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Posted by: Greg Grisham on Oct 18, 2017
Dear Section Members,
 
In light of the recent events in the news regarding sexual harassment, TBA Staff Coordinator Wil Hammond and I were contacted by a reporter from The Washington Post who is doing a story on sexual harassment complaints and their impact. As a service to section members, we are sending you the reporter’s name and contact information in case you would like to contact her directly. Her name is Jessica Contrera and her email address and phone number is Jessica.Contrera@washpost.com and 202-334-7544.
 
The reporter indicated that she is hoping to talk with people who have experienced reporting harassment at work, and who are able to talk about what that was like for them. She further indicated that she is interested in talking with a diversity of folks (job, age, race, socioeconomic situation) with a diversity of stories (reports that led to satisfying outcomes, reports that were ignored, and everything in between) as well as those whose job it is to handle these reports, and what it's like to be in that position. She reached out to us in hopes of connecting with section members who may have clients or former clients who might be interested in sharing their story with her.
 
If you would like to contact Jessica please feel free to do so directly at the email address or phone number listed above.
 
Best Regards,
Greg Grisham
Chair TBA Labor and Employment Section
Posted by: Greg Grisham on Aug 22, 2017
As we start the new TBA year, I wanted to reach out to Labor & Employment Section Members to encourage you to become more involved in Section activities and to share any ideas you have on how we can make Section Membership more beneficial. One important way to contribute is to volunteer to write articles for our Section Newsletter, which is published on a quarterly basis.  
 
We are always looking for writers willing to contribute articles to the TBA Labor & Employment Section newsletter. It’s a great way to get published and get your name in print. Our next issue is scheduled to be published during September. You can pick your own topic or our editor, Bruce Buchanan, can propose a topic. Two possible topics without authors are :
 
1) EEOC-OFCCP merger: Should it occur? Is it a wise idea?; and
2) the Trump Administration’s efforts to rescind and possibly revise the Obama Administration’s “Persuader” regulation.
 
If you are interested in writing an article contact Bruce at bbuchanan@sblimmigration.com.
 
In addition to our quarterly newsletter, the Section plans to produce two webcasts this TBA year and will be holding its annual CLE on a date to be determined in late spring. Please feel free to suggest topics for the webcasts and the annual CLE.
 
I look forward to serving as chair of the L&E Section this year and welcome your feedback. You can reach me by email at ggrisham@fordharrison.com or on my direct line 615-574-6707, if you have ideas or suggestions for our Section.
 
Best Regards,
Greg Grisham
Chair, TBA Labor & Employment Section

Posted by: Greg Grisham on Jun 8, 2017

In National Labor Relations Board v. SW General, Inc.[1] the U.S. Supreme Court recently considered the question of whether the acting general counsel of the NLRB had authority to issue an unfair labor practice complaint after being nominated by President Obama to fill the position.

Fact Summary

In June 2010, following the resignation of the NLRB’s general counsel, President Obama directed Lafe Soloman, then-director of the NLRB’s Office of Representation Appeals, to temporarily serve as the NLRB’s acting general counsel. The president relied on the Federal Vacancies Reform Act of 1998 (FVRA) [2], in making the appointment. Soloman met the requirements under the FVRA for the appointment because he held a senior position at the agency. On Jan. 5, 2011, the president nominated Soloman to serve as the NLRB’s general counsel on a permanent basis and submitted his name to the Senate for consideration; however, Soloman’s nomination was not acted on during the 112th Congress. The president resubmitted Soloman’s name for consideration in the spring of 2013, but no action was taken and the nomination was subsequently withdrawn; eventually a new nominee was submitted and confirmed. However, Soloman continued to serve as acting general counsel until the new nominee was confirmed by the Senate.[3]

In January 2013, during Soloman’s tenure as acting general counsel, an NLRB regional director, exercising authority on behalf of Soloman, issued an unfair labor practice complaint against SW General Inc. Thereafter, an administrative law judge found that a violation of the National Labor Relations Act had occurred and the NLRB affirmed the decision. The employer filed a petition for review in the United States Court of Appeals for the District of Columbia Circuit and argued that Soloman had no authority to issue the unfair labor practice complaint once he was nominated by the president to fill the general counsel position. The Court of Appeals agreed holding that Soloman was “ineligible to serve as Acting General Counsel once the President nominated him to be General Counsel.”[4] An appeal to the U.S. Supreme Court followed.

The Supreme Court’s Opinion

The court began its analysis by noting Article II of the U.S. Constitution’s “Advice and Consent” requirements and examining the history of legislation addressing the process of temporarily filing vacancies pending Senate confirmation of the president’s appointments, including the FVRA.The court noted that under Subsection (b)(1) of the FVRA “a person who has been nominated for a vacant PAS office [one requiring president appointment and Senate confirmation] [may not perform] the duties of that office in an acting capacity.”[5] The court held “that the prohibition in subsection (b)(1) applies to anyone performing acting service under the FVRA” and not just to “first assistants performing acting service under subsection (a)(1)” as the NLRB argued.[6] In reaching its conclusion, the court examined the plain language of the statute and rejected the NLRB’s invitation to utilize legislative history.[7] The court considered but rejected the NLRB’s other arguments, including its reliance on practice following the enactment of the FVRA.[8] The court concluded its analysis by noting that once President Obama submitted Soloman’s nomination to the Senate to fill the NLRB general counsel position on a permanent basis, subsection (b)(1) of the FVRA “prohibited him from continuing his active service.”[9] Therefore, the court affirmed the judgment of the Court of Appeals and concluded that Soloman’s service as acting general counsel following his nomination violated the FVRA.[10]

Take-Aways

The Supreme Court’s ruling in SW General (and its earlier decision in NLRB v. Noel Canning[11]) demonstrate the court’s willingness to curb executive overreach when it runs counter to clear constitutional or statutory authority. Moreover, the ruling underscores the importance of raising threshold technical defenses before the agency or lower court, since a failure to do so may result in a waiver of the defense and its non-consideration by the appellate court.

--------------------------

J. GREGORY GRISHAM is a partner in the Nashville and Memphis Offices of Ford Harrison LLP, and focuses his practice on the representation of employers in all aspects of labor and employment law. He received his Juris Doctor (with honors) from the University of Memphis, Cecil C. Humphreys School of Law in 1989. Greg may be reached at ggrisham@fordharrison.com or 615-574-6707.


[1] __ U.S. __, 137 S.Ct 929 (2017).

[2] 5 U.S.C. §3345 et seq.

[3] id.On Nov. 4, 2013, Richard F. Griffin Jr. was sworn in as general counsel of the National Labor Relations. https://www.nlrb.gov/who-we-are/general-counsel/richard-f-griffin-jr

[4] id. at 937-38 [quoting SW General Inc. v. NLRB, 796 F.3d 67, 78 (Cir. D.C.2015)].

[5] id.at 938.5 U.S.C. § 3345(b)(1).

[6] id. at 938.5 U.S.C. § 3345(a)(1).

[7] id. at 938-42.

[8] id. at 942-43.

[9] id. at 944.

[10] id.

[11] 573 U.S. ___, 134 S.Ct. 2550 (2014).

Posted by: Greg Grisham on Feb 22, 2017

By: J. Gregory Grisham*

In Ohio Edison Company; FirstEnergy Generation Corp. v. National Labor Relations Board,[i] the Sixth Circuit Court of Appeals recently considered the question of whether a union official’s “protest” over the employer’s change to an employee-recognition program (ERP) amounted to a request to bargain over the change.

Fact Summary

The ERP was established by FirstEnergy Generation Corp (FirstEnergy or employer) in 1973. The ERP evolved over the years with the awards for employees available at the five, 10 and 15 years of service thresholds. The value of the awards were nomina, amounting to “about five to seven dollars per year of service.”[ii] The ERP had never been the subject of bargaining nor had it been mentioned in a collective bargaining agreement.

In 2012, FirstEnergy experienced a revenue decrease and a drop in its stock price prompting the company to take steps to reduce costs. Some of the cost-cutting measures impacted employees. In September 2012, FirstEnergy’s Director of Labor Relations Eileen McNamara began calling leaders of the local unions, including Herman Marshman, to advise of the changes that impacted bargaining unit employees.[iii] McNamara called Marshman on Sept. 18 and read from a prepared script. McNamara stated, effective Jan. 1, 2013, the company would reduce its 401k matching payments by 33 percent, its retiree life-insurance benefit by 60 percent and cap its educational reimbursement benefit. Finally, McNamara advised that the ERP would provide for an award every 10 years instead of every five. Marshman responded by stating “Oh no you don’t! Again? Now you know I have to file a board charge, honey…. [I] would have to come to Akron [the company headquarters] for this one.”[iv] McNamara emailed her supervisor after the call stating that Marshman “[was] not happy” and expressing her belief that he was “serious” about filing a charge and going to Akron.[v]

Marshman never made the trip to Akron. Rather, he filed an unfair labor practice charge with the National Labor Relations Board, six weeks after he spoke with McNamara, claiming the employer violated Section 8(a)(5) of the National Labor Relations Act by making several unilateral changes without bargaining with the union. The changes referenced in the charge were changes in the 401k matching contribution, future retiree benefits, the educational reimbursement, and the ERP.[vi]

Proceedings Before the Board

The only change that was litigated before the Administrative Law Judge (ALJ) was the change to the ERP. The ALJ found that the ERP was a “mandatory subject of bargaining” under the act and that Marshman’s statements to McNamara amounted to a request to bargain over the proposed change.[vii] The ALJ’s ruling was appealed to the board where (with) affirmed the ALJ’s findings, with one member dissenting.[viii] Thereafter, the employer filed a petition for review and the board filed a cross-application for enforcement with the Sixth Circuit.

Sixth Circuit’s Opinion.

The Court of Appeals first examined the issue of whether Marshman’s comments to McNamara amounted to a request to bargain about the change to the ERP. In deciding this issue, the Sixth Circuit set forth the standard for a request to bargain “[a] request to bargain need follow no specific form or be made in any specific words so long as there is a clear communication of meaning and the employer understands that a demand is being made.”[ix]

The Court of Appeals further stated that “the bargaining representative must do more than merely protest the change; it must meet its obligation to request bargaining” noting the difference between a protest -- “seek change by disapproval” with bargaining, and “seek change by signaling a willingness to offer something in return.”[x]

In addition, the Sixth Circuit found that the Board majority “neglected to consider all circumstances” but instead nearly focused exclusively on Marshman’s comments to McNamara.[xi] The comments made by Marshman were characterized by the Court of Appeals as an expression of disapproval that would only establish “protest.”[xii] However, the key inquiry was whether the comments taken as a whole amounted to a request to bargain, which the Court of Appeals found “ambiguous” but not “clear.”[xiii] The Court of Appeals also rejected the argument that Marshman’s threat to file a board charge and go to Akron amounted to a clear request to bargain.

Moreover, the Sixth Circuit stated that the surrounding circumstances did not support the board majority’s finding noting that the ERP change was small in monetary terms (“less than four dollars per member per year”) and as compared to the other changes announced by McNamara on her call with Marshman.[xiv]  In addition, the fact that the ERP had never been a subject for bargaining further undermined the Board’s finding.

The Sixth Circuit concluded by holding that the record did not support the board majority’s finding that a request to bargain had been made.[xv] Rather, the court adopted the views expressed by the dissenting board member thus granting the employer’s petition for review and denying enforcement of the board’s order.[xvi]

Takeaways

The Sixth Circuit’s ruling in FirstEnergy made an important distinction between a “protest” and a “clear” communication that could reasonably be construed as a request to bargain. The Court of Appeals also stressed the importance of the surrounding circumstances, such as course of dealing, in assessing whether a communication amounted to a bargaining request. Despite the court’s ruling, employers should exercise caution when communicating with union leaders about proposed changes that may implicate mandatory subjects of bargaining.  If unilateral changes are made when a “clear” request to bargain has been made, a potential remedy for the resulting unfair labor practice is an order to the employer to “undo” the change which can be very costly depending on the nature of the change.

_________________________

*J. Gregory Grisham is apartner in the Nashville and Memphis Offices of Ford Harrison LLP and focuses his practice on the representation of employers in all aspects of labor and employment law. He received his Juris Doctor (with honors) from the University of Memphis, Cecil C. Humphreys School of Law in 1989. He may be reached at ggrisham@fordharrison.com or 615-574-6707.


[i] ___ F. 3d ____, 2017 WL 541007 (6th Cir. February 10, 2017) (recommended for publication)

[ii] id. at *1.

[iii] id.

[iv] id.

[v] id.

[vi] id. at *2.

[vii] id.

[viii] id.

[ix] id. [quoting NLRB v. Barney’s Supercenter, Inc., 296 F.2d 91, 93 (3d Cir. 1961)].

[x] id. [citations omitted]

[xi] id. at *3.

[xii] id.

[xiii] id.

[xiv] id.

[xv] id. at *4.

[xvi] id.

Posted by: Greg Grisham on Oct 27, 2016

Labor Board’s Ruling

In Miller & Anderson, Inc.,[i] (“Miller”) the National Labor Relations Board (“Board”), addressed the issue of whether “employees who work for a user employer—both those employees the user alone employs and those employees it jointly employs (along with a supplier employer)—must obtain employer consent if they wish to be represented for purposes of collective bargaining in a single unit, even if both groups of employees share a community of interest with one another under the Board’s traditional test for determining appropriate units.”[ii]  In an earlier decision, Oakwood Care Center, 343 NLRB 659 (2004) (“Oakwood”), the Board held that consent of the user and supplier employer was required to have a single bargaining unit since a unit consisting of employees from two employers constituted a multi-employer unit.  The Oakwood decision overruled M. B. Sturgis, Inc., 331 NLRB 1298, 1304-08 (2000) (“Sturgis”), which had held that consent of the user and supplier employers was not required where the employees share a community of interest. 

The Board in Miller overruled Oakwood and returned to the standard established in Sturgis which is “[e]mployer consent is not necessary for units that combine jointly employed and solely employed employees of a single user employer.”[iii] Rather, the Board “will apply the traditional community of interest factors to decide if such units are appropriate.”  Sturgis, 331 NLRB at 1308.[iv]  The Board further stated that representation “petitions that seek units composed only of the employees supplied to a single user, or that seek units of all the employees of a supplier employer and name only the supplier employer” are also permissible under National Labor Relations Act (“Act”).[v]

Board’s Reasoning

The Board began its analysis by reviewing the text of the Act and concluded that the Act does not compel the holding in Oakwood that the consent of the user and supplier employers is required. Thus, the Board concluded that it had the authority to adopt the interpretation set forth in Sturgis that it believed “better serves the purposes of the Act.”[vi]

Next, the Board concluded that the standard set forth in Sturgis was consistent with Section 9(b) of the Act which gives the Board the authority to determine the “unit appropriate for collective bargaining [which] shall be the employer unit, craft unit, plant unit, or subdivision thereof…to assure to employees the fullest freedom in exercising the rights guaranteed” by the Act.[vii] The Board noted that “[a]ll the employees in such a unit are performing work for the user employer and are employed within the meaning of the common law by the user employer” and the user and supplier employer are joint employers of a portion of the unit employees.[viii] Further, the Board distinguished the situation from a “traditional multi-employer bargaining situation.” For example, in multi-employer bargaining situations “the employers are entirely independent businesses, with nothing in common except that they operate in the same industry… [t]hey are often in competition for work with each other, operate at separate locations on different work projects, and hire their own employees.”[ix]

The Board continued its analysis by concluding that the Sturgis standard better effectuates the “[f]undamental [p]olicies of the Act” in contrast to the Oakwood standard. Under the Sturgis standard, “employees [are] free to choose the unit they wish to organize, provided their desired unit is appropriate under the Board’s traditional test for determining unit appropriateness” be it a unit composed of jointly employed employees and employees solely employed by the user employer or a separate unit “if they would prefer to do so.” [x] The Board stated that the Oakwood standard “[r]equiring employees to obtain employer permission to organize in such a unit is surely not what Congress envisioned when it instructed the Board, in deciding whether a particular bargaining unit is appropriate, ‘to assure to employees the fullest freedom in exercising the rights guaranteed by th[e] Act.’”  29 U.S.C. §159(b).” [xi] The Board further noted that the Oakwood standard “also potentially limits the contingent employees’ opportunity for workplace representation.”[xii]

Finally, the Board rejected the policy arguments raised against the Sturgis standard finding them “unpersuasive.” Arguments advanced against the Sturgis standard were that it “hinder[ed] meaningful bargaining, threaten[ed] labor peace, and harm[ed] employee rights.” [xiii] The Board reasoned that the standard adopted by the Board in Sturgis had been applied without difficulty for decades and there was no evidence that difficulties arose in the years between the Sturgis and Oakwood decisions. In addition, the Board reasoned that a user employer would have no greater bargaining obligation under the Sturgis standard, since “its bargaining obligation extends only to the employees it jointly employs and only with respect to such terms and conditions which it possesses the authority to control.”[xiv] Moreover, the Board stated that federal appellate courts have approved the placement of joint employees and solely employed employees in a single unit rejecting arguments that such an arrangement is “inimical to effective collective bargaining.” [xv] The Board dismissed claims that a return to the Sturgis standard “will encourage a tyranny of the majority over minority interests” noting the requirement that a “community of interest” first be established and the union’s “duty to fairly and in good faith represent the interests of all the unit employees, including in collective bargaining.”[xvi]

Take Aways

The Board’s return to the Sturgis standard will no doubt make it easier (and more attractive) for unions to organize a single bargaining unit composed of jointly employed employees and employees solely employed by the user employer. With the contingent US workforce estimated at 60 million and growing [xvii], employers and staffing agencies should revisit existing contractual arrangements and practices to account for the potential risks created by the Board’s re-adoption of the Sturgis standard.


*J. Gregory Grisham is a Partner in the Nashville and Memphis Offices of Ford Harrison LLP and focuses his practice on the representation of employers in all aspects of labor and employment law. He received his Juris Doctor (with honors) from the University of Memphis, Cecil C. Humphreys School of Law in 1989. Greg may be reached at ggrisham@fordharrison.com or 615-574-6707.


[i]364 NLRB No. 39 (2016)

[ii]id. at p. 1.

[iii]id. at p. 2.

[iv]id.

[v]id.

[vi]id. at p. 6.

[vii]id. See also 29 U.S.C.§159

[viii]id. at p. 6.

[ix]id.

[x]id. at p. 8.

[xi]id.

[xiii]id. at p. 10.

[xiv]id. at p. 11.

[xv]id.

[xvi]id. at p. 12.

Posted by: Greg Grisham on Jul 21, 2016

On March 24, 2016, the United States Department of Labor (“DOL”) issued its final “Persuader Rule”[i] which has significant potential ramifications for labor attorneys, labor consultants and employers.

Background

The Labor-Management Reporting and Disclosure Act of 1959 (“LMRDA”)“requires labor organizations, consultants, and employers to file reports and disclose expenditures on labor-management activities.”[ii]The LMRDA requires labor organizations to report certain financial information, including information on how much the union spends on organizational campaigns. The law also imposes on employers “who hire labor relations consultants to persuade employees one way or another on organizing and bargaining issues, [to] report these relationships, including how much they spend on these activities (LM-10 Report).”[iii]Labor consultants (including labor attorneys) who engage in activities covered by the Rule are likewise required to file reports with DOL (LM-20 and LM-21 Report).

The LMRDA also provides that employers do not have to file reports when they hire a consultant simply to get “advice.” The DOL’s former “Persuader Rule” defined “advice” to include “indirect” persuasion which exempted most consultant activities that did not involve direct contact with employees.[iv]

Updated “Persuader Rule”

The updated Persuader Rule expands the reporting obligations and “requires employers and their hired consultants to report when the consultants directly persuade workers or when the consultants engage in one of the following four categories:
1) Plan, direct, or coordinate managers to persuade workers;
2) Provide persuader materials to employers to disseminate to workers;
3) Conduct union avoidance seminars; and
4) Develop or implement personnel policies or actions to persuade workers.”[v]

The Rule lists several examples of previously exempted indirect consultant conduct that will now implicate the Rule’s reporting requirements for employers and their consultants. These include activities that are typically conducted by labor attorneys during union campaigns such as “planning or conducting employee meetings; training supervisors or employer representatives to conduct meetings; coordinating or directing the activities of supervisors or employer representatives; establishing or facilitating employee committees; drafting, revising or providing speeches; developing employer personnel policies designed to persuade employees; and identifying employees for disciplinary action, reward, or other targeting.”[vi]The updated Rule requiring disclosure for indirect activities represents a dramatic break from DOL’s 50 plus years of interpretation of the LRMDA’s advice exemption.

The updated Persuader Rule continues to exempt agreements by which the consultant agrees to provide “advice” to the employer, which is defined as “recommendations regarding a decision or course of conduct.” The Rule also exempts any agreement that involves only the provision of legal services.[vii]

The DOL takes the position that the updated Rule does not affect the attorney-client privilege, since it “only requires the disclosure of the identity of the client, the fee arrangement, and scope and nature of the persuader agreement in cases where the consultant has agreed to provide services other than legal services – specifically, to take action with the intent to persuade employees regarding union representation or collective bargaining” which the DOL asserts is not privileged. [viii] Section 204 of the LMRDA exempts attorneys from including in any report required to be filed pursuant to the provisions of Act “any information which was lawfully communicated to such attorney by any of his clients in the course of a legitimate attorney-client relationship.”[ix]

When Effective but Enjoined

This rule took effect on April 25, 2016 and is applicable to arrangements, agreements, and payments made on or after July 1, 2016.[x] However, on June 27, 2016 a Texas federal judge issued a lengthy order granting a preliminary injunction. “Under the order, the Labor Department is prohibited from implementing the rule, which forces employers to report any ‘actions, conduct or communications’ undertaken to ‘affect an employee's decisions regarding his or her representation or collective bargaining rights,’ until the case is settled by the courts.”[xi]
Additionally, on April 18, Rep. Bradley Byrne, R-Ala., introduced a Resolution of Disapproval (H.J. Res. 87) under the Congressional Review Act to repeal the rule which was approved by the House Committee on Education and the Workforce on May 18 by a 21-10 margin.[xii]

Take Aways

While a recent District Court decision has for the moment enjoined DOL’s enforcement of the Rule, a lengthy legal battle will likely ensue. Efforts in Congress to repeal the Rule are also ongoing. In addition, the outcome of the November Presidential election could derail the Rule. Despite DOL’s assertions to the contrary, the agency’s updated Persuader Rule represents a significant intrusion into the relationship between employers and their legal advisers and the attorney-client privilege, which must be guarded zealously by attorneys impacted by the Rule.
___________________
*J. Gregory Grisham is a Partner in the Nashville and Memphis Offices of Ford Harrison, LLP and focuses his practice on the representation of employers in all aspects of labor and employment law. He received his Juris Doctor (with honors) from the University of Memphis, Cecil C. Humphreys School of Law in 1989. Greg may be reached at ggrisham@fordharrison.com or 615-574-6707

_________________________
[i]29 C.F.R. Part 405 and 406. http://webapps.dol.gov/federalregister/PdfDisplay.aspx?DocId=28838
[ii]DOL Overview/Summary, https://www.dol.gov/olms/regs/compliance/ecr/Persuader_OverviewSum_508_2.pdf
[iii]Id.
[iv]DOL Overview/Summary at 1-2.
[v]Id. at 2.
[vi]Id.
[vii]DOL Overview/Summary at 2.
[viii]Id.
[ix] https://www.dol.gov/olms/regs/statutes/lmrda-act.htm
[x] https://www.dol.gov/olms/regs/compliance/ecr_finalrule.htm
[xi] http://thehill.com/regulation/court-battles/285042-texas-judge-temporarily-blocks-dol-union-persuader-rul
[xii] http://nlpc.org/stories/2016/06/29/dols-persuader-rule-unpersuasive-boost-union-organizing

Posted by: Greg Grisham on Apr 5, 2016

*By J. Gregory Grisham

On Dec. 24, 2015, the NLRB (“Board”), in Whole Foods Market Group Inc., in a 2 to 1 decision, held that two company rules which prohibited workplace recording by employees without prior approval by management were unlawful under the National Labor Relations Act (“Act”).[i]

Background

The Respondent (“Whole Foods”) maintained a General Information Guide (“GIG”) that it issued to employees companywide.[ii] Among the rules contained in the GIG were two rules that restricted workplace recording by employees. The rules were set forth in two sections of the GIG.The first rule under the subheading “Team Meetings” stated:[iii]

In order to encourage open communication, free exchange of ideas, spontaneous and honest dialogue and an atmosphere of trust, Whole Foods Market has adopted the following policy concerning the audio and/or video recording of company meetings:

It is a violation of Whole Foods Market policy to record conversations, phone calls, images or company meetings with any recording device (including but not limited to a cellular telephone, PDA, digital recording device, digital camera, etc.) unless prior approval is received from your Store/Facility Team Leader, Regional President, Global Vice President or a member of the Executive Team, or unless all parties to the conversation give their consent. Violation of this policy will result in corrective action, up to and including discharge. Please note that while many Whole Foods Market locations may have security or surveillance cameras operating in areas where company meetings or conversations are taking place, their purposes are to protect our customers and Team Members and to discourage theft and robbery.

The second rule under the heading “Team Member Recordings” stated:[iv]

It is a violation of Whole Foods Market policy to record conversations with a tape recorder or other recording device (including a cell phone or any electronic device) unless prior approval is received from your store or facility leadership. The purpose of this policy is to eliminate a chilling effect on the expression of views that may exist when one person is concerned that his or her conversation with another is being secretly recorded. This concern can inhibit spontaneous and honest dialogue especially when sensitive or confidential matters are being discussed.

At the hearing before the Administrative Law Judge (“ALJ”), Whole Foods presented testimony from its global vice president for team member services, Mark Ehrnstein, who explained the rules scope and the business purpose for the rules which had been in effect since 2001. Mr. Ehrnstein testified that the rules applied to all types of recording devices, to both employees and managers, and to all areas of every store and store property. Ehrnstein further “testified that an employee on worktime [was] precluded from recording a conversation without prior management approval, regardless of whether the employee [was] engaged in protected concerted activity.”[v] In addition, Ehrnstein set forth the underlying purposes for the no recording rule. One purpose was to prevent employees from being “chilled” in freely expressing their opinions during company meetings, including at the “town hall” meetings held by regional management. Another purpose was to promote free discussion during appeals of termination decisions by employees to a panel of their peers. Finally, Ehrnstein testified that the rule promoted “open dialogue” during meetings at which employees request assistance from the company’s “Team Member Emergency Fund” since such “matters are often confidential, involving financial need, family death, illness or personal crisis.”[vi]

The ALJ ruled that the no recording rule did not violate Section 8(a)(1) of the Act finding that “rule did not explicitly restrict Section 7 activity because it ‘does not prohibit employees from engaging in protected, concerted activities, or speaking about them,’ and because “[m]aking recordings in the workplace is not a protected right.’ The ALJ also noted “that the General Counsel did not allege that [Whole Foods] had promulgated the rule in response to union activity or that the [the company] had applied it to restrict the exercise of employees’ Section 7 rights.” The ALJ “further found that the rule ‘cannot reasonably be read as encompassing Section 7 activity.’”

Board’s Decision

The Board majority disagreed with the ALJ and found that the no recording rule “would reasonably be construed by employees to prohibit Section 7 activity.”[vii] The Board began its analysis by noting that “[p]hotography and audio or video recording in the workplace, as well as the posting of photographs and recordings on social media, are protected by Section 7 if employees are acting in concert for their mutual aid and protection and no overriding employer interest is present.”[viii] The Board cited several examples of protected conduct that involve use of workplace recordings including “recording images of protected picketing, documenting unsafe workplace equipment or hazardous working conditions, and documenting and publicizing discussions about terms and conditions of employment.”[ix] Further, the Board noted that its case precedent had many examples where recordings served as critical evidence in proving violations of the Act. Therefore, the Board reasoned that case law supported “the proposition that photography and audio and video recording at the workplace are protected under certain circumstances.”[x]

Turning to the rules at issue, the Board noted that the rules did not differentiate between workplace recordings protected by Section 7 of the Act and unprotected recordings, but rather prohibited all recording without prior management approval. The Board rejected the argument that the explanation for the rule set forth within the rule cured its overbreadth. Because of the admitted scope of the rules and their “broad and unqualified language, the Board found “that employees would reasonably read the rules as prohibiting recording activity that would be protected by Section 7… and that the rules would reasonably chill employees in the exercise of their Section 7 rights.”[xi] The Board majority concluded its analysis by distinguishing a prior Board decision, Flagstaff Medical Center,[xii] where a no recording rule was upheld based on patient privacy interests and the employer’s obligations to comply with HIPAA.[xiii]

Take Aways

The Board’s decision in Whole Foods is another example of the current Board’s willingness to invalidate longstanding employer work rules that are viewed as potentially posing an obstacle to the exercise of Section 7 rights. After the Board’s decision in Whole Foods, rules placing blanket prohibitions on workplace recording will likely be found to violate the Act outside work environments where statutorily protected privacy interests are found such as in healthcare settings. With the current Board, employers must continue to review handbook rules and policies in light of evolving case law and make modifications where necessary to achieve compliance with the Act.

_________________________

*J. Gregory Grisham is a Partner in the Nashville and Memphis Offices of Ford Harrison, LLP and focuses his practice on the representation of employers in all aspects of labor and employment law. He received his Juris Doctor (with honors) from the University of Memphis, Cecil C. Humphreys School of Law in 1989. Greg may be reached at ggrisham@fordharrison.com or 615-574-6707.


[i] 363 NLRB No. 87, at p. 1 (2015)

[ii] Id.

[iii] Id.

[iv]Id.

[v] Id.

[vi] Id.

[vii] Id. at p. 3.

[viii] Id. citing Rio All-Suites Hotel & Casino, 362 NLRB No. 190, slip op. at 4 (2015).

[ix] 363 NLRB No. 87, at p. 3.

[x] Id.

[xi] Id.

[xii] 357 NLRB No. 65 (2011), enfd. in relevant part,715 F.3d 928 (D.C. Cir. 2013).

[xiii] 363 NLRB No. 87, at p. 4-5.


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