New NLRB General Counsel Signals Enforcement Changes

The United States Senate confirmed Peter Robb as the new General Counsel to the National Labor Relations Board on November 8, 2017. On December 1, 2017, Mr. Robb issued a memorandum to the NLRB regional offices that required those contemplating enforcement actions to seek advice before proceeding. The categories for which advice must be sought are (1) cases over the last eight years that overruled precedent and involved one or more dissents on the Board, (2) cases involving issues that the Board has not decided, and (3) other cases that region officials believe will be of importance to the General Counsel. The requirement that enforcement authorities seek advice in such cases suggests that the General Counsel may be contemplating a change in enforcement policy on those issues.

The memorandum identified several examples of the kinds of issues that would require seeking advice, among them the following:

Inappropriate Social Media Postings. In Pier Sixty, LLC, 362 N.RB No. 59 (Mar. 31, 2015), the Board ruled that a catering service company unlawfully discharged an employee for posting a vulgarity-filled comment to Facebook about a member of management, knowing that his coworkers who were Facebook friends would be able to read the comment. The posting, although its language was "distasteful," constituted concerted activity protected under section 8 of the National Labor Relations Act.

Employee Handbook Conduct Provisions. In Casino San Pablo, 361 NLRB No. 148 (Dec. 16, 2014), the Board ruled that a handbook rule barring "disrespectful conduct" was too broad, and could be interpreted by employees in a manner that would discourage them from exercising their rights under section 7 of the National Labor Relations Act to engage in collective activity.

Joint Employer Status. In Browning-Ferris Industries of California, Inc., 362 NRLB No. 186 (Aug. 27, 2015), the Board revised its standard for determining whether an employer had joint employer status. It ruled that it would find two or more entities to be joint employers if they are both employers within the meaning of the common law, and if they share or codetermine matters governing the essential terms and conditions of employment. In that case BFI relied on workers supplied by an independent company to sort streams of material into categories at BFI's recycling plant. Because BFI had control over who the independent company could hire, barred the company from paying its workers more than BFI paid its employees for comparable work, and provided some day-to-day supervision of the independent company's workers, it was deemed a joint employer. In a notable application of this standard, several NLRB regions have brought complaints against McDonald's, alleging that it is a joint employer with its independent franchisees. Read the NLRB press release on the complaints against McDonald's.

Update: On December 14, 2017, the Board overturned the Browning-Ferris standard in Hy-Brand Industrial Contractors, Ltd and Brandt Construction, Co., 365 NLRB No. 156. Two new appointees to the Board joined one of the Browning-Ferris dissenters to announce a "return" to the joint liability principles applied before Browning-Ferris, which the decision described as "requir[ing] direct control over one or more essential terms and conditions of employment to constitute an entity the joint employer of another entity’s employees."

Other examples are provided in the full text of the memorandum, which is available here on the NLRB website.

Are Franchisors Joint Employers With Their Franchisees

The recent announcement by the NLRB's Office of the General Counsel that it has authorized complaints against McDonald's USA for NLRA violations allegedly committed at franchised restaurants raises the general issue of potential franchisor liability for labor and employment violations by their franchisees. Reported decisions on the subject are scarce. In two cases decided over 45 years ago, the NLRB refused to find that a franchisor was a joint employer. Speedee 7-Eleven, 170 N.L.R.B. 1332 (1968) and S.G. Tilden, Inc., 172 N.L.R.B. 752 (1968). If any of the current complaints proceed to adjudication, the NLRB, and then the federal courts, will determine whether the NLRA's definition of employer includes franchisors.

The issue has arisen under other laws. For example, the California Supreme Court has under review a Court of Appeal decision holding that Domino's could be held liable for sexual harassment by one of its franchisee's employees. The case was argued in June 2014. For a discussion of the decision rejecting liability, see this blogpost.

Employees have also sought to hold franchisors liable for wage and hour violations by franchisees. For example, earlier this year, class action lawyers in California, New York and Michigan filed lawsuits claiming that McDonald's was responsible for wage and hour violations by its franchisees.

For a newspaper columnist's view on the issue, see the LA Times Michael Hiltzik's column "The NLRB-McDonald's ruling could be the beginning of a franchise war."

Why Does the NLRB Get Involved in Non-Union Workplaces?

Although the National Labor Relations Board spends much of its time dealing with union vs. management issues, recent publicity about its rulings on social media in the workplace have reminded us that its jurisdiction extends into non-union environments. This post explains the source and contours of that jurisdiction.

The NLRB exercises jurisdiction over all private employers who participate in a minimum level of interstate commerce, except those who employ only agricultural laborers. The Board's Jurisdictional Standards page explains the standards. The National Labor Relations Act excludes all government employees from the Board's jurisdiction.

Section 7 of the NLRA (29 U.S.C. section 157) protects employees' right "to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection."The right extends to those who are not union members and to workplaces with no union presence. To be protected under Section 7, the activity (1) must involve two or more employees acting together or a single employee acting on behalf of others (2) must benefit employees as a group and not just amount to a personal grievance, and (3) must not be malicious, reckless or otherwise unlawful. The NLRB finds the right important enough that it launched a website in June 2012 that is specifically devoted to the protection of concerted activity.

Here are some of the ways in which Section 7 has been held to protect employees from adverse action by their employers:

Social Media. Several decisions have taken employers to task for disciplining or firing employees based on comments posted on Facebook and other social media. The Board's General Counsel issued a report in May 2012 that distilled the state of the law in this area. The most recent Board decision on the subject found that a Chicago car dealer did not violate Section 7 rights when it fired a sales person for posting photos on his Facebook page because the action was not concerted. Karl Knauz Motors, Inc., Case 13–CA–046452 (Sep. 28, 2012).

Wage Discussions. Section 7 gives employees the right to discuss their wages and other terms and conditions of employment. Confidentiality policies that prohibit employees from disclosing such information are not permitted. For an example of a confidentiality policy that drew NLRB enforcement action, see Northeastern Land Services, Ltd., 560 F.3d 36 (1st Cir. (2009).

Civility Policies. A policy that bars employees from treating each other in an uncivil manner may chill Section 7 rights. For example, in KSL Claremont Resort, Inc., 344 N.L.R.B. No. 105 (2005), the Board held that a policy prohibiting "negative conversations" about associates or managers was unlawful, because employees could reasonably construe the policy to bar them from discussing with their coworkers complaints about their managers that affect working conditions, thereby causing employees to refrain from engaging in protected activities.

The Employee-Facebook Privilege

American Medical Response of Connecticut earned notoriety when the NLRB charged it with an unfair labor practice for having fired an employee who posted negative remarks about her supervisor on her personal Facebook page in October 2010. She had posted the remarks after being denied union representation for an interaction with her supervisor. The posting drew supportive responses from co-workers, which prompted the employee to post additional negative remarks. The NLRB charged that the Facebook postings were protected concerted activity under section 7 of the National Labor Relations Act (29 U.S.C. sec. 157). Concerted activity is protected in both union and nonunion environments. The company settled the case on February 7, 2011, by agreeing to revise its social media policy to allow communications protected by section 7, and to post a notice to its employees advising them of their right to engage in concerted activity. All employers should review their policies and practices to make sure that they do not discipline employees for communications on social media that may be protected by section 7.

The NLRB action does not mean that employers are prohibited from restricting access to social media in the workplace. They have a legitimate interest in preventing distractions and the infection of the workplace with inappropriate content. Indeed, employers who do not limit inappropriate use of social media may themselves face liability to third parties. In Yath v. Fairview Cedar Ridge Clinic, 767 N.W.2d 34 (Minn Ct. App. 2009), a patient sued the clinic after her personal medical information appeared on Myspace.com. The fact that the clinic had blocked access to Myspace from its computers helped in its defense. Even so, the Minnesota court allowed one cause of action to proceed to trial. A New Jersey employer was denied summary judgment against a claim by the wife of an employee who claimed that her husband posted naked pictures of their daughter from a computer at work. Doe v. XYC Corp., 887 A.2d 1156 (N.J.Super.A.D. 2005).

UPDATE (September 29, 2011)

In July 2011, the NLRB Office of the General Counsel issued three advice memos that discuss the application of the concerted activity concept to social media:

• JT's Porch Saloon & Eatery, Ltd. (Case 13-CA-46689). A bar did not violate the NLRA when it fired a bartender for responding to a Facebook inquiry from his step-sister with a rant about the bar's policy that waitresses do not share tips with bartenders, his lack of a raise, and the bar's customers. He did not engage in concerted activity because there was no evidence of a discussion with his fellow employees.
• Martin House (Case 34-CA-12950). A residential facility for homeless people did not violate the NLRA when it fired a recovery specialist for making fun of clients on Facebook. She was not a Facebook friend to any of her co-workers. She was merely communicating with her personal friends about what was happening on her shift.
• Wal-Mart (Case 17-CA-25030). Wal-Mart did not violate the NLRA when it fired a customer service employee for complaining on Facebook that there was tyranny at his store and that his assistant manager was a "super mega puta." Although most of the employee's Facebook friends were coworkers, he was just expressing an individual gripe. He did not call for group action. None of the coworkers who responded referred to group action.

UPDATE (September 30, 2011)

On August 18, 2011, the NLRB Office of the General Counsel published a report on recent social media cases, which explores the legal principles in greater depth. Read the report.

UPDATE (October 4, 2011)

On September 28, 2011, an administrative law judge recommended dismissal of a complaint that the owner of a BMW car dealership violated a salesperson's rights when it fired him for posting negative comments on his Facebook page. Karl Knauz Motors, Inc., Case No. 13-CA-46452. Some negative comments were directed at what the complainant considered a shoddy sales event at the BMW dealership where he worked. He believed the event would reduce commissions for the sales force because it presented a poor image. The other comments made fun of an accident at an adjacent Land Rover dealership, also owned by his employer. The comments about the BMW sales event were protected concerted activities, but the comments about the accident were not. Because the evidence established that the employee was fired because of the comments about the accident, there was no violation.