Counsel of the National Labor Relations Board (“NLRB” or “Board”) released an Advice Memorandum, explaining that an Illinois pub did not commit an unfair labor practice when it fired an employee who had previously complained about the pub’s COVID-19 safety policies, because the employee’s complaints did not constitute “protected concerted activity,” as defined under the National Labor Relations Act (“NLRA”). The NLRA protects employees engaged in concerted activity, including participating in union activities and union organizing and other activities that the Board considers to be for their mutual aid and protection. Peter Sung Ohr, since his appointment as the NLRB’s Acting General Counsel following the discharge of his predecessor, Peter Robb, by President Joseph Biden, has taken a far broader view than his predecessors as to the types of subjects to which Section 7 of the NLRA’s protections apply. In the light of the COVID-19 pandemic, however, what constitutes concerted activity remains uncertain. The Advice Memorandum sheds light on how the Board may define concerted activity moving forward in the context of employee responses to COVID-19 workplace policies.

The Facts

While preparing to reopen, after temporarily closing for the pandemic, the owner of a pub in Illinois (“the Employer”) held a staff meeting during which a bartender (“the Employee”) complained about the Employer’s decision not to pay employees for certain time spent cleaning. In a subsequent text message exchange with a manager and another bartender, the Employee asked whether the Employer’s decision to not require employees to wear face coverings conflicted with the local government guidance.

After the pub reopened, the Employee continued to raise concerns to a supervisor regarding compliance with local COVID-19 ordinances and what the Employee claimed was the risk of allowing customers inside the pub rather than limiting their access to the outside patio. The Employee later informed their supervisor that they would only feel safe returning to work if the Employer changed its COVID-19 policies and limited patrons to the patio area. The Employer terminated the Employee, and told the Employee it was due to their unwillingness to return to work.

The Employee then filed an unfair labor practice charge with the NLRB’s Regional Office, which elevated the issue to the Division of Advice at the Office of the Board’s General Counsel to seek guidance on what the Regional Office saw as a novel question.

The General Counsel’s View

The Division of Advice concluded that the Employee’s complaints were not protected concerted activity because “there [was] no evidence [the Employee] discussed these concerns with other employees or otherwise involved them in [the Employee’s] efforts.”

The Division of Advice noted that while the Employee’s complaints regarding pay during the staff meeting “arguably constituted protected concerted activity,” it ultimately found no evidence that those complaints were the real reason for the Employee’s discharge. The Employee’s pay complaints “bore no relation to” the Employee’s later concerns regarding customers being allowed inside the pub.

The Division of Advice also concluded that the Employee’s text message exchange with a manager and another bartender regarding whether the Employer would require employees to wear face coverings while at work did not constitute concerted activity. In doing so, the Advice Memorandum explained that (i) the Employee only asked whether the Employer’s face covering policy conflicted with local guidance and did not complain to the manager, and (ii) the Employee had not engaged in any activities with the other bartender for their mutual aid or protection. Accordingly, the Division of Advice concluded that the evidence did not satisfy the NLRB’s Wright Line standard, which requires demonstrating that a causal connection exists between an adverse employment action and known employee activities that are protected by Section 7 of the NLRA. Thus, the Employer did not commit an unfair labor practice by discharging the Employee.

Potential Impact on Employers

The reasoning set forth in this Advice Memorandum suggests how the NLRB is likely to analyze employee complaints about workplace safety matters in the COVID-19 era and whether and in what circumstances such complaints may be held to constitute protected concerted activity under the NLRA. As we continue to navigate a return to on-site work by a greater number of employees, employers are likely to face increasing questions and complaints regarding COVID-19 safety policies and practices. Despite Acting General Counsel Ohr’s broader view of the types of employee conduct that are protected by Section 7 of the NLRA, employee questions and complaints regarding COVID-19 safety policies and practices are unlikely to constitute protected concerted activity unless the questions and complaints are intended to improve conditions of employment and occur in a group setting or on behalf of, or in concert with, other employees.

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Alexandria Adkins, a 2021 Summer Associate (not admitted to the practice of law) in the firm’s New York office, contributed to the preparation of this post.

On the Workforce Bulletin blog, I recently co-authored “New York Hero Act Amendments Passed and Sent to Governor for Signature” with my colleagues .

Employers with union represented employees should pay special attention to the provisions of the HERO Act that mandate a role for labor unions in the Workplace Safety Committees provided for in the Act.

Following is an excerpt:

As we previously reported, on May 5, 2021, New York Governor Andrew Cuomo signed the Health and Essential Rights Act (the “HERO Act” or “Act”) into law, permanently codifying COVID-19-related health and safety protocols. In a memorandum issued with the signing, Governor Cuomo announced that he had secured an agreement with the Legislature for amendments to the Act to address certain ambiguities and technicalities.

On May 14, 2021, State legislators introduced bills (S6768/A7477) (“Bills” or the “Amendments”) to address some of the Governor’s concerns. The Bills recently passed in both legislative houses. Governor Cuomo is expected to sign the Amendments into law shortly. …

Read the full post here.

Following on his promises to be “the most pro-union president you’ve ever seen,” President Joe Biden signed the Executive Order on Worker Organizing and Empowerment (“Executive Order”) on April 26, 2021, creating a task force whose purpose is to strengthen unions and make it easier for workers to unionize. Along with endorsing the Protecting the Rights to Organize Act in March, President Biden is affirmatively putting a heavy federal foot on the scale to empower unions and bolster declining union membership, both in the public and private sectors.

The Executive Order criticized the federal government for not having used its “full authority” to support unions and declared it necessary for the federal government to take a “comprehensive approach” to advancing union organizing and collective bargaining. Under these auspices, the Executive Order created the Task Force on Worker Organizing and Empowerment (“Task Force”), led by Vice President Kamala Harris and Secretary of Labor Marty Walsh, whose stated mission is to “mobilize the federal government’s policies, programs, and practices to empower workers to organize and successfully bargain with their employers.” The Task Force’s mission also includes determining ways to “increase worker power” in areas of the country with “hostile” labor laws and marginalized workers (including women and people of color) and in industries that are difficult to organize or that are changing.

The Task Force will make recommendations within 180 days and will then be responsible for implementing recommendations approved by President Biden.

In the Fact Sheet accompanying the Executive Order, the White House stated that it believes that declining union membership has contributed to widespread and deep economic inequality, stagnant real wages, the shrinking of America’s middle class, a weakened democracy, and the exacerbation of the pay gap for women and workers of color.

While it is too early to tell what changes to labor law will materialize from the Task Force’s recommendations, one thing is certain: President Biden’s administration is determined to make unions more powerful in the coming years than they have ever been in U.S. history. Employers should ready themselves.

On March 30, 2021, the Office of General Counsel of the National Labor Relation Board (“NLRB” or “Board”) released an Obama-era Advice Memorandum, originally prepared in 2016, opining that racially charged comments were protected concerted activity.  Just one day later, on March 31, 2021, Acting General Counsel Peter Sung Ohr affirmed in his latest Memorandum (“March 31st Memorandum”) his plan to pursue a broadening of employees’ protections under Section 7 of the National Labor Relations Act (“NLRA” or “Act”) beyond concerted activities relating to union activity and labor organizing, for example, by expanding the Board’s traditional view of protected concerted activity to protect employees’ political and social justice advocacy activities under Section 7.  These publications are a harbinger of the enforcement priorities of the General Counsel under the Biden administration.

The Established Section 7 Standard for Protected Concerted Activity

As background, Section 7 of the NLRA affords employees the right “to engage in [] concerted activities for the purpose of . . . mutual aid or protection.”  29 U.S.C. § 157.  Activity is held to be for “mutual aid or protection” (i.e., protected) if it is intended to improve conditions of employment, see Eastex, Inc. v. NLRB, 437 U.S. 556, 565-66 (1978), and it is “concerted” if it is intended to initiate, induce, or prepare for group action, see Meyers Indus., Inc., 281 NLRB 882, 887 (1986).  It is a violation of Section 8(a)(1) of the Act to discharge or otherwise take adverse action against employees for engaging in protected concerted activity—whether they are unionized or not and regardless of whether the activities are intended to seek union representation.

In the context of employee speech, an employee’s use of offensive language may be so “offensive, vulgar, defamatory, or opprobrious” as to render otherwise connected protected activity unprotected.  See Dreis & Krump Mfg., 221 NLRB 309, 315 (1975), enfd, 544 F.2d 320 (7th Cir. 1976).  But the Board has taken a narrow view of when such speech loses the Act’s protections, and has found, for example, workers who made explicit threats—laced with sexual and racial slurs—while picketing were still protected by Section 7.  See, e.g., Detroit Newspaper Agency, 342 NLRB 223, 267-68 (2004) (striker still protected despite using despicable racial and sexual epithets).  (However, as we discussed here, the Board recently made it easier to discharge employees for using offensive speech.)

Acting General Counsel Ohr’s March 31st Memorandum

Significantly, Acting General Counsel Ohr’s March 31st Memorandum broadly construes the ambit of Section 7, and states an intent to apply it in non-unionized workplaces and to employees’ discussions on topics such as workplace health and safety and racial discrimination, and employees’ political and social justice advocacy activities.  The March 31st Memorandum thus signals that the General Counsel—like the General Counsel under the Obama Board—will seek to expand Section 7’s contours, and not just in unionized workplaces.

Acting General Counsel Ohr distinguished decisions by the Trump-appointed NLRB majority that curtailed Section 7 rights and directed officers in the Board’s regional offices to effectuate the enlargement of Section 7’s scope by “vigorously” enforcing two Section 7 doctrines: (1) the right to engage in concerted activity for the purpose of mutual aid or protection, and (2) inherently concerted activity.

Acting General Counsel Ohr remarked that, “[g]oing forward, employee activity regarding a variety of societal issues will be reviewed to determine if those actions constitute mutual aid or protection under Section 7 of the Act” and provided the following examples of activities that constitute mutual aid or protection:

  • a hotel employee’s interview with a journalist about how earning the minimum wage affected her and employees like her, and how legislation to increase the minimum wage would affect them;
  • a “solo” strike by a lone pizza-shop employee to attend a convention and demonstration where she and others advocated for a $15-per-hour minimum wage; and
  • protests in response to a sudden crackdown on undocumented immigrants and the possible revival of workplace immigration raids.

Acting General Counsel Ohr ties together these scenarios and links them to Section 7 by explaining that they involve issues within the employer’s control, “like payment of wages and employers’ willingness to hire immigrants.” Based on this reasoning, employees’ interactions may be inherently concerted so long as the employees are engaging with each other to discuss or otherwise work toward improving their terms and conditions of employment, even if the interaction is a one-sided discussion involving only a speaker and listener.  He further clarified that group action is not a requirement for activity to be deemed concerted where an employee’s discussions of certain “vital” terms and conditions of employment are sufficient to render their interaction inherently concerted, even if other employees who are present during the conversation do not agree with the opinion or complaint or seek the same outcome.  Further, if an employee tells another employee about their thoughts on a political or social justice topic and that topic can be reasonably traced to workplace conditions, both employees have now potentially engaged in protected activity, regardless of whether the listening employee responds to or agrees with the comments made by the opining employee.  Arguably, almost any political or social justice topic may have a direct nexus to workplace conditions, and, moving forward, any conversation about such a topic may be considered protected concerted activity.

The Protection of Racially Charged Comments—Advice Memorandum

The Advice Memorandum, released on March 30, 2021, provides an example of this expanded view of protected Section 7 activities.  The Division of Advice (“Advice”) analyzed whether a nurse (“Charging Party”) was discharged by her employer for her “protected” Section 7 activity.  See SunBridge Healthcare LLC, Case 01-CA-156820, Advice Memorandum dated Jan. 20, 2016.  The Charging Party, who is Hispanic, worked as a certified nursing assistant.  The Charging Party believed that her employer treated Black employees more favorably than non-Black employees, and discussed this perceived unfair treatment with other employees who shared her concerns.

On one occasion, the Charging Party was unhappy that the Director of Nursing (“Director”) only approved a two-week vacation instead of the one-month vacation the Charging Party had requested.  After this conversation, the Charging Party proceeded to a patient’s room where she “said that perhaps the Director had denied her vacation because she wasn’t [B]lack.”  A nursing unit manager and two coworkers all claimed that they heard this comment.

Following this incident, one of her coworkers (“Coworker 1”) informed the Director that she overheard this comment and that earlier in the day, she had also heard the Charging Party say, “[T]hese freaking Africans, they lie about their parents being sick and they are granted four weeks off, and me I’m only asking to go for my wedding and I can’t get it.”  A few days later, the Director informed the Charging Party that someone had complained about her racially charged comments.  The Director, after conducting an investigation, gave the Charging Party a “written final warning” for “harassment of a coworker by making racial slurs.”

Two days later, the Charging Party was asked to work mandatory overtime, which she refused to do.  The Charging Party was suspended as a result.  During her suspension, Coworker 1 reported to the employer that after the Charging Party was issued the written warning for harassment, the Charging Party had refused to interact with Coworker 1 and was retaliating against her and intimidating her.  As a result, the employer discharged the Charging Party for “harassment and retaliation to a colleague.”

On these facts, Advice opined that the Charging Party’s termination was in violation of her Section 7 rights, and made three important findings, consistent with the tenets set forth in the Acting General Counsel’s March 31st Memorandum.

First, Advice opined that the Charging Party’s comment concerning the reason her leave request was denied was protected concerted activity.  According to Advice, the comment was protected because complaints about racial discrimination are a matter of mutual concern for employees, and it was concerted despite concerning her personal leave request, because it was a continuation of earlier discussions amongst employees about race discrimination in the workplace.

Second, and more significantly, Advice opined that discussions about racial discrimination in the workplace are inherently concerted.  Advice explained that the Board has long held that discussions about wages and job security are inherently concerted even absent a showing that group action was contemplated, since they are “vital” terms and conditions of employment and the “grist on which concerted activity feeds.”

In other words, complaints about racial discrimination, even if they only concern the complainer and the complainer does not intend to induce group action, will per se be considered concerted under the rationale Advice described.  Under Advice’s reasoning, then, all complaints of racial discrimination in the workplace would be deemed concerted under Section 7.

Third, Advice found that the employer discharged the Charging Party for engaging in protected activity (i.e., her complaint concerning the denial of her time-off request).  Advice found that the temporal proximity between the Charging Party’s complaint and her discharge, along with the employer’s knowledge of the Charging Party’s other complaints of discrimination, raised an inference that she was discharged for protected concerted activity.  In doing so, Advice stated that the Charging Party’s invidious racial stereotyping equating Africans with “liars” “was not so egregious as to lose the protection of the Act.”  Stated differently, because the Charging Party’s statement that the employer found to violate its harassment policy was connected with protected concerted activity (i.e., complaints about preferential treatment for Black employees), it could not justify adverse action without violating Section 7.

Advice’s third conclusion is troubling for employers and employees.  Title VII of the Civil Rights Act of 1964 (“Title VII”) requires employers to prevent workplace harassment based on “race, color, religion, sex or national origin” and to investigate reports of such harassment and to take prompt and effective remedial action.  See 42 U.S.C. § 2000e-2(a); 29 C.F.R. § 1604.11(d).  Local laws in many states and cities have even stricter requirements regarding preventing and addressing workplace harassment.  Employers that do not nip burgeoning harassment in the bud risk liability, including punitive damages.  See Faragher v. City of Boca Raton, 524 U.S. 775, 800 (1998).  They also risk incurring bad publicity that may tarnish their public image, damage business relationships, reduce profitability, and hinder their ability to attract talent.

Advice’s framework for evaluating and responding to harassing language in the workplace places employers in a catch-22 situation: discipline the employee for “not so egregious” harassment and risk violating the NLRA if the employee is otherwise engaging in protected activity, or turn a blind eye to the harassing behavior and be vulnerable to costly, and sometimes very public, harassment claims under Title VII.

This framework, coupled with the Acting General Counsel’s pledge to “vigorously” enforce Section 7 rights, may also portend an effort to resurrect Obama-era precedent that would further expand workers’ Section 7 rights at the expense of employers’ obligations under Title VII.  For example, in Banner Estrella Medical Center, 363 NLRB 1108 (2015), the Obama Board held that “an employer may restrict [discussions of discipline or ongoing disciplinary investigations] only where the employer shows that it has a legitimate and substantial business justification that outweighs employees’ Section 7 rights” to discuss such investigations.  Thus, an employer cannot rely on a blanket confidentiality policy to protect its workplace investigations but must conduct a case-by-case analysis to determine whether a specific investigation warrants confidentiality.  (As we discussed here, the Trump Board overruled Banner Estrella.)

This framework proved problematic for employers seeking to comply with their obligations under Title VII and similar laws.  The Equal Employment Opportunity Commission (“EEOC”) instructs employers that their “anti-harassment policy and complaint procedure should contain, at a minimum . . . [a]ssurance that the employer will protect the confidentiality of harassment complaints to the extent possible[.]”  The EEOC’s guidance is not just good investigatory practice; it tracks Supreme Court cases, which provide employers a defense to a harassment claim if, among other proactive matters, the employer implemented a reporting mechanism, prompt investigation, and adequate remedial measures to prevent future conduct.  See, e.g., Burlington Indus., Inc. v. Ellerth, 524 U.S. 742, 753 (1998).  Should the Board return to the Banner Estrella framework, this would thus place employers in another catch-22 situation: follow the EEOC’s guidance and risk violating workers’ Section 7 rights, or follow Banner Estrella and risk harassment liability.

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In his March 31st Memorandum, Acting General Counsel Ohr issued this warning to employers: “Going forward, under the framework of the law as presently articulated, cases involving retaliation against concerted employee conduct will be vigorously pursued, where these and other factors exist to tie workers’ protests to their interest as employees.”  Employers must heed this warning and tread carefully.  Before taking adverse action to remedy harassment or in regard to an employee’s political and social justice advocacy activities at or outside of the workplace, even if unrelated to an employees’ union and labor organizing activities, employers need to analyze whether the harassing speech or advocacy activities are now protected conduct under the General Counsel’s broadened interpretation of Section 7 rights.

Confidential arbitration agreements between employers and their employees are commonplace.  Employers favor such agreements for many reasons, including preserving privacy and allowing legitimate claims to be either settled or litigated based on their merits, rather than the threat of public embarrassment or high defense costs.  Employees, too, may value the confidentiality afforded by arbitration.  In contrast to private and confidential arbitration proceedings, public testimony and publicly filed court pleadings, motions, and briefs may contain unflattering or salacious allegations that are readily accessible to the public and may harm an employee’s future employment prospects and reputation.

Confidentiality provisions, however, potentially restrict employees’ freedom to discuss terms and conditions of employment.  Accordingly, in the past, the National Labor Relations Board (“Board” or “NLRB”) held that such provisions violated Section 7 of the National Labor Relations Act ( “NLRA”) because they prevented employees from discussing workplace matters.  See, e.g., Professional Janitorial Service of Houston, 363 NLRB No. 35 (2015).  Recently, though, the Board clarified that in light of recent U.S. Supreme Court and Board precedent, Section 7 no longer prohibits confidential arbitrations—at least for the time being.

In Dish Network, LLC, 370 NLRB No. 97 (2021), the Board analyzed broad confidentiality agreements that the employer required all applicants for employment to sign, which provided, in relevant part:

  1. “Employee and DISH agree that any claim, controversy and/or dispute between them, arising out of and/or in any way related to Employee’s application for employment, employment and/or termination of employment . . . shall be resolved by arbitration [under the Federal Arbitration Act].” (The “first clause.”)
  2. “[A]ll arbitration proceedings, including but not limited to hearings, discovery, settlements, and awards shall be confidential[.]” (The “second clause.”)

The Board initially determined that both these clauses were unlawful under Sections 7 and 8(a)(1) of the NLRA, see Dish Network, LLC, 365 NLRB No. 47 (2017), but it subsequently revisited these holdings in light of the Board’s decision in The Boeing Co., 365 NLRB No. 154 (2017), which overruled the “reasonably construe” standard in Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004).  (The Boeing case is discussed here.)

On remand, the Board analyzed whether the first clause interfered with employees’ Section 7 rights under Boeing, and held that it did because such language—requiring employees to arbitrate “any claim, controversy and/or dispute”—“makes arbitration the exclusive forum for resolving all employment-related disputes between the [employer] and any of its employees, including arising under the [NLRA.]”  Critically, there was no qualifying language expressly recognizing employees’ right to file claims or charges with the Board or, more generally, with administrative agencies.  As such, in the Board’s view, the first clause fell under Boeing Category 3 because it restricts “employees’ access to the Board [which] render[s] the [first clause] unlawful.”

With respect to the second clause, the Board partially reversed its earlier finding, and found that certain aspects were lawful under the NLRA.  Building on its decision in California Commerce Club, Inc., 369 NLRB No. 106 (2020), which held in light of the Supreme Court’s holding in Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612, 200 L. Ed. 2d 889 (2018) (“Epic Systems”) that confidentiality provisions in arbitration agreements were not per se unlawful under Section 7, the Board concluded that the second clause was lawful under Section 7 insofar as it required all arbitral “proceedings,” including hearings, discovery, and awards, to be kept confidential.  (The Epic Systems case is discussed here.)  In short, because these provisions were shielded by the Federal Arbitration Act (“FAA”), Section 7 could not be used to invalidate them.

The Board, however, found the requirement in the second clause that “settlements” remain confidential violated employees’ rights and was unlawful under Section 7.  According to the Board, the FAA is not implicated with respect to settlements—whether confidential or not—because “a settlement removes a dispute from arbitration or prevents it from going to arbitration in the first place.”  As such, the Board held that the legality of this provision was governed by Boeing, not Epic Systems.

Unshielded by the FAA, the Board found that the mere maintenance of this rule concerning settlements violated the NLRA.  The Board reasoned that the rule would operate to preclude disclosure of settlements involving disputes that arose under the NLRA and other disputes that concerned wages, hours, or other terms or conditions of employment.  “Accordingly, by prohibiting employees from disclosing the terms of any settlement, the Agreement explicitly restricts Section 7 activity.”

Chairman Lauren McFerran dissented in relevant part, and her dissent may prove a harbinger of the Board’s direction in the near future.  Chairman McFerran would have invalidated the entire second clause because it “interferes with employees’ core Section 7 right to discuss terms and conditions of employment with their co-workers,” and nothing in the second clause is shielded by the FAA.  According to Chairman McFerran, the Epic Systems Court found that the NLRA could not be read to implicitly prohibit class-action waivers because the individualized nature of arbitration is one of arbitration’s fundamental attributes, which the FAA explicitly protects. But, “[h]ere, the shoe is on the other foot”—Section 7 rights are dependent on employees’ right to communicate with one another, whereas the FAA is not dependent on confidentiality.  In other words, Chairman McFerran believes that with respect to confidentiality, it is the FAA that must yield to the NLRA, because confidentiality provisions squarely interfere with employees’ core Section 7 rights while they are not squarely protected by the FAA.

This, of course, is not self-evident.  As courts have recognized, “[t]he federal policy in favor of arbitration is promoted by permitting one of the principle advantages of arbitration—confidentiality—to be achieved.”  Glob. Reinsurance Corp.-U.S. Branch v. Argonaut Ins. Co., No. 07 CIV. 8196 (PKC) (S.D.N.Y. 2008).  Thus, just as proceeding individually is one of “arbitration’s fundamental attributes,” so too is confidentiality.

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Dish Network, LLC means that, at least for now, employers and employees may agree on conducting their dispute resolution on a confidential basis without violating the NLRA.  (State law and other laws may, however, limit the enforceability of these provisions.)  This should inure to the benefit of both.  Employers, therefore, should ensure that their confidentiality provisions are carefully drafted so as not to interfere with employees’ rights to file charges with administrative agencies, such as the NLRB.

But, with the Board set to flip again to Democrat control as current appointees’ terms expire, businesses wishing to utilize confidentiality provisions should account for the distinct possibility that the Board will overturn decisions like Dish Network, LLC, and once again take the position  that confidentiality provisions in arbitration agreements are per se unlawful under Section 7.

We will continue to monitor and provide developments on confidentiality under the NLRA and other notable NLRB decisions.

New York State now requires employers to grant employees paid time off for COVID-19 vaccinations. In my recent post with Susan Gross Sholinsky and Nancy Gunzenhauser Popper, “New York Issues FAQs on Paid Vaccination Leave Law,” we note that the law allows for limited waivers in collective bargaining agreements. While the law is vague, the State has now given some additional guidance in FAQ’s issued this week.

The following is an excerpt from the post:

As we recently reported, as of March 12, 2021, all private employers in New York must provide their employees with up to four hours of paid leave to get each COVID-19 vaccination shot. The State has now released guidance on the new law (“Law”) in the form of Frequently Asked Questions (“FAQs”). Most importantly, the FAQs clarify that the Law does not create any retroactive benefit rights to paid vaccination leave. Accordingly, while an employer is free to apply the law retroactively if it wishes, the Law mandates that “only employees receiving vaccinations on or after March 12, 2021 are eligible for paid leave.”

Click here to read the full post on the Workforce Bulletin blog.

As featured in #WorkforceWednesday:  This week on our special podcast series, Employers and the New Administration, we look at what President Biden’s support for unions throughout his political career might mean for labor management relations.

In this episode, Glenn Spencer, Senior Vice President of the Employment Policy Division at the U.S. Chamber of Commerce, and attorney Steve Swirsky discuss what employers can expect from the NLRB under the Biden administration. Attorney David Garland leads the conversation.

See below for the video edition and the extended audio podcast:

Video: YouTubeVimeo.

Extended Podcast: Apple PodcastsGoogle Podcasts,
OvercastSpotifyStitcher.

On Tuesday, the three-member, all Republican, National Labor Relations Board (the “Board”) issued a 3-0 decision in General Motors LLC and Charles Robinson, 369 NLRB No. 127 (July 21, 2020), reversing its longstanding standard for determining when employers violate the National Labor Relations Act (the “Act”) by disciplining employees who, while engaged in activity protected under Section 7 of the Act, use profanity-laced speech, as well as racial, ethnic or sexist slurs, or other abusive conduct toward or about management or other employees. Going forward, including to any unfair labor practice case currently pending, the Board will apply its familiar burden-shifting standard under Wright Line, pursuant to which a charging party must show through evidence that the employer would not have disciplined the employee but for his or her engaging in the protected activity, and the employer will not violate the Act where it shows the employee would have been disciplined because of the abusive speech or conduct regardless of any involvement in protected activity. The Board will no longer treat the engagement in the protected activity and the abusive conduct as being analytically inseparable. Nor will the Board any longer presume in such circumstances the issue of causation between the employee’s discipline and his or her involvement in protected activity. In so doing, the Board has brought the Act into the modern era so as to be consistent with current workplace standards of decorum and employers’ legal obligations under antidiscrimination laws. To those union leaders and employees who engage in abusive and offensive language or other conduct, similar to that old television dinosaur Archie Bunker, they may well reminisce about the old days when guys like them had it made and they were protected from discipline.

In framing its General Motors decision, the Board noted at the outset that it has been “repeatedly asked to determine whether employers have unlawfully discharged or otherwise disciplined employees who had engaged in abusive conduct in connection with activity protected by Section 7 of [the Act].” 369 NLRB No. 127, slip op at 1. As three such recent examples, the Board pointed to cases where employers discharged employees who had 1) “unleashed a barrage of profane ad hominem attacks against the owner … during a meeting in which the employee also raised concerted complaints about compensation;” 2) “posted on social media a profane ad hominem attack against a manager, where the posting also promoted voting for union representation;” and 3) “shouted racial slurs while picketing.” The General Motors Board noted that in deciding each of these prior cases under the old standard it had “assumed that the abusive conduct and the Section 7 activity are analytically inseparable.” Id. By so doing, the Board had “presumed a causal connection between the Section 7 activity and the discipline at issue, rendering the Wright Line standard – typically used to determine whether discipline was an unlawful response to protected conduct or lawfully based on reasons unrelated to protected conduct – inapplicable.” Id. In General Motors, the flaw the Board described in this approach is that it “has not taken into account employers’ arguments that the discipline at issue was motivated solely by the abusive form or manner of the Section 7 activity or that the employer would have issued the same discipline for the abusive conduct even in the absence of the Section 7 activity.” Id. at 1, 10. This has caused employers at times to be faced with standards under the Act that “conflicted alarmingly with employers’ obligations under federal, state and local antidiscrimination laws,” which may require employers to take prompt corrective action to prevent hostile work environments. Id. at 1, 6-7.

Under the Board’s prior precedent, an employer violated the Act “by disciplining an employee based on abusive conduct ‘that is part of the res gestae’ of Section 7 activity, unless evidence shows that the abusive conduct was severe enough to lose the employee the Act’s protection.” Id. at 4 (quoting Stanford Hotel, 344, NLRB 558, 558 (2005). As the Board explained, “[t]his precedent was based on the view that ‘employees are permitted some leeway for impulsive behavior when engaged in concerted activity,’ and the accommodation of such behavior is ‘balanced against an employer’s right to maintain order and respect.’ ” Id. (quoting Daimler Chrysler Corp., 344 NLRB 1324, 1329 (2005)).  To determine whether conduct “is severe enough to lose protection” the Board had applied differing setting-specific standards, each depending on the context of the Section 7 activity. Id. In ascending order of employee leeway permitted by the Board in these settings were workplace discussions with management, social media posts and other conversations among employees, and picket line conduct. Id.

For workplace discussions with management, the Board had applied the four-factor standard under its decision in Atlantic Steel, 245 NLRB 814 (1979), which considers “(1) the place of the discussion; (2) the subject matter of the discussion; (3) the nature of the employee’s outburst; and (4) whether the outburst was, in any way, provoked by an employer’s unfair labor practice.” Id. (quoting Atlantic Steel, 245 NRLB at 816). The General Motors Board noted that application of the Atlantic Steel factors over the years has “produced inconsistent outcomes,” and so has failed to provide employers with clear guidance. Id. at 4-5. Similarly, for social media posts and coworker discussions the Board has previously applied a totality of the circumstances approach, which the General Motors Board found “promises to create the same, if not more, inconsistency and unpredictability.” Id. at 6. Finally, in cases involving picket line conduct the Board has previously applied its standard under Clear Pine Mouldings, Inc., 268 NLRB 1044, 1046 (1984), which the cases applying the same “have found picket-line misconduct to lose the protection of the Act only where it involves an overt or implied threat or where there is a reasonable likelihood of an imminent physical confrontation.” Id.

Rejecting the prior setting-specific standards approach described above, the Board in General Motors announced a move to its longstanding Wright Line standard “for deciding cases where employees engage in abusive conduct in connection with Section 7 activity, and the employer asserts it issued discipline because of the abusive conduct.” Id. at 7. In announcing this move, the Board observed that “[a]bsent evidence of discrimination against Section 7 activity, we fail to see the merit of finding violations of federal labor law against employers that act in good faith to maintain civil, inclusive, and healthy workplaces for their employees.” Id. at 8. The Board went on to note that “[w]e read nothing in the Act as intending any protection for abusive conduct from nondiscriminatory discipline, and, accordingly, we will not continue the misconception that abusive conduct must necessarily be tolerated for Section 7 rights to be meaningful.” Id. Continuing, the Board stated “American workers engage in these activities every day without resorting to abuse, and nothing in the text of Section 7 suggests that abusive conduct is an inherent part of the activities that Section 7 protects or that employees who choose to engage in abusive conduct in the course of such activities must be shielded from nondiscriminatory discipline.” Id. Rather, the Board held that:

Abusive speech and conduct (e.g., profane ad hominem attack or racial slur) is not protected by the Act and is differentiable from speech and conduct that is protected by Section 7 (e.g., articulating a concerted grievance or patrolling a picket line). Accordingly, if the General Counsel fails to show that protected speech or conduct was a motivating factor in an employer’s decision to impose discipline, or if the General Counsel makes that showing but the employer shows that it would have issued the same discipline for the unprotected, abusive speech or conduct even in the absence of Section 7 activity, the employer appears to us to be well within its rights reserved by Congress.

Id. at 8-9.

Applying this rationale, the General Motors Board found that its longstanding Wright Line burden-shifting framework is the right one, regardless of the setting involved, as it “allows the Board to protect Section 7 activity without erroneously extending the Act’s protection to abusive conduct.” Id. at 9. Under Wright Line, the General Counsel must initially show (in any setting) that (1) the employee engaged in Section 7 activity, (2) the employer knew of that activity, and (3) the employer had animus against the Section 7 activity, which must be proven with evidence sufficient to establish a causal relationship between the discipline and the Section 7 activity.” Id. at 10.  Such evidence of a causal relationship is “probative of unlawful motivation only if it adds support to a reasonable inference that the employee’s Section 7 activity was a motivating factor in the employer’s decision to impose discipline.” Id. If the General Counsel meets this initial burden, the employer must “meet its defense burden to prove that it would have taken the action even in the absence of the Section 7 activity,” which defense will fail if the evidence in total “establishes that the reasons given for the employer’s action are pretextual – that is, either false or not in fact relied upon.” Id. (internal quotation omitted).

This “realignment” of standards “honors the employer’s right to maintain order and respect,” while avoiding potential conflicts with antidiscrimination laws, such that “the Board will no longer stand in the way of employer’s legal obligation to take prompt and appropriate corrective action to avoid a hostile work environment on the basis of protected characteristics.” Id. Employers should be cognizant that it remains unlawful to target employees who engage in Section 7 activity for discipline that would not have occurred “but for that protected activity.” However, under the Board’s General Motors decision “employees who engage in abusive conduct in the course of Section 7 activity will not receive greater protection from discipline than other employees who engage in abusive conduct.” Id.

Moreover, the Board determined that application of its Wright Line standard shall apply retroactively to cases where employees engaged in abusive conduct in the course of protected Section 7 activity. In so holding the Board concluded that any “ill effects” of applying its General Motors decision retroactively “to all pending cases in whatever stage” are “outweighed by the potential harm of producing results contrary to the Act’s principles and potentially at odds with antidiscrimination law.” Id. at 11. Specifically, the Board found that continuing to find employers violated the Act in pending cases through the application of the now overruled standards, “where employers were simply exercising their right to maintain a civil, safe, nondiscriminatory workplace for their employees would the greater injustice.” Id.

Applying the Wright Line standard to the underlying facts and allegations in the General Motors case, the Board remanded the case to the to the Administrative Law Judge to reopen the record and take evidence relevant to the Wright Line standard. The underlying facts involved suspensions of a union committeeman for profanity-laced rants in the course of protected Section 7 discussions with management. However, under the old Atlantic Steel standard, the General Counsel had not introduced evidence that the employer had any animus against the Section 7 activity (as opposed to only the abusive conduct), and the employer had not been allowed to introduce evidence “now relevant [as] to whether the [it] would have suspended [the employee] for his abusive conduct even in the absence of Section 7 activity.” Id.

The key takeaway for employers is the availability of a new defense in cases involving profane or offensive language or other abusive conduct by employees in the course of engaging in otherwise protected concerted /union activity (whether made in the course of grievance or investigative meetings, bargaining meetings, social media posts, or on a picket line, etc.).  This new defense in these circumstances allows an employer to discipline an employee for abusive conduct without violating the Act only to the same extent the employer would have disciplined any other employee for the same or comparable abusive conduct, such that the employer can demonstrate the discipline was not discriminatorily motivated by the employee’s involvement in the protected Section 7 activity.  The availability of this Wright Line defense in these circumstances is significant, however, employers should still be careful to assess whether they can make the required evidentiary showing and be mindful that sloppy or inconsistent discipline practices with respect to profane speech in the workplace, for example, may still result in a finding that discipline was unlawfully motivated by an employee’s involvement in protected activity. Also, depending on what happens in the November election, the current make-up of the GOP controlled Board could begin to change in 2021, and while it is not clear whether a Democratically controlled Board would look to roll the standard all the way back to that existing before the General Motors decision, one could certainly expect at least some moderation of the standard. For example, there could be some moderation where the issues involve the use of profanity but do not involve conduct potentially creating a hostile work environment along the lines of a protected characteristic so as to potentially conflict with the employer’s obligations under antidiscrimination laws. In light of the nuances and complexities that can come up in determining whether underlying activity is protected under the Act, and whether the employer can likely make the required showing of nondiscriminatory discipline motivated by unprotected abusive conduct, employers should continue to consult with labor counsel and labor relations professionals regarding disciplinary decisions in this area.