Letter from the Editor

This is the second newsletter from the TBA Labor and Employment Section in 2009. I want to thank this issue's authors - Drew Farmer, Catherine Molloy, Karl Bauchmoyer, Graham Askew (a repeat author), J. Craig Oliver, Joycelyn Stevenson, Rosalind Eddins and Jerome Pinn.

If you have an article, an idea for an article, or even a constructive criticism, please e-mail me or call (615-726-5484).

Thank you,
Bruce Buchanan

The extent of employee protection under Section 7 of the National Labor Relations Act (NLRA) can sometimes be difficult to discern. Inherent in employee rights under Section 7 is the right to maintain the confidentiality of one’s support for a union. Thus, Section 8(a)(1) of the Act makes it unlawful for an employer to interrogate an employee concerning the employee’s union activities and/or support. However, under Rule 26 of the Federal Rules of Civil Procedure, a party has the right to inquire into matters relevant to pending claims or defenses. It was the balancing of these competing rights that was at issue in Chinese Daily News, 353 NLRB No. 66 (Dec. 2008). The complaint in that case alleged, inter alia, during depositions taken in connection with a federal class-action lawsuit, the employer violated Section 8(a)(1) of the NLRA by interrogating employees about their union support and activities.

Applying the test set forth in Guess?, Inc., 339 NLRB 432 (2003) 1, the Administrative Law Judge (ALJ) found no violation and dismissed the allegation of unlawful interrogation. The Board, utilizing the same test, reversed the ALJ and found the employer violated the NLRA, when during a deposition, it asked an employee if the employee voted for the union. Interestingly, the two member Board declined to decide whether other deposition questions were unlawful, concluding that findings of unlawful interrogations with respect to those questions would be cumulative and would not affect the order. The decision illustrates the difficulty of discerning when an employer’s discovery requests implicate Section 7 concerns, and thus violate the NLRA. It is also a good reminder to employers and their attorneys that employee protection under the NLRA extends beyond questioning in the workplace and can encompass situations that do not directly involve a union.

Background

Employees Wei, Wang and Sun were longstanding and open union supporters working at the Chinese Daily News, a publication based in Monterey Park, California, when Wang and two other employees brought a class-action wage and hour lawsuit in U.S. District Court against the employer. Wei and Sun submitted declarations in support of the motion for class certification. Seeking to disqualify the plaintiffs as representative plaintiffs, the employer took the position that the class action was a pretext for the plaintiffs’ “real motive” of advancing the union’s organizing interests and argued the plaintiffs would not act in the best interests of the class. The District Court certified the class and rejected this argument. In denying the employer’s motion for reconsideration, the Court concluded the employer failed to establish the class-action suit was filed to pressure the employer to organize. Additionally, the Court found there was no conflict between the plaintiffs’ protected activity under the NLRA and their ability to adequately represent the class members in the lawsuit.2 Nonetheless, the employer continued to challenge the appropriateness of the class certification as litigation of the case proceeded. During discovery, the employer’s attorney deposed employees, Wei, Wang and Sun, and asked them a number of questions regarding their union activities and involvement in filing Board charges. Wei was asked whether he voted in a Board election and whether he voted for the union. He answered yes.

Analysis

The Board has held disclosure of information in a deposition that may reveal employees’ Section 7 activities requires a balancing test. Thus, when an employer pursues, in discovery, information regarding Section 7 activity, the Board considers whether the employer’s constitutional interest in access to the courts and its legitimate use of legal proceedings in pursuit of those claims justifies the employer’s actions. That inquiry has turned in part on the relevance of the protected information sought to the matter at issue in the lawsuit.3

Applying the test set forth in Guess?, Inc., the ALJ found the employer’s questioning of the employees concerning their union support and activities was relevant to the employer’s defense that the plaintiffs in the case should be disqualified as class representatives. Having found the information relevant, the ALJ next considered whether the employer was unlawfully motivated, and concluded there was no evidence of unlawful motivation. Finally, because the employees were open and longstanding union supporters, the ALJ found their confidentiality interests under Section 7 were outweighed by the employer’s significant interest in obtaining the information to defend itself against the lawsuit. Accordingly, the ALJ dismissed the allegation.

In reversing the ALJ, as to the question to Wei, regarding whether he voted for the union in the election, the Board found the question violated Wei’s Section 7 rights. In finding the question unlawful, the Board also relied upon the test set forth in Guess?. In finding a violation, the Board made two assumptions, both relating to the first two prongs of the Guess? test. First, the Board assumed the deposition question at issue was relevant to the litigation. Next, the Board assumed the questioning did not have an illegal objective. However, with respect to the third prong of the test, the Board, contrary to the ALJ, found Wei had a substantial Section 7 interest in maintaining the confidentiality of his election vote. The Board went on to find that Wei’s Section 7 interest outweighed the employer’s need for the information to assist with developing its defense to the lawsuit. Thus, the Board concluded the deposition question regarding how Wei voted in the election constituted an unlawful interrogation.

This case reiterates the Board’s view that the “secrecy of balloting is a hallmark of our election procedures." The Board’s finding of a violation here also is a continuation of its recognition that interrogation of an employee concerning the employee’s voting intentions in a secret-ballot election is unlawful, even when the employee is an open union advocate.

Rosalind Eddins has been an attorney with the National Labor Relations Board since 1992. She is currently Deputy Regional Attorney for Region 26 of the NLRB. She is a 1989 graduate of the University of Memphis School of Law. The views expressed in the article are those of the author and do not necessarily represent the views of the National Labor Relations Board or the United States Government.

Endnotes:

1. In Guess?, Inc., the Board devised a three-part test to be applied when employees are interrogated during depositions about their union activity. First, the questioning must be relevant. Second, if the questioning is relevant it must not have an illegal objective. Third, if the questioning is relevant and does not have an illegal objective, the employer’s interest in obtaining the information must outweigh the employees’ confidentiality interests under Section 7 of the Act. 339 NLRB 434.
2. Wang et al. v. Chinese Daily News, Inc. et al., 231 F.R.D. 602 (C.D. Cal. 2005), affd. 159 Fed. Appx. 750 (9th Cir. 2005).
3. Maritz Communications Co., 274 NLRB 200 (1985); Wright Electric, Inc., 327 NLRB 1194 (1999), enfd. 200 F.3d 1162 (8th Cir. 2000); and Guess?, Inc., 339 NLRB 432 (2003).

High Court Expands Pool of Potential Retaliation Plaintiffs

By Drew Farmer

An informal investigation into an employee’s complaint of discrimination or harassment at the workplace is critical. But what happens if, during the course of the internal investigation and in response to an interviewer’s questioning, a third-party employee makes a statement suggesting the suspected supervisor or other employee has engaged in discriminatory or harassing acts toward that employee or someone else? May these statements, and the employer’s knowledge of them, later come back to haunt the employer?

On January 26, 2009, the Supreme Court spoke to these issues in the highly anticipated case of Crawford v. Metropolitan Government of Nashville and Davidson County, Tennessee, 129 S. Ct. 846 (2009). The Court ruled an employee’s response to informal questioning during an internal investigation may be considered “oppositional” activity and consequently protected activity under Title VII. As a result of this ruling, employers may not take adverse action against an employee because of the fact he or she made a statement during an internal investigation.

Long-time employee leaves no stones unturned during internal investigation
The case arose out of the local government’s internal investigation into allegations of sexual harassment by an employee relations director. During the investigation, the interviewer - a human resources officer - asked a 30-year municipal employee whether she had seen the employee relations director engage in any “inappropriate” behavior. The interviewee recounted several instances in which the employee relations director had made sexual gestures and statements toward her. On one occasion, for example, he had “entered her office and ‘grabbed her head and pulled it to his crotch.’”

The local government did not find it necessary to take any action against the employee relations director. Later, it terminated the 30-year employee on the ground she had committed embezzlement. Although she had never independently complained about the employee relations director’s alleged conduct, she filed a lawsuit alleging her termination violated Title VII’s anti-retaliation provisions. A federal trial judge and an appeals court ruled against the employee; however, the Supreme Court reversed.

Court attempts to ground decision in “ordinary meaning” of Title VII
The Court began by noting Title VII’s anti-retaliation provision protects two different types of activity. First, the statute prohibits adverse action based on the fact an employee “has opposed any practice made . . . unlawful by [Title VII].” Second, the statute prohibits adverse action based on the fact an employee “made a charge, testified, assisted, or participated in . . . an investigation, proceeding, or hearing under [Title VII].” The Supreme Court’s decision rested solely on the opposition clause.

The Court attempted to explain its decision as simple adherence to the “ordinary meaning” of “oppose.” “Oppose” is defined in dictionaries to include “resist” and “antagon[ize],” and the Court found the former employee’s answers “ostensibly” fell within the definition and “would certainly qualify in the minds of reasonable jurors as ‘resist[ant]’ or ‘antagon[istic]’.” Furthermore, the Court deferred to an EEOC compliance manual and government brief collectively opining - when an employee communicates a “belief” that someone at the workplace has committed discrimination or harassment, the communication “virtually always” amounts to “opposition.”

The Court recognized possible exceptions, such as “an employee’s description of a supervisor’s racist joke as hilarious,” but did not believe these “eccentric cases” should form the basis for a general rule. Instead, the Court repeatedly referred to “ordinary meaning” and “ordinary discourse” as central to its decision, noting people had “opposed” slavery without active, consistent expression of that opposition and that people today “oppose” the death penalty without writing letters to the editor or engaging in protests.

Policy considerations carry the day
Despite the Court’s worthy attempt to decide the case on statutory grounds, it is clear the case was resolved based on the Court’s choice between two competing policy arguments. The employer and several “friends of the Court” had argued that recognizing responses to informal questioning as “oppositional activity” would cause employers to be less vigilant in conducting the internal investigations the Court’s prior cases unequivocally encourage. The Court, however, was skeptical that rational employers fearful of a hypothetical future retaliation suit by an interviewee actually would forego the interview entirely.

More important, the Court concluded the policy arguments on the other side were more compelling. First, the primary purpose of Title VII is to protect employees. Second, yielding to the local government’s policy arguments, in the Court’s view, would dissuade employees from being frank during internal investigations out of fear they could be retaliated against with immunity. Third, this would give employers in some cases a perverse incentive to place fearful employees in a “catch-22” resulting from the interplay between the lack of protection from retaliation and the necessary elements of the Court’s recognized affirmative defense in harassment suits. The defense requires employers to show both that they exercised “reasonable care” to prevent and correct harassment and that the suing employee failed unreasonably to take advantage of the employer’s preventative and corrective measures. Employers who conducted sham “investigations”—i.e., “reasonable care”—could take confidence in the witnesses’ reluctance to answer questions and later, if one witness decided to file suit for harassment, use the witness’ silence during the investigation as evidence the witness/employee had unreasonably failed to “take advantage” of the employer’s efforts to root out harassment by conducting the investigation. The Court’s unwillingness to adopt a rule that might encourage such tactics seemed to carry the day more so than any “ordinary meaning” of Title VII’s language.

Observations
While the decision does expand the potential pool of retaliation plaintiffs, it is limited to the issue of whether a particular statement is “opposition” and in no way makes it easier for a plaintiff to prove the ultimate fact that he or she was retaliated against because of opposition. Indeed, in this very case the Court noted the local government still had alternative arguments against the former employee’s claim that can be considered by the lower courts once the case is returned. In addition, two Justices signed a concurring opinion emphasizing their view that the Court’s understanding of the “ordinary meaning” of “opposition” did not extend beyond “purposive conduct” to things such as “silent opposition” or opposition expressed to co-workers at the water fountain. These concurring statements, as well as the Court’s acknowledgment of possible exceptions to its decision, seem to encourage employees and plaintiffs’ attorneys not to get too trigger-happy as a result of Crawford. Only time will tell whether this possible implicit encouragement is respected.

Robert DeNiro's Restaurant Hit with $2.5 Million Claim by Disgruntled Waitstaff in Tip Pooling Claim
By Graham W. Askew

Wage and hour lawsuits are all the rage in the restaurant industry. Recently, a class of workers who sued an upscale sushi restaurant chain co-owned by Robert DeNiro agreed to settle their claims for $2.5 million. Filed by two waiters, the suit alleges the restaurant chain violated state and federal law by requiring service employees to pool their tips and letting managers and non-service employees partake in the tip pools. It is just one example of the numerous similar wage and hour lawsuits currently pending against the restaurant industry around the nation.

Under the Fair Labor Standards Act, employers are required to pay their employees a specified minimum wage. However, if employees receive customer tips during the course of their employment, the employer may be able to take a “tip credit” against their hourly wages. Certain requirements must be met to be eligible for the tip credit. First, the employer must notify the employees of the requirements of the law regarding minimum wages and of the employer’s intention to take the tip credit. Second, all tips given to the employees must actually be received by them.

The first element, also known as the notice requirement, is not difficult for an employer to meet. In Pellon v. Business Representation Int’l Inc., 528 F. Supp. 1306 (S.D. Fla. 2007), the Court discussed the employer’s obligation to provide proper notice to employees before taking a tip credit from their hourly wages. The Court stated it is not necessary for the employer to “explain” the tip credit. Rather, it is enough to simply “inform” the employees of the tip credit. An employer can fulfill this obligation by merely displaying a poster that includes language approved by the Department of Labor regarding the tip credit provision.

The recent frenzy of successful litigation has focused on the second element. The Fair Labor Standards Act provides that only those employees working in occupations, which customarily and regularly receive tips, can tip pool. All others are specifically excluded. Employers that allow management, kitchen staff and custodians to participate in a tip pooling arrangement expose themselves to liability. For example, in Chan v. Sun Yue Tung Corp. d/b/a 88 Palace, 2007 WL 313483 (S.D.N.Y. Feb. 1, 2007), the court held the employer improperly took a tip credit when it required tipped employees to share their tips with management. The court ordered the employer to pay nearly $700,000 in backpay to the 11 employees who filed suit.

If a court finds a tip pool is invalid, the employer is disqualified from taking the tip credit and must pay its employees the full minimum wage for the relevant time period. The period in question can extend back for two or three years and be financially devastating. This is especially true in a class action or collective action lawsuit where, as is illustrated by the recent settlement involving Robert DeNiro’s restaurant, damage awards are routinely in excess of $1 million.

The primary targets of the currently pending lawsuits are restaurant chains and high end establishments because of the greater amount of money in controversy. As time goes by, however, it is most likely that these more sophisticated entities will change their practices to be in compliance with the Fair Labor Standards Act. Attorneys bringing such suits will be forced to focus their efforts on the remaining so-called low hanging fruit. Even the smallest and most rural of restaurants should be advised to change their practices now to avoid becoming the next victim of the current wage and hour trend.

Graham W. Askew is an associate with Butler, Snow, O’Mara, Stevens & Cannada, PLLC. Mr. Askew is a member of the firm’s Labor & Employment Practice Group, where he concentrates in the areas of employment litigation, traditional labor law, and business immigration. He received his J.D. at Wake Forest University School of Law. Contact him via e-mail at graham.askew@butlersnow.com.

Lilly Ledbetter Fair Pay Act
By Catherine H. Molloy

In April 2008, the Lilly Ledbetter Fair Pay Act (also called the Fair Pay Restoration Act) was defeated in the Senate, after passing in the House of Representatives with a vote of 225 to 199. However, the Ledbetter Act is expected to be re-introduced in the 111th Congress, as it was only 4 votes away from achieving cloture in the Senate. The Ledbetter Act seeks to reverse a 2007 United States Supreme Court decision, Ledbetter v. Goodyear Tire & Rubber Company, limiting plaintiffs’ rights under Title VII.
Background

In Ledbetter, the Supreme Court held a female employee of Goodyear was precluded from asserting claims of sex discrimination under Title VII of the Civil Rights Act of 1964 because she failed to timely file her charge with the Equal Employment Opportunity Commission. Ledbetter alleged she was paid significantly less than her male counterparts due to her sex during her 19-year employment at Goodyear. However, because she did not file her charge with the EEOC within 180 days of any alleged unlawful employment practice, her claims were barred.

The Supreme Court held any alleged adverse “continuing effects” of past discrimination were insufficient to re-start the 180-day time limit, and Ledbetter failed to specifically allege any new intentionally discriminatory acts during the relevant period. Accordingly, the Court reversed the district court’s award of $60,000 in back pay and $300,000 in punitive and compensatory damages.

The Act
In response, Congress introduced the Ledbetter Act to explicitly overturn the Supreme Court’s ruling in Ledbetter. The Ledbetter Act establishes a new discriminatory act for purposes of the EEOC’s filing requirements whenever a discriminatory compensation practice is adopted, when an individual becomes subject to a discriminatory practice, or when an individual is affected by a discriminatory practice, including each time wages, benefits or other compensation is paid. Most importantly, the Act re-starts the clock each time an individual receives a paycheck affected by a discriminatory practice, past or present.

Notably, the Ledbetter Act introduced in the 110th Congress applied not only to claims regarding sex discrimination under Title VII, but also discrimination based on race, color, national origin, and religion. The Ledbetter Act also provided for identical language and application to the Americans with Disabilities Act of 1990 and the Age Discrimination in Employment Act of 1967.

Conclusion
Under these new provisions, Lilly Ledbetter would have been able to collect the jury’s award under Title VII despite her later filing. Instead of running from the date Ledbetter first received a discriminatory paycheck, a new discriminatory practice for purposes of Title VII would have occurred each time she received her paycheck.

So democrats, including President – Elect Barack Obama, and six republicans supported the Ledbetter Act when it was brought before the Senate in April 2008. With five Democratic senators replacing Republicans who voted against the Ledbetter Act, chances of it passage in the 111th Congress have greatly increased.

Ms. Molloy is an associate in the litigation section of King & Ballow. She received her Bachelor of Arts degree in Political Science from the University of South Florida, and her law degree from the College of William & Mary, Marshall Wythe School of Law. You can contact Ms. Molloy at cmolloy@kingballow.com.

A recent case from the Sixth Circuit Court of Appeals reinforces the dangers inherent with employers’ no-fault attendance policies under the Family and Medical Leave Act (FMLA). In Barrett v. Detroit Heading, LLC, 2009 WL 383729 (6th Cir. 2009), a discharged employee of an automobile parts manufacturer sued his employer under the FMLA after the employer discharged him based upon a final occurrence under the employer’s no-fault attendance policy. At trial, the jury returned a verdict in favor of the employee, Donald Barrett, and against the employer. On appeal, the Sixth Circuit held: (1) the employer did not satisfy its obligation under the FMLA to make sufficient inquiry as to whether the employee’s last absence qualified for protection under the FMLA; and (2) mere telephone calls by the employer did not satisfy its duty of inquiry under the FMLA.

Before Barrett began his employment at Detroit Heading, his physician diagnosed him with hypertension. Barrett's hypertension was of the “labile” variety, meaning his blood pressure could rise and fall at a moment's notice. Barrett’s doctor treated his hypertension with medications and by instructing Barrett to rest when he was under stress.

On eight different occasions during his employment at Detroit Heading, between August 2001 and November 1, 2004, Barrett’s doctor signed doctor slips excusing Barrett from work because of uncontrolled hypertension or hypertensive urgency for periods of one to six weeks. Three of the notes related to Barrett's hospitalization during the summer of 2003, when he experienced a “hypertensive crisis.”

In January 2004, Detroit Heading implemented a no-fault attendance policy. The new policy assessed employees half of an occurrence for being tardy by less than one hour and a full occurrence for being absent or tardy by more than one hour. The company took no disciplinary action until an employee accumulated four occurrences, at which time it gave the employee a verbal warning. Each occurrence thereafter resulted in increasing levels of discipline, including a written warning at five occurrences, a three-day unpaid suspension at six occurrences, and termination at the seventh occurrence. When an employee was absent because of an emergency, the company permitted the worker to use vacation or personal days up to three times per calendar year, provided that vacation and personal days were available and the worker notified management 30 minutes prior to the start of the employee's shift. The policy excused absences, and therefore did not charge employees occurrences, if such absences resulted from vacation, holidays, work-related injuries, jury duty, or leave granted in accordance with state or federal law, including FMLA leave.

Before his shift on November 1, 2004, Barrett had accumulated six occurrences under the no-fault attendance policy. On November 1, 2004, Barrett awoke feeling very ill. His symptoms included a headache, tension in his neck, tingling in his face, and blurred vision. His blood pressure measured 180/110 which qualified as a “hypertensive urgency.” Barrett’s wife, a nurse, called the doctor, who instructed Barrett to stay in bed, take his medication, and take the day off from work.

Immediately after speaking with the doctor, and 45 minutes prior to the start of her husband's shift, Barrett’s wife contacted the company to inform it that her husband would be absent from work that day. Because the contact person for absences was not available, she left a message on his voice mail, stating her husband would not be in that day, and he was asking for an emergency vacation day because his blood pressure was elevated.

When the plant manager returned Barrett’s wife’s call, she told him that the reason Barrett could not come to work was his high blood pressure. The plant manager did not ask her any questions during the call. Although Barrett’s wife asked for her husband to take an emergency vacation day, the plant manager told her that he had already exhausted his emergency vacation days.

The next day, Barrett’s doctor released him to return to work and provided him a doctor’s slip excusing his absence from work the prior day due to “hypertensive urgency.” The doctor’s slip appears to have been faxed to the company’s human resources director, but she testified she did not recall receiving it. Later that day, the HR director called Barrett and told him his absence the prior day was his seventh occurrence and, under the company’s attendance policy, his employment was terminated. She did not ask Barrett why he was absent on November 1, and Barrett did not volunteer this information because he believed she had received the faxed copy of his doctor's excuse. The HR director did not ask the plant manager, with whom she knew that Barrett had spoken the prior day about his absence, why Barrett was absent from work.

On appeal, the employer argued the evidence at trial did not support the jury's finding that Barrett provided sufficient notice to the company that his absence on November 1 was for an FMLA-qualifying reason. The Sixth Circuit observed "the critical test for substantively-sufficient notice is whether the information that the employee conveyed to the employer was reasonably adequate to apprise the employer of the employee's request to take leave for a serious health condition that rendered him unable to perform his job." The court further stated that “[w]hat is practicable, both in terms of the timing of the notice and its content, will depend upon the facts and circumstances of each individual case.”

The Court found, while there were communication errors by both parties, there was sufficient evidence to support the jury’s verdict that Barrett and his “spokesperson”- his wife - provided adequate notice to the company his November 1 absence may have qualified for leave under the FMLA, and that the company failed to satisfy its obligation to make further inquiry, thereby violating the FMLA when it terminated Barrett. The Court noted the company had been informed a number of times before the November 1, 2004 absence that Barrett missed work due to his hypertension. The company was aware that Barrett suffered from hypertension and it could become severe and disabling at times.

This case is another potent reminder to employers that no-fault attendance policies can prove hazardous, because if a single occurrence given under such a policy should have qualified the employee for FMLA leave, a later termination of employment for too many occurrences can be illegal under the FMLA. Employers using no-fault attendance policies should exercise caution to ensure that each occurrence, standing alone, is valid and not a protected absence under the FMLA.

Jerome D. Pinn is a Member of the Knoxville, Tennessee office of Wimberly Lawson Seale Wright & Daves, PLLC. His law practice includes an emphasis in employment discrimination and wrongful discharge litigation, as well as ADA and FMLA compliance and wage and hour law compliance. He received his Bachelor of Arts degree in Government and History from Cornell University, and his law degree from the University of Michigan.

Union Free Doesn't Mean Risk Free
by J. Craig Oliver and Joycelyn A. Stevenson 1

The significant amount of attention devoted to the proposed Employee Free Choice Act (“EFCA”) has led to an increased focus on labor relations issues. This increased focus has served to remind many “union free” employers that the National Labor Relations Act (“NLRA”), the federal labor law that covers most employees in the United States, applies to them as well as to employers with union-organized employees. One of the ways in which the NLRA applies to all employers is by limiting their ability to restrict employee communications. Two recent decisions, one by the National Labor Relations Board (“NLRB” or “Board”) and one by a court, provide guidance on the current state of the law in this area.

E-Mail Policies in the Workplace

Given the extensive use of e-mail for professional and personal matters, it is only natural that e-mail has been used to communicate regarding union organizing activities. Most employers have general policies governing the use of e-mail in the workplace. These policies inherently involve consideration of the NLRB’s positions on solicitation and distribution in the workplace.

Employer non-solicitation and non-distribution policies have frequently been examined by the NLRB and the courts. The NLRB has historically held that a general rule prohibiting all solicitation at any time on an employer’s premises violates Section 8(a)(1) of the NLRA 2, and this position has been affirmed by the Supreme Court. See Republic Aviation Corp. v. NLRB, 324 U.S. 793 (1945). The Supreme Court stated a general ban on solicitation during non-working time is “an unreasonable impediment to self-organization…in the absence of evidence that special circumstances make the rule necessary in order to maintain production or discipline.” Policies governing solicitation and distribution directly relate to the rights of union and non-union employees as set forth within Section 7 of the NLRA, which provides:

“Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities …” 29 U.S.C. § 157.

A recent decision by the NLRB addresses how far Section 7 protection extends to electronic communications in the workplace. Specifically, in a 3-2 decision last December, the NLRB described the circumstances under which employers may limit employee communications related to unions in the workplace. In The Guard Publishing Company d/b/a The Register-Guard and Eugene Newspaper Guild, CWA Local 37194, 351 NLRB No. 70 (Dec. 16, 2007), the Board determined that while Section 7 protects certain types of communications, it does not give employees an unfettered right to use their employers’ resources to engage in these communications. Guard Publishing tackled, among other issues, whether an employee has a right to use an employer’s e-mail system for Section 7 activity.

In Guard Publishing, the employer implemented a policy prohibiting non-job-related solicitations on its e-mail system. While employees regularly used e-mail for personal messages, there was no evidence that the e-mail system was used to solicit support for any outside organizations other than United Way.

An employee was disciplined for sending e-mails related to union activities. The Administrative Law Judge (ALJ) found the non-solicitation policy, on its face, was permissible; however, the ALJ also found the employer had allowed the distribution of e-mails unrelated to company business and thus could not ban personal e-mails related to union issues. On appeal, the NLRB noted employers own their e-mail systems and found that there is no inherent right of protection afforded to pro-union e-mail messages. The NLRB also found the employee produced no evidence that the employer selectively allowed use of the e-mail system to solicit on behalf of outside organizations.

The dissenting opinion argued the Republic Aviation analysis should apply, but the majority did not agree. The distinction, according to the majority, is the policy at issue in Guard Publishing did not regulate face-to-face solicitation. The NLRB found absent discrimination, there is no statutory right to use an employer’s equipment or media for Section 7 communications. If an employer prohibits solicitations on behalf of third-party organizations, the employer may prohibit union solicitation as well, even if the employer tolerates personal e-mails that do not contain solicitations. Employers also may allow solicitations by charitable organizations and ban solicitations from all other organizations. In order for a communications policy to be unlawful, there must be discrimination based on Section 7 rights.

The Board further articulated this distinction as follows:

[A]n employer clearly would violate the Act if it permitted employees to use e-mail to solicit for one union but not another, or if it permitted solicitation by antiunion employees but not by prounion employees. In either case, the employer has drawn a line between permitted and prohibited activities on Section 7 grounds. However, nothing in the Act prohibits an employer from drawing lines on a non-Section 7 basis. That is, an employer may draw a line between charitable solicitations and noncharitable solicitations, between solicitations of a personal nature (e.g., a car for sale) and solicitations for the commercial sale of a product (e.g., Avon products), between invitations for an organization and invitations of a personal nature, between solicitations and mere talk, and between business-related use and non-business-related use.

Finally, a word of caution: This decision is likely to be revisited when new members of the NLRB are appointed.

Employee Communications Regarding Terms and Conditions of Employment

Employers have many reasons to want to restrict employees from discussing wages, benefits, and other terms and conditions of employment with their co-workers and others. Among these reasons is a desire to promote workplace harmony, which can be disrupted if employees know the compensation paid to other employees. However, an employer’s concerns must be balanced against the Section 7 rights of employees.

In a recent federal appellate court case comparing these competing interests, Northeastern Land Services, Ltd. v. NLRB (1st Cir. Mar. 13, 2009), the Section 7 rights of employees prevailed. An employee of a temporary services agency was assigned to work for a client. The employee's contract with the temporary services agency included a confidentiality provision stating, in part: "Employee…understands that the terms of this employment, including compensation, are confidential to Employee and [the agency]. Disclosure of these terms to other parties may constitute grounds for dismissal." The employee was discharged for violating this provision, and he subsequently filed an unfair labor practice charge alleging his termination was unlawful discouragement of protected concerted activity. The ALJ ruled in the agency's favor, finding that it had a legitimate reason for the confidentiality provision (namely, to keep the employee from sharing his wage rate with the client).

The NLRB disagreed. The Board found the confidentiality provision unlawful because it was not limited to sharing information with the client, but instead prohibited the employee from discussing his compensation with "other parties," which the employee reasonably could interpret to include union representatives. The First Circuit Court of Appeals agreed with the Board, holding the confidentiality provision unlawful and ordering the agency to reinstate the employee. The Court noted the temporary services agency could have alleviated its concern by a more narrowly tailored confidentiality provision aimed at sharing information with clients.

What are the ramifications if an employer maintains a broad confidentiality clause like the one in the above case, and a court or the NLRB finds the language unlawful? If an employee is terminated for breaching the relevant contract provision, reinstatement with the payment of lost wages and benefits is one remedy. However, there are at least two other potential remedies. First, the court or Board may require the employer to notify all employees (and perhaps even former employees) who had signed the contract that the confidentiality provision was unlawful. It is not difficult to imagine that the first thing employees might do in such a situation is share information about their wages with each other (and perhaps a union representative). Second, in the event such a dispute arises as part of a union organizing campaign or election, the NLRB has ordered a new election in certain cases when the union lost the initial election but complained about an overbroad confidentiality provision that did not allow employees to share information on their terms and conditions of employment.

With all of the focus on the EFCA and the potential for dramatic future changes in the realm of labor law, the above cases serve as a present reminder that being “union free” does not mean an employer is free from the NLRA.

Endnotes:
1. J. Craig Oliver is the Vice Chair of the Labor and Employment Practice Group of Bradley Arant Boult Cummings LLP, a law firm with offices in Tennessee, Alabama, Mississippi, North Carolina, and the District of Columbia. Craig received his B.A. degree from Duke University and his J.D. degree from Harvard Law School. Craig may be reached at 615/252-2310 or coliver@babc.com. Joycelyn A. Stevenson is a partner in the Labor and Employment Practice Group of Bradley Arant Boult Cummings. Joycelyn received her B.A. degree from Howard University and her J.D. degree from Vanderbilt University Law School. Joycelyn may be reached at 615/252-2375 or jstevenson@babc.com.

2. Section 8(a)(1) prohibits employers from interfering with, restraining or coercing employees in the exercise of their right to engage in protected concerted activities. 29 U.S.C. §158(a)(1).

President Obama Issues Pro-Union Executive Orders
By Bruce E. Buchanan

To no one's surprise, President Obama has issued four Executive Orders which assist unions and reflect the President "paying his union dues" - as a thank you for the unions’ support in the 2008 Presidential election. All of the Executive Orders are immediately effective and do not need to be passed by Congress.

The Executive Order with the largest potential impact involves project labor agreements (PLAs) on large-scale federal construction projects. According to the Executive Order, federal agencies may, on a project-by-project basis, require the use of a PLA on construction projects of $25 million or more. The Order states PLAs may be required where it will advance the government's interest in achieving economy and efficiency in federal procurement, produce labor-management stability and ensure compliance with labor, employment and safety laws and regulations.

By allowing federal agencies to require PLAs, non-union contractors and subcontractors are effectively removed from bidding on large federal construction projects. The Executive Order states a contractor or subcontractor is not required to enter into a collective bargaining agreement; however, they must comply with all aspects of the PLA entered into by other parties. Thus, non-union contractors are effectively removed from these projects.

Moreover, this Executive Order not only applies to future large-scale constructions projects, but also to when agencies are "obligating any funds" pursuant to a current contract, which may cause the Order to apply to some current projects.

The second Executive Order is entitled "Non-Displacement of Qualified Workers Under Service Contracts." As the title states, it will impact federal contractors of service contracts. This Executive Order states, under a contract that succeeds a contract for performance of the same or similar services at the same location, contractors and their subcontractors must offer employment to those employees, except supervisors and management, of the predecessor contractors. If a contractor is successful in being awarded a federal service contract, it will not be able to decide who it may hire. Instead, the contractor must first offer employment to the current workforce.

The third Executive Order involves a new notice and the removal of an old notice. All federal contractors are now required to post a notice advising employees of their rights to bargain collectively and to be protected in the exercise of those rights. The Secretary of Labor will determine the precise wording of the notice after rulemaking. But, federal contractors will no longer be required to post a notice to employees concerning their right not to join a union and the right to not pay that portion of union dues for non-collective bargaining administrative matters, such as political contributions. The Order does not, and cannot, overrule the Supreme Court's holding in CWA v. Beck, which gives employees the right to opt out of non-collective bargaining administrative matters.

The last Executive Order states the government will treat union avoidance costs as unallowable on contracts awarded on a cost-reimbursement basis. These costs include the cost of hiring legal counsel or consultants, preparing materials, holding meetings and planning meetings concerning union avoidance.

Bruce E. Buchanan is a senior associate in the Labor and Employment and Immigration Sections of King & Ballow. Mr. Buchanan received his law degree from the Vanderbilt University School of Law in 1982 and his undergraduate degree in 1979 from Florida State University. Mr. Buchanan served as senior trial specialist for the National Labor Relations Board for 20 years. He has also served from 1991 to 2003 as Adjunct Professor at William H. Bowen UALR School of Law. Mr. Buchanan represents employers in many areas of labor, employment and immigration law as well as individuals in immigration law.

The Supreme Court addressed the issue left unresolved in Wright v. Universal Maritime Service Corp., 525 U.S. 70, 82 (1998), by holding a provision in a collective-bargaining agreement that clearly and unmistakably requires union members to arbitrate claims arising under the Age Discrimination in Employment Act of 1967 (ADEA) is enforceable as a matter of law. 14 Penn Plaza LLC v. Pyett, 2009 U.S. LEXIS 2497 (April 1, 2009).

In Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991), the Supreme Court confirmed an individual employee’s agreement to binding arbitration of his statutory claims is enforceable. However, in Wright v. Universal Maritime Service Corp., 525 U.S. 70, 82 (1998), the Supreme Court did not reach the issue of whether a provision in a collective-bargaining agreement requiring union members to arbitrate claims arising under the ADEA was also enforceable, because, in that case, the Supreme Court found that waiver was not clear and unmistakable.

Facts and Background
Respondents (employees) are members of the Service Employees International Union (SEIU), which was the exclusive bargaining representative for building-services industry employees in New York City under the National Labor Relations Act (NLRA). The service industry included individuals employed as building cleaners, porters and doorpersons. Petitioners, including 14 Penn Plaza LLC (“Penn Plaza”) and Temco Services Industries, Inc. (“TEMCO”) are members of a multiemployer bargaining association, the Realty Advisory Board on Labor Relations, Inc. (RAB), that engaged in industry-wide collective-bargaining on their behalf with the SEIU. SEIU and RAB embodied their agreement in a collective bargaining agreement (CBA). According to the terms of the CBA, union members were required to submit all claims of employment discrimination to binding arbitration under the grievance procedure set forth in the CBA.

Respondents were directly employed by TEMCO where they worked as night lobby watchmen or in similar capacities for Penn Plaza. In August 2003, Penn Plaza contracted with Spartan Security, an affiliate of TEMCO, a unionized security services company, to provide licensed security guards. Therefore, TEMCO reassigned Respondents to jobs as night porter and light duty cleaners in other locations in the building.

At Respondents’ request, the SEIU filed grievances challenging the reassignments, alleging, in part, Petitioners violated the CBA’s ban on workplace discrimination by reassigning Respondents on account of their age. However, the SEIU withdrew the age discrimination claims from Respondents’ grievances, because the SEIU had consented to the contract for new security personnel at Penn Plaza. In response, Respondents filed a complaint with the EEOC alleging age-discrimination in violation of the ADEA. Those charges were dismissed by the EEOC a month later. Subsequently, Respondents brought suit in federal District Court against Petitioners alleging their reassignment violated the ADEA. Petitioners filed a motion to compel arbitration pursuant to § 3 and § 4 of the Federal Arbitration Act (FAA). When the District Court denied Petitioners’ motion to compel arbitration, Petitioners appealed to the Second Circuit Court of Appeals.

Despite the Supreme Court’s decision in Gilmer, which held that an individual employee, who had agreed individually to waive his right to a federal forum, could be compelled to arbitrate a federal age discrimination claim, the Second Circuit affirmed the District Court. The Court of Appeals cited Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974), in support of its ruling that a collective-bargaining agreement could not waive covered workers’ rights to a judicial forum for causes of action created by Congress. 14 Penn Plaza LLC v. Pyett, 498 F.3d 88, 92 (citing Gardner-Denver, 415 U.S. at 49-51). The Court of Appeals differentiated the Supreme Court’s decision in Gilmer from the present finding that an individual employee would be free to choose compulsory arbitration under Gilmer, but a labor union could not collectively bargain for arbitration on behalf of its members.

Review
The Supreme Court, however, pointed out the facts underlying the Gardner-Denver line of cases were narrow in scope, not having the broad implications asserted by Respondents. The Supreme Court made clear these line of cases did not involve the issue of the enforceability of an agreement to arbitrate statutory claims, but instead involved the quite different issue of whether arbitration of contract-based claims precluded subsequent judicial resolution of statutory claims.

In support of its holding that collective-bargaining agreements to arbitrate ADEA claims was enforceable as a matter of law, the Supreme Court first addressed a union’s authority to negotiate such a provision in a CBA on behalf of its members – that employment-related discrimination claims would be resolved in arbitration; and then whether such authority was limited by the ADEA. The Court found, pursuant to Section 9(a) of the NLRA, unions enjoy broad authority in the negotiation and administration of the collective-bargaining contract. The Supreme Court noted the responsibility of the unions in their representation of their members, and the employers’ responsibility to bargain in good faith with the representatives of the employees. Thus, the Supreme Court found the SEIU and RAB collectively bargained in good faith and agreed that employment-related discrimination claims, including claims brought under the ADEA, would be resolved in arbitration. Importantly, the Court found that this freely negotiated term between the SEIU and RAB easily qualifies as a “condition of employment” that is subject to mandatory bargaining under Section 9(a). The Supreme Court opined “the decision to fashion a CBA to require arbitration of employment-discrimination claims is no different from the many other decisions made by parties in designing grievance machinery.”

Then the Court looked to see whether Congress had otherwise limited the authority under the NLRA and found, upon examination of the NLRA and the ADEA, Congress had chosen to allow arbitration of ADEA claims, and “it must respect that choice.” Since Congress had not terminated the authority provided under the NLRA to collectively bargain for arbitration of workplace discrimination claims, the Court found no legal basis existed for it to strike down the arbitration clause in the CBA that was freely negotiated by the SEIU and the RAB, and which clearly and unmistakably requires members to arbitrate the age discrimination claims at issue.

Despite Respondents’ argument that the arbitration clause was outside the permissible scope of the collective-bargaining process, because of its effects on the individual’s non-economic statutory rights, the Supreme Court pointed out the very reason parties favor arbitration is because of the economics of dispute resolution. The Court then reiterated the rule that courts may not interfere in the bargained-for exchange as judicial nullification of contractual concessions is contrary to what the Court has recognized as one of the fundamental policies of the NLRA.

The Bottom Line
Agreements to arbitrate statutory antidiscrimination claims are enforceable, whether they are signed by an individual employee or signed by a union representative as part of a collective-bargaining agreement. The only requirement for enforceability is that the agreement to arbitrate statutory antidiscrimination claims be explicitly stated in the collective-bargaining agreement. Unless or until Congress amends the ADEA, Title VII or other antidiscrimination statutes to remove this class of grievance procedures from the NLRA’s “broad sweep,” arbitration provisions in the collective-bargaining agreements remain enforceable. Although not sufficiently raised by Respondents, the opinion suggests if the arbitration procedures substantively prevent union members from arbitrating their antidiscrimination claims, an argument arises that the provision may act as an effective waiver of the anti-discrimination claims altogether, which is not enforceable.

Karl Bauchmoyer represents and advises employers on matters involving the ADA, ADEA, Title VII, FMLA, FLSA, OSHA, workers' compensation and related state statutes. He received his J.D. from the University of Mississippi School of Law in 2006 and his undergraduate degree from Illinois State University in 2003. Mr. Bauchmoyer may be reached at kbauchmoyer@fordharrison.com.