Protecting the Employer's Brand During a Labor Dispute

The NLRB makes it hard to protect a company’s investment, which can be substantial, in its brand. A recent decision demonstrates the perils that employers can encounter for their brand during a labor dispute. The case involved the national sandwich franchise, Jimmy John’s, and one of its franchisees in the Minneapolis-St. Paul area.

The franchisee’s workers began a union organizing effort. One of the issues that employees wanted to address was a right to have paid sick days. The franchisee’s policy provided that employees could not “simply” call in sick, but instead had to arrange for someone to take their place. Employees did not receive paid sick days. Employees believed the policy encouraged employees to work while sick, which in turn posed health risks to consumers of the sandwiches the sick employees prepared.

To address this concern, employees prepared a poster (pdf) and a letter to the franchisee’s owner. The employees demanded a meeting to discuss the sick leave policy. Failure to have a meeting, the letter advised, would result in the employees putting up the posters in public areas near the franchisee’s stores. The union attempting to organize the employees also put out a press release, attaching a copy of the poster.

 

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Employers Won't "Like" This One: NLRB Holds Facebook "Thumbs Up" Is Protected Concerted Activity

By Ashley Manfull

Numerous actions by the NLRB’s General Counsel and administrative law judges (highlighted in prior posts on this blog) have caused great concern for labor professionals grappling with the inappropriate comments of employees posted on social media. While these actions have made it difficult enough to determine whether employees’ online comments sufficiently cross the line to take lawful disciplinary action, the NLRB now adds to the confusion, finding employees who simply click “Like” in response to a Facebook post may be engaging in protected, concerted activity.

social mediaOn August 22, 2014, the three member NLRB panel issued a unanimous decision in Triple Play Sports Bar and Grille, 361 N.L.R.B. No. 31, finding an employer unlawfully discharged two employees for their participation in a Facebook discussion involving claims that the bar made withholding mistakes which caused the employees to owe additional state income taxes. The conversation started when a former employee posted a “status update” complaining that she owed money because the bar did not do her tax paperwork correctly. The former employee stated:  “Maybe someone should do the owners of Triple Play a favor and buy it from them.” Other employees commented on the former employee’s status, echoing their dissatisfaction in various profanity-laced statements. The former employee who posted the initial status later added a comment accusing the owner of pocketing money from their paychecks. 

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Cry "Solidarity" and Let Loose the NLRB: A Significant Expansion of the NLRA's Protections

A recent NLRB decision will likely result in a significant expansion of the activity the NLRA protects. The case, Fresh & Easy Neighborhood Market, Inc., 361 N.L.R.B. No. 12 (2014) (pdf), arose from a complaint about sexual harassment. A female employee – Elias – placed a message on a whiteboard at the request of her supervisor. A word in that message was subsequently changed to an inappropriate term for the workplace, and a drawing of a peanut or worm urinating on the employee’s name was added. 

Upon seeing her changed message, Elias told her supervisor that she wanted to file a sexual harassment complaint. She also wrote out the message on a piece of paper and asked, albeit apparently not in a very polite or subtle fashion, a supervisor and two other co-workers to sign that piece of a paper as “witnesses” that she had copied down the words and drawing correctly. While the other employees did so, one later complained to the employer that she was “bullied” into signing the paper by Elias. Another employee later testified that she signed only because Elias was making a scene in front of customers. No one signed the paper intending to take group action.

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Union Organizing in 2014

By Susan Connelly of PTI Labor Research, Guest Blogger*

PTI Labor Research analyzed union representation petitions that were filed within the first half of the year.  

States with the most petitions filed (pdf) included:  New York, California, Illinois, Pennsylvania and New Jersey.  Each of these top five states are “Non-Right to Work,” where it is legal to negotiate a union security clause that requires employees to pay the union fees in order to retain their jobs.

Maps of the 1,069 representation petitions (pdf) and the 244 decertification petitions (pdf) that were filed within the first half of the year highlight a definite lack of petitions within the “Right to Work States” of Idaho, Wyoming, Utah, South Dakota, North Dakota, Nebraska, Oklahoma and Arkansas.

Industries with the most union active organizing (pdf) included:  Business Services (janitorial, security, etc.), Health Care, Local and Suburban Transit, Electric, Gas and Sanitary Services, and Motor Freight Transportation and Warehousing.  This keeps with the overall decades-long trend of unions moving away from traditional manufacturing and towards service sector jobs. 

The unions that most often filed organizing petitions to represent employees (pdf) were:  the Teamsters, the Service Employees International Union, the International Operating Engineers Union, the United Food and Commercial Workers and the International Brotherhood of Electrical Workers. Though most unions will file petitions in most industries, the SEIU is very active within Health Care specifically, the UFCW within entry level service jobs, the Teamsters within Trucking and Warehousing and the IUOE and IBEW within skilled maintenance, engineering or electrical job units. 

The number of petitions filed (pdf) has held relatively steady for past five years, but is down from what we saw a decade ago.  

Though much attention has been on “micro-units” this year, there have been a few notable elections in 2014 with large voting groups.  In a surprising upset, nurses at Sutter Valley Hospitals’ Memorial Medical Center in Modesto, California voted against representation by the California Nurses Association union on May 27th with a vote count of 462 “No” votes to 352 “Yes” votes.  In addition, though employees rejected the United Steelworkers union in February of this year at Novelis Corporation in Scriba, NY, the case is currently under review due to allegations of company violations. 

With the Board currently reviewing a number of cases after the Noel Canning decision, we shall see if expedited election rules come into play before the year’s end and, if so, we could anticipate a spike in union petition filings. 

Though union organizing in the fast food industry was a hot topic in the first half of the year, few petitions have been filed within the industry.  With the amount of organizing dollars being spent for fast food workers, we can also anticipate more petitions for this group.

* Ms. Connelly is not an attorney.  Neither she nor her firm is affiliated with Vorys, Sater, Seymour and Pease, LLP.  The opinions and views expressed in this post are her own and not intended to convey legal advice. 

A Limit on Micro-Unions for Now, but Long-Term Significance of Limitation Uncertain

On the heels of the much anticipated decision involving the Macy's department store chain, discussed on this blog last week, the NLRB on Monday released its opinion in a similar case involving Neiman Marcus. Unlike the outcome in  the Macy's case, however, the NLRB found the bargaining unit that the union sought to represent was not an appropriate one, dismissing the union’s representation petition. While the decision does place a limit on the NLRB’s “micro-unions” ruling in Specialty Healthcare, the actual significance of the limitation will only become clear with the passage of time. 

Young woman trying on sandals in a shoe storeIn the Neiman Marcus case, the union sought to represent a group of approximately 46 shoe sales associates in two different women’s shoe departments in the employer’s store on Fifth Avenue in New York City. One shoe department was the “Salon” shoes department and another was the “Contemporary” shoe area, which was part of a larger Contemporary Sportswear department. These two areas were located on two different, non-adjacent floors of the employer’s store. 

Given the structure the employer’s operation, the employees at issue had significantly different management. They had different directors, different floor managers, and different department managers. On the other hand, the employees had certain terms of employment that were in common with one another, such as vacation, holidays, and health insurance coverage. The employees in both departments were paid based on commission, although the rates were slightly different. There was no formal shoe sales training program after the initial employee orientation. The employees were encouraged to make sales in other departments.

On these facts, the NLRB unanimously held that while the group of employees the union sought to represent were “readily identifiable” – in that they were all the sales associates involved in selling women’s shoes – the employees were inappropriately grouped together because they lacked a “community of interest.” First, the proposed group did not follow any of the employer’s administrative or operational lines. In particular, the Contemporary shoe employees were part of a larger Contemporary Sportswear department and were being carved out to be included with the Salon shoe employees for organizational purposes. 

Second, there was no substantial interchange between the Salon shoe employees and the Contemporary shoe employees. They had only limited contact with one another and did not sell product in one another’s departments. Because the employees did not share a community of interest, the NLRB did not look at whether there was an “overwhelming” community of interest with a larger group of employees, in which the union election should have taken place. 

For the labor professional, the opinion is important for at least three reasons:

  • It provides an example of a limitation on Specialty Healthcare and the “micro-units” that might otherwise be approved.  Thus, it suggests that there is at least some limit to the number of unions an employer’s workplace could support.
  • At the same time, however, it provides a road map to unions on getting small units approved. The NLRB comments at various points in its opinion about the type of evidence that may have justified a finding that there was a community of interest. Thus, the decision may well ultimately advance the cause of micro-unions, rather than slow it down.
  • Finally, it demonstrates that employers have the ability to influence, through their regular operations and structure, how their employees would be grouped together in the event of union organizing activity.  Employers that approach this issue proactively, therefore, should consult with qualified labor law counsel for advice.

How Many Unions Can Your Workplace Support?

When most people think about unions, they think about a single union that represents all of the employees at a single workplace. For example, one may think about the UAW and a car company or the USW and a steel manufacturer. But the NLRA doesn’t require that outcome, and the NLRB’s decisions in the last few years have made it much easier for unions to avoid organizing all employees in a particular workplace. 

Instead, it is increasingly easy for unions to select some subset of the employer’s workforce to organize. And, if there are several different possible groups of employees to organize at any one business, then each employer could end up with multiple bargaining relationships. Employers could have more than one union representing different groups of employees. 

A significant decision that highlighted this possibility was Specialty Healthcare, which this blog covered a few years ago. That case arose in the non-acute healthcare setting. In a decision released yesterday, however, the NLRB made clear that the principles announced in that case were going to be applied far more broadly. The case involved the Macy’s department store chain.  The NLRB applied Specialty Healthcare to permit a union election in a group made up of only cosmetics and fragrance sales employees and counter managers in one of the chain’s stores.

Macy’s had argued that the only appropriate group of employees for purposes of a union election was a group of all employees at the store or, in the alternative, a group of all selling employees at the store. The NLRB, in a lengthy 3-1 decision (pdf), rejected this position. In reaching its conclusion, the majority reasoned that the cosmetics and fragrance counter employees and counter managers were a “readily identifiable group” that matched a “departmental line” that the employer drew. 

In addition, the majority found that employees shared a community of interest. Thus, for example, all of the cosmetics and fragrance employees:

  • Had the same first level supervisor (even though the Store Manager, the second level supervisor, exercised control over all employees in the store);
  • Worked in “two connected [by virtue of an escalator bank], defined work areas” (even though they were on different floors and were adjacent to the areas where other selling employees worked);
  • Had limited interaction with other employees (even though they attended daily “rally” meetings with all employees in the store);
  • Received training from vendors (even though it was different types of training from different venders); and
  • Were paid on commission (even though the amount of that commission varied between them).

Consistent with Specialty Healthcare, the majority went on to find that the employer did not prove that the selling employees in other departments of the store had an “overwhelming” community of interest with the cosmetics and fragrance employees. The majority also rejected the notion that there was a “presumption” in the retail industry for bargaining units that included all of the selling and/or non-selling employees in the store.

Member Miscimarra (R) dissented. He would have found that the only appropriate unit included all selling associates in the store, not just the ones found in the cosmetics and fragrance department. Initially, there were certain working conditions and benefits that were common to all salespeople that justified grouping them together. Next, the cosmetics and fragrance employees had various similarities and differences between them that matched, in a number of different respects, the similarities and differences between selling employees in other departments. Thus, there was no basis to conclude that the cosmetics and fragrance employees should be in a group by themselves. Finally, Member Miscimarra wrote a spirited critique of Specialty Healthcare, a decision that he would not apply in this case, or in any other.

For the labor professional, the Macy's decision:

  • Reinforces the trend to smaller bargaining units;
  • Demonstrates that Specialty Healthcare will certainly be applied outside the non-acute healthcare setting;
  • Makes more likely the prospect, as we warned when commenting on Specialty Healthcare, of numerous unions representing different groups of employees; and
  • Is a warning to employers concerned about union organizing activity to examine critically the structure and operational deployment of their workforces – just how many unions could your workplace support?

The UAW Forms Local Unions to Represent Workers at VW and Mercedes

Despite losing the union election at VW in February by a vote of 712-626, the UAW has announced that it is forming a local union to represent the workers at VW.  Additionally, VW management and the German union, IG Metall, have agreed that the UAW Local will have a seat on VW’s Works Council that bargains with VW globally.

The UAW claims that it will not charge dues for membership into the UAW Local until VW and the UAW Local actually negotiate a collective bargaining agreement.  Also, the UAW states that it will not demand to negotiate a collective bargaining agreement with VW until the UAW Local has a majority of VW’s Chattanooga workers as members.

Thus, with the help of VW management and the IG Metall union, the UAW is taking a different route to gain recognition by VW. 

The UAW has also announced the same plan at Mercedes in Alabama.  The UAW has never filed an NLRB election petition at Mercedes, but it is forming a UAW Local with the same deal from Mercedes management and the IG Metall union.  The UAW Local will have a seat on the Daimler World Employee Committee.

The UAW’s efforts to organize the transplants has been stymied because the UAW has never been able to convince a majority of the employees to vote “yes” for the UAW in a secret ballot election.  Consequently, the UAW is taking a different approach.  It still must sell “membership” to the VW and Mercedes employees.  The strategy appears to be that with membership on the international bargaining committees, the UAW Locals will have a legitimacy that will help them sell membership. 

The strategy is reminiscent of that proposed by retired Law Professor Charles Morris in his book, The Blue Eagle at Work.  In the book, Professor Morris argues that employers are required to bargain with minority “member-only” unions under the NLRA.  He proposed that unions should use this strategy to grow union membership, as opposed to using the NLRB election route.

It will be interesting to see how this develops and whether the UAW can sell this form of membership to the unions.  Certainly this new approach would not be possible without the assistance of management and the German union.

Supreme Court Deals Blow to Public Sector Unions

In a close decision earlier this week, the U.S. Supreme Court dealt a blow to unions representing government employees. The case, Harris v. Quinn, dealt with an effort in Illinois to permit unions to organize a group of individuals who provide services to those who are unable to live in their own homes without assistance. Under the federal Medicaid program, states can establish programs that provide services to those who would otherwise have to be institutionalized. The programs pay for individuals who provide services to individual customers pursuant to a personal care plan that is unique to that customer. Many of these care providers are relatives of the person receiving the care.

Through actions of both then-Governor Rod Blagojevich (D), and later the legislature, the state permitted a union to organize the personal care providers. The Service Employees International Union (“SEIU”) did so successfully, and ultimately entered into a collective bargaining agreement that included an “agency fee” provision. An agency fee is similar to union dues, and the agency fee provision here was authorized by state law.

 

A group of personal care providers objected to paying a mandatory fee to the SEIU because they did not want to support the SEIU. They sued the governor and the union alleging a violation of their First Amendment rights. They lost in the lower courts based on a 1970’s ruling in a case called Abood v. Detroit Board of Education, which the lower courts interpreted as permitting the assessment of a mandatory fee payable to a union by public employees whom the union represents for purposes of collective bargaining.

 

In its decision, however, the Court rejected the Abood case as controlling. That case, the Court said, involved public employees. The personal care providers here were not public employees because the customer -- the person receiving the care -- controlled the significant aspects of their employment, and the state’s control was very narrow. Thus, the state was not the employer of the personal care providers.

 

Rather than apply Abood, the Court determined that the agency fee provision did not serve a “compelling state interest that cannot be achieved through means significantly less restrictive of associational freedoms.” The agency fee did not serve the goals of “labor peace” or the promotion of the welfare of the personal care assistants. Thus, the agency fee couldn’t survive the constitutional challenge.

 

The dissenting justices disagreed strongly on the question of whether Abood applied. Those justices held that it did, based on the “joint employer” doctrine. That is, the state and the customer were both the employer given that they both exercised authority over different aspects of the personal care providers’ “employment.” For these and other reasons, the dissent would have found the agency fee provision constitutional.

 

For the labor professional, especially in the public sector, the case is quite significant:

  • The Court’s questioning of Abood all but invites a challenge by a government worker to an agency fee provision. According to the Bureau of Labor Statistics, there are 7.3 million employees in the public sector who belong to a union.  Agency fee statutes exist in a number of different states and surely a significant percentage of these public sector employees have been required to pay money to a union that engages in collective bargaining on their behalf.
  • According to some reports, the SEIU could lose millions of dollars in revenue as a result of this decision. Other unions who have organized workers similar to the personal care providers may face similar revenue losses. Organizing activity could, as a result, pick up as these unions seek to make up lost revenue.
  • It will be interesting to see whether the Court’s treatment of the joint employer issue in this case finds its way into private sector cases. As previously reported on this blog, the NLRB recently solicited briefs on the question of whether to overturn 30 years of precedent in the private sector on the joint employer standard. 

 

Supreme Court Rules that Obama Recess Appointments Invalid

In a major decision yesterday, the U.S. Supreme Court held that the recess appointments President Obama made to the NLRB in January 2012 were unconstitutional. The case related to the appointments of three members of the NLRB on January 4, 2012, during a period of time in which the U.S. Senate was in an intra-session recess, punctuated by "pro-forma" sessions every three days. One such session had been held on January 3 and another was scheduled for January 6.

The Supreme Court unanimously concluded that the appointments were invalid, although the reasoning for that conclusion split the Court into two camps. The majority view would permit some intra-session appointments, but held that in this case the three day break was not long enough to trigger the President's recess appointment power. The concurring view was that there could be no recess appointments during an intra-session recess, and that only positions that became vacant during that recess could be filled by the recess appointment power.

While the constitutional scholar will spend many hours parsing the decision (and there is plenty of decision to parse, with the opinions in the case running over 100 pages), the implications for labor professionals are more practical. These include:

  • All opinions decided by the NLRB during the period from January 2012 to August 2013 are suspect. Given the invalidity of the recess appointments, there were not enough properly appointed and confirmed NLRB members to lawfully issue decisions.
  • The last time a group of NLRB decisions were invalidated by a Supreme Court ruling, involving whether two members the NLRB could properly conduct its business, the NLRB set up a process for reviewing these decisions and ultimately affirmed the outcome of those decision in the vast majority of cases.
  • Some very significant decisions are potentially in question. These include, among others, the NLRB's first Facebook termination case, a case addressing whether the employer has the right to suspend dues check off when a union contract expires, and the decision limiting an employer's confidentiality instruction to employees during a workplace investigation.
  • With the need to reassess these and many other cases, the NLRB's agenda on other items may be slowed. For example, the resources necessary to reexamine the numerous decisions invalidated by yesterday's ruling may cause the NLRB's "ambush" election rule to be delayed.

While the NLRB's Chairman made a brief statement yesterday, the NLRB has not yet announced how it will address the Court's ruling.

Can You Really Call Your Boss a !$@#%#^&? Maybe, says the NLRB

Employees sometimes get upset at work. Employers and managers sometimes do things that can cause that upset. But many employers, and I suspect many employees, believe there is a line that cannot be crossed in expressing the dismay about an employer's action(s). There is, not surprisingly, always debate about where that line should be drawn.

In a recent decision, the NLRB added fuel to that debate. The case, Plaza Auto Center (pdf), involved an employee who had a habit, during his short time selling used cars for the employer, of complaining about various problems he perceived with his work environment. This included issues dealing with wages, restroom break policies, and deductions from pay to cover damage to vehicles. Indeed, on the issue of wages, the employee complained that he, and the other salesmen, should receive at least minimum wage under state law. The employee contacted the applicable state agency, and after the state agency contacted the company, the company changed how it paid its employees.

These complaints culminated in a meeting between the employee, the owner of the company, and two of the company's managers. During the meeting, the owner told the employee that he complained too much, that he was asking too many questions, that he was "talking a lot of negative stuff," and that he had to follow the employer's policies. The owner also told the employee - twice - that if he didn't trust the company, he didn't need to work for the company.

At that point, the employee "lost his temper" and engaged in the following conduct:

  • Called the owner a "f***ing mother f***er," a "f***ing crook," and an "asshole";
  • Told the owner that he was stupid, no one liked him, and everyone talked about him behind his back;
  • Stood up in the small office during the verbal outburst and pushed his chair aside; and
  • Told the owner that if the owner fired him, the owner would regret it.

After the employee finished with his tirade, the owner fired him.

On these facts, the NLRB majority held that the employee did not lose the protection of the NLRA.Argument Applying a well-established, multi-factor "balancing" test, the NLRB concluded that the employee's language was "obscene and denigrating," but specifically found that the language and other conduct was not "menacing, physically aggressive, or belligerent." A federal court of appeals, considering the same conduct, had described it as "insubordinate."

But this was not enough to find the employee was properly fired. Thus, the NLRB noted that the conduct took place in a private office (not in front of other hourly employees), the subject matter of the meeting involved concerted complaints about the conditions of employment, and the employer "provoked" the employee. The "provocation" took the form of telling the employee that he didn't need to work for the company if he didn't like its policies and in refusing to deal with the merits of the employee's complaints about working conditions. Because these considerations outweighed, in the NLRB majority's view, the nature of the outburst, the employer was not legally permitted to terminate the employee.

In a strongly worded dissent, Member Johnson (R) took issue with the majority's decision on a number of different fronts, including whether the majority interpreted directions from the federal court of appeals in the case correctly. His dissent is summed up in the following (edited) passage from his opinion:

[M]y colleagues' analysis of the permissible range of profane and insubordinate conduct by employees toward management is cause for disagreement. Their approach implies that such misbehavior is normative, or at least that the [NLRA] mandates tolerance of it whenever profane and menacing outbursts are somehow connected to protected concerted activity. I disagree. ... In my view, few, if any, employers would countenance [the employee's] behavior in the absence of protected activity. ... Indeed, the abnegation of the [employer's] right to discharge [the employee] in the circumstances of this case runs counter to the overarching policies of promoting industrial peace and labor relations stability under the [NLRA] and impedes effective enforcement of other employment laws.

The case is chock full of important points for labor professionals. Just of few of those are:

  • Profanity may not automatically support termination. Labor professionals must look at the context of the statement and ensure that protected concerted activity is not involved.
  • Engaging with employees on issues of concern is not just a smart practical measure, but can also reap benefits in the legal arena as well.
  • Don't make termination decisions in the heat of the moment. Take some time to consider, reflect, and consult with a labor professional who can provide an assessment of the misconduct before acting.