LaborSphere, Author at Laborsphere

Board Reverses 34-year Rule and Requires Employers to Give Unions Actual Witness Statements

Since 1978, the National Labor Relations Board has allowed employers to refuse to provide unions with copies of witness statements obtained during an investigation of employee misconduct. In Anheuser-Busch, 237 NLRB 982 (1978), the Board agreed with a U.S. Supreme Court ruling that disclosure of witness statements to a union would create a risk of coercion and intimidation and could well cause witnesses to be reluctant to provide truthful statements or participate in Board investigations. Recognizing that a union may have a legitimate need for information related to the investigation, the Board required employers to provide summaries of the witness statements to the union. This requirement balanced the confidentiality rights of the employees providing the statements with the union’s interest in relevant information.

The Board has rejected this “bright-line” rule and replaced it with a “balancing test” to decide when and under what circumstances an employer must give the union actual witness statements. Under this new approach, articulated in American Baptist Homes of the West, d/b/a Piedmont Gardens, 359 NLRB No. 46 (2012), employers must produce witness statements to a union upon request unless the employer can prove its confidentiality interest outweighs the union’s need for the information.

In Piedmont Gardens, the employer operated a continuing care facility that offered independent living, assisted living and skilled nursing care level options to its residents. In June 2011, a charge nurse informed the Human Resources Director that she had seen two certified nursing assistants sleeping on the job. The HR Director asked the charge nurse to prepare a written statement and assured her it would be kept confidential. Another charge nurse who witnessed the sleeping employees prepared a written statement after learning that her fellow charge nurse had done so, but without an assurance of confidentiality. Based on the witness statements, one of the sleeping employees was terminated.

The union requested all written statements relied on in making the termination decision and the names and job titles of everyone who was involved in the investigation. The employer refused to provide any of the requested information, but it offered to work with the union to reach an “accommodation to disclosure.” No information was provided to the union, and it filed an unfair labor practice charge.

The Board majority held that the employer was required to provide the witnesses’ names and job titles, along with the witness statement from the charge nurse who was not assured of confidentiality. However, the Board stated it would not apply its new standard in this case because it would cause a “manifest injustice” to the employer who was guided by the Anheuser-Busch standard. Thus, the employer did not have to provide the witness statements of employees who were told their statements would remain confidential.

The discarded Anheuser-Busch standard provided employers and unions certainty about their respective rights and obligations regarding disclosure of witness statements given during an employer’s investigation of possible wrongdoing. The new standard eviscerates certainty and creates a standard that is vague, subjective and outcomes will be unpredictable because each situation will be based on its unique and nuanced facts. As noted by dissenting Board Member Hayes, the new standard “will often put human relations officials…in the position of making a legal assessment whether their employer’s confidentiality interests are legitimate, substantial, and superior to the interest of the union requesting witness statements.”

This ruling follows another recent Board decision that ruled employers can no longer, as a matter of human resource practice or policy, require employees to maintain confidentiality of investigatory interviews. Banner Health System, d/b/a Banner Estrella Medical Center, 358 NLRB No. 93 (2012). Unionized employers now must consider when and how they can give confidentiality assurances to employees who provide witness statements and under what parameters the employer’s confidentiality interests are more important than the union’s right to obtain witness statements. Employers should analyze their investigatory practices and policies in light of these two rulings.

The likely real-world implications for unionized employers is that unions will demand witness statements with regularity and, if the employer refuses, file unfair labor practice charges. More frequent involvement of legal counsel may well be necessary because of the vague and fact-specific balancing act employers are now required to make.

Facebook Firings – An Old Approach to the New Issue of the Virtual Water Cooler

The National Labor Relations Board (“Board”) issued its second decision on a firing over Facebook posts on Wednesday, December 19, 2012. The Board, avowing its commitment to the idea that speech on a personal, non-work-related social media outlet should be treated the same way as discussions on work premises, ordered a non-profit organization to reinstate five employees who were fired over Facebook posts. In a 3-1 decision in Hispanics United of Buffalo, Inc., 359 NLRB No. 37, 12/14/12 [released 12/19/12], the Board affirmed the administrative law judge’s ruling that the employer violated the National Labor Relations Act (“NLRA”) when it terminated five employees for posting Facebook comments in response to a co-worker’s criticism of their job performance.

While noting that at issue was a novel mode of employee communication, the Board agreed with the ALJ that the appropriate analytical framework for resolving the discharge dispute had long been settled under Meyers Industries and its progeny.[1] Under the Meyers Industries analysis, an employee’s discipline or discharge is unlawful if it is motivated by an employee’s concerted, NLRA-protected activity and if the employer knows the activity was concerted. The underlying ALJ ruling in Ortiz v. Hispanics United of Buffalo, Inc., Case No. 3-CA-27872 (NLRB Sept. 2, 2011) issued a landmark decision when it marked the first time a Board judge had ruled on a social media-related employment decision.

Member Brian E. Hayes, the sole dissenter and Republican board member, disagreed with the majority view that the employees’ comments were made for mutual aid and protection. However, writing shortly before his term on the board ended Dec. 16, he agreed that the Meyers Industries framework was the right analysis to use for evaluating whether the activity on Facebook is protected and concerted. In light of this decision, it is clear that concerted activity is protected whether spoken in the workplace or via the virtual water cooler. Even with the difference in type and style of communication used in social media outlets, the Board is not adopting any new rules or framework within which to evaluate the speech.

Additionally, this decision serves as a warning to employers who have been using their policies to justify adverse employment actions when faced with potentially protected activity. The Board majority in this case rejected the employer’s defense that these five employees had violated its zero-tolerance policy on bullying and harassment when they disagreed with another co-worker that the company was not doing enough to help its clients. The Board held that the employees were taking a first step toward group action to defend themselves against another co-worker’s accusations made to management and hence, was protected, concerted activity. Employers who seek to discipline an employee for comments he or she makes on social media sources must therefore not merely rely on their policy, but they must also ensure that their policy is valid in that, among other things, it does not discourage protected, concerted activity.

[1] Meyers Industries, 268 NLRB 493 (1983), remanded sub nom. Prill v. NLRB, 755 F.2d 941 (D.C. Cir. 1985), cert denied 474 U.S. 948 (1985), supplemented 281 NLRB 882 (1986), affd. sub nom. Prill v. NLRB, 835 F.2d 1481 (D.C. Cir. 1987), cert. denied 487 U.S. 1205 (1988).

Court of Appeals Refuses to Enforce NLRB Ban on Offensive Employee Clothing

Many employers have dress codes that regulate what employees can wear, particularly employees who have contact with customers, clients, patients and business partners, in order to convey the organization’s image, brand, values and mission. The National Labor Relations Board issued a decision striking down an employer’s discipline of an employee for wearing a t-shirt that ridiculed its employee recognition program. On appeal, the U.S. Court of Appeals for the D.C. Circuit took the Board to task for its ruling. According to the Court, the Board held this employer to a higher standard than it imposed on employers in the past and the Board provided no justification for the new standard. Medco Health Solutions of Las Vegas, Inc., v. NLRB, No. 11-1282 (D.C. Cir. Dec. 14, 2012)

To encourage excellent performance by employees, the employer introduced an employee recognition program—the WOW program. The program did not offer monetary rewards nor did they influence promotions or wage increases. The employer believed the program showed its commitment to excellence, and customers were regularly shown the wall of recognition when they came to the employer’s facility.

One day an employee wore a t-shirt to work that had the union logo on the front and on the back it read: “I don’t need a WOW to do my job.” That same day representatives of a customer were scheduled to tour the facility and the employee was instructed to remove the “insulting” t-shirt. The employee was told that if he did not feel he could support the WOW program, “there are plenty of jobs out there.” The employee changed shirts before the customers arrived, and he did not wear the t-shirt again.

The union filed an unfair labor practice charge alleging that the employer’s dress code policy was too broad and that instructing the employee not to wear the t-shirt violated the National Labor Relations Act.

The Board ruled that the employee had the right to wear the t-shirt and the employer’s ban on “phrases, words, statements, pictures, cartoons or drawings that are confrontational, slanderous, insulting or provocative” was too broad and interfered with employee rights to engage in protected concerted activity, which includes the right to criticize work rules and working conditions.

The Court of Appeals disagreed. The Court was troubled by the fact that in the past the Board upheld discipline of union employees at a grocery store for wearing shirts that read “Don’t Cheat About the Meat!” or bagel shop employees’ shirts that stated “If its not Union, its not Kosher.” (grammatical error was in the slogan). In neither case did the employer provide, nor did the Board require, evidence that the slogan “reasonably raised the genuine possibility of harm to the customer relationship.” In the Court’s view, the Board failed to offer any explanation as to why the slogan about the WOW program was different from these other two cases.

The Court noted that Board decisions are entitled to deference and that the Board has a “fund of knowledge and expertise all its own.” But the Court further observed that “this expertise is surely not at its peak in the realm of employer-customer relations.” In chastising the Board for its ban on “provocative and confrontational” slogans worn by an employee in a workplace visited by customers, the Court stated that “such expressions are seldom found in civil and decent places of employment.” The Court sent the case back to the Board to reconsider its ruling in light of the flaws cited by the Court.

On remand, the Board may be able to explain to the Court’s satisfaction why it has ignored its own prior rulings on provocative and confrontational anti-employer statements on clothing worn at work. The Court’s opinion conveys skepticism that the Board will be able to do so. In the meantime, employers should recognize that the Board is likely to continue to substantially limit an employer’s ability to prohibit employees from wearing clothing to work with provocative or confrontational messages that could harm customer or client relationships.

FTC Approves Settlement of Noncompetition Case Against Renown Health Voiding Ten Physicians’ Noncompetition Agreements

On November 30, 2012, the Federal Trade Commission voted 5-0 to approve the settlement of a complaint it filed against Renown Health on August 3, 2012. A settlement was promptly reached between the FTC and Renown Health avoiding the unwinding of two acquisitions made by Renown Health of two independent local cardiology groups.

The complaint alleged that Renown Health’s acquisition of competitor cardiology groups in Reno, Nevada, Sierra Nevada Cardiology Associates, Inc. (“NCA”) and Reno Heart Physicians, Inc. (“RHP”), and the employment of the 32 physicians employed by these entities, “is likely to lead to anticompetitive effects including increased prices and reduced non-price competition.” The acquisitions resulted in Renown Health employing approximately 97% of the cardiologists serving private patients in the Reno area. The FTC complaint focused on the fact that all of the employed physicians were subject to employment agreements containing noncompetition and non-solicitation provisions prohibiting them from practicing medicine or soliciting former patients for two years in the Reno area after termination of their employment. As a result of the noncompetition and non-solicitation agreements, competition for cardiology services would have to come from without, which the complaint alleged to be unlikely because of certain barriers to market entry. The State of Nevada, through its attorney general, worked with the FTC in investigating and resolving the matter. The Nevada AG filed a similar complaint and entered into an agreement with Renown Health similar to the FTC consent decree.

The parties reached a settlement this fall through an agreed consent decree that would avoid having to unravel the mergers. The FTC has now approved the consent decree under which Renown Health released up to ten cardiologists previously employed by NCA or RHP from their noncompetition and non-solicitation restrictions.

This result signals a cautionary note for those hospitals and health care systems with an overly large market share in a geographical market who seek to further expand their employed physicians in a given practice area. In this case, the 88% market share for the cardiologists was a daunting statistic for Renown Health to overcome. Going forward, this is just one more potential road block that health care providers must consider before acquiring additional physician practices and increasing its employed physician roles.

Deconstructing Costco

Much has been written about the NLRB’s recent holding in the seminal Costco case that the company’s facially neutral social media policy prohibiting postings on the Internet that damage the Company or any person’s reputation violates Section 8(a)(1) of the Act. But it is also important to understand how the Board came to decide that case in order to better evaluate the appropriate employer response.

The controlling law concerning the validity of facially neutral work rules was established in the 2004 decision in Lutheran Heritage Village in which the Board held that in evaluating such rules it must determine whether employees “would reasonably construe” the language as restricting their Section 7 to engage in protected discussions of their terms and conditions of employment, and recognized that the mere fact that a rule could be read as inhibiting employee rights is insufficient to support a finding that the rule is unlawful. The Board also observed that it should apply a “reasonable” interpretation to such rules without “reading particular phrases in isolation” and without assuming the employer intended to interfere with protected rights.

When the Costco case was tried before an Administrative Law Judge in 2010, the Acting General Counsel charged the employer with violating Section 8(a)(1) with respect to a number of provisions in its Electronic Communications and Technology Policy, including the requirement that employees use “appropriate business decorum” on social media sites and the prohibition of postings that “damage” the company or anyone’s reputation, because there was no limiting disclaimer to advise the employees that the rule was not intended to restrict their protected rights. In this respect, the Acting General Counsel argued that the ALJ should reject the Lutheran Heritage Village “would reasonably construe” standard and apply instead the standard from the dissenting opinion in that case by former Members Liebman and Walsh – that an ambiguous rule that does not include a disclaimer is unlawful if it could be perceived as inhibiting Section 7 rights – because the dissenting opinion would likely be accepted by the majority of the newly composed Board. The ALJ rightly rejected that proposition, and specifically recognized that under the controlling Lutheran Heritage Village standard the Board “will not conclude that a reasonable employee would read the rule to [prohibit protected] activity simply because the rule could be interpreted that way . . . [or] could conceivably be read to” encompass protected conduct. The ALJ then determined that neither Costco rule was unlawful under the applicable “would reasonably construe” standard because reasonable employees would understand that the rules were intended to promote civility rather than restrict Section 7 activity.

In its decision on appeal, the newly composed Board majority adopted the ALJ’s reasoning that Costco’s “appropriate business decorum” rule was lawful, but found the rule prohibiting comments damaging to the company to be unlawful. In so finding, the Board purports to recognize the continued validity of Lutheran Heritage Village, and gives lip service to the “would reasonably construe” standard, but tacitly applied the “could be read” standard advocated by the Acting General Counsel. In this regard, the Board adopted the approach of the Liebman-Walsh dissent by holding that in the absence of a limiting disclaimer the rule “allows employees to reasonably assume that it pertains to” protected comments critical of the company’s management. It is significant that the Board did not engage in any analysis to determine whether the company’s employees “would reasonably construe” the language of the rule as restricting or prohibiting protected communications, but held the rule to be unlawful only because employees could assume it would in the absence of a limiting disclosure.

The Board has applied the “could be” read standard in two more recent cases. First, in Flex Frac Logistics, LLC, the Board specifically referred to ambiguous work rules as “rules that reasonably could be read to” inhibit Section 7 rights. Then in Karl Knauz Motors, Inc., the Board rejected the employer’s Courtesy Rule, which required employees to be courteous in their interactions with customers and coworkers, because it also prohibited employees from being disrespectful or using profanity. Again giving lip service to Lutheran Heritage Village but applying the standard of the Liebman-Walsh dissent, the Board focused on the “disrespectful” language in isolation and held that in the absence of a limiting disclaimer the rule was unlawful because employees “would reasonably assume” that the employer would punish them for being disrespectful if they raised questions about their terms or conditions of employment. That approach ignores the requirement that rules should be looked at from the perspective of whether employees would reasonably read the entire rule, in context, as restricting their right to discuss terms and conditions of employment, not whether someone – members of the Acting General Counsel’s staff or Board Members – could theoretically reach that conclusion as an academic legal exercise.

In light of these opinions and the Acting General Counsel’s continued focus on non-union social media policies, employers should expect that the Board will continue to take an expansive approach in holding such policies unlawful if they could be read as restricting protected communications. Because the Costco majority adopted the Liebman-Walsh reasoning that it is the absence of an accompanying disclaimer that permits employees to assume that facially neutral rules could be applied to restrict their right to engage in protected activity, employers should at a minimum consider including specific limiting disclaimers in those sections of their policies to make clear that the prohibitions are not intended to restrict or interfere with protected communications.

David Raizman Quoted in Daily Journal

Los Angeles partner David Raizman was quoted in the Daily Journal in an article titled, “Increasing Disability Discrimination Claims Bring up Fraught Workplace Issues.”

The article discusses the rise of disability discrimination and failure to accommodate disability complaints in California, a state that has long had strong provisions against workplace disability discrimination.

Lawyers on both sides of the fence attribute the increased filings to a growing awareness of workplace disability rights among employees and an increased willingness among judges to put such claims before a jury.

California legislators have long employed a broad definition of disability, for example, to include conditions that merely “limit” various life activities, as opposed to “substantially limit” such activities. Then in 2008, the U.S. Congress adopted many of California’s broad interpretations into federal law.

David, a partner in the Labor & Employment Practice Group, said, “California really led the way here” and, as a result, workers in the state are more likely to see a “less traditional” disability like obesity as something to be accommodated by employers.

David said he tells his clients that if the plaintiff has a medical diagnosis of any kind, a court will most likely consider him or her disabled. He also said that plaintiffs’ lawyers have learned that the claims are likely to go before a jury because they’re “very hard to dispose of at the summary judgment stage.”

He noted that an employer’s claims of undue hardship in accommodating a disabled worker are “frankly, generally squishy concepts that are more subject to factual dispute than others.”

David added that as California’s workers age, claims of workplace disability discrimination will only continue to increase.

“Given the broad definition of disability, the population is getting more disabled,” he said.