As the US remains deadlocked over new legislation affecting the framework of its federal employment law, John Sander of Jackson Lewis takes a look at recent developments in the country and the central role played by the National Labor Relations Board in the enforcement of existing statutes.
One of the many ramifications of divided government in the United States has been a continuing deadlock preventing any significant statutory changes in the framework of US labour law. At the same time, the National Labor Relations Board (NLRB), the agency charged with interpretation and enforcement of US labour statutes, has been active in promulgating rules and guidances which have potentially far-reaching impact on union and non-union employers alike. The most important developments include, first, a new rule designed to shorten the timeline for union elections and minimise pre-election litigation, referred to in distinctively American shorthand as the “quickie election” rule; and second, new guidance designed to assist employers in drafting and revising personnel policies to avert what the Board considers to be violations of the National Labor Relations Act, 29 USC 151-169 (the Act).
A central feature of collective labour relations in the United States is the union representation election, whereby employees in a defined bargaining unit decide by secret ballot whether to be represented by a trade union. If employees vote in favour of representation, the union becomes the exclusive bargaining agent with the employer. The election process is supervised by the NLRB.
Controversy has long surrounded the length and complexity of the election process, the median duration of which is currently 37 days with no NLRB hearing required, or 59 days with a hearing.
From the employer’s perspective, a longer process is better because the employer has greater opportunity to educate employees concerning the pros and cons of collective bargaining generally as well as representation by the particular union. Labour interests, on the other hand, argue that the complexity of the process enables employers to create unnecessary delay and gain an advantage in the election.
On 12 December 2014, the NLRB issued its Rule on Representation-Case Procedures (79 FR 74307, amending 29 CFR 101-03), widely referred to as the “quickie election” rule. The new rule would shorten the path to an election by condensing timelines and deferring issues currently litigated pre-election to the post-election period. Significant changes from current practice include:
• Representation petitions are served directly on the employer instead of through the NLRB; hearings will be scheduled within eight days of the petition filing;
• disputes over bargaining unit composition or voter eligibility (based, for example, on the employees’ supervisory or temporary status) may be deferred to post-election litigation;
• extensive employee-related disclosures and a detailed statement of position are required of the employer within seven days of the petition;
• hearings are limited to issues raised in the statement of position, appeals from rulings by the hearing officer and Regional Director are limited, and there is no right to file a post-hearing brief; and
• post-election objections must be filed within seven days of the election, with a hearing (if necessary) held within 21 days of the election.
These measures are designed to reduce the target election timeline of 42 days under prior NLRB policy to a period of 21 or even 14 days.
The “quickie election” rule has sparked both political opposition and legal challenge. In March 2015, the Republican-controlled Senate and House of Representatives each passed resolutions of disapproval which would result in nullification of the rule. President Obama has vetoed the legislation, however, and there is little prospect that either House of Congress will assemble the two-thirds majority necessary to override the veto. Business interests have also filed court actions seeking an injunction against and ultimate invalidation of the rule.
US employers with workplaces susceptible to union organising activity have always been well-advised to: develop strategic labour relations plans; train management and human resources personnel on labour relations law and election procedures; conduct bargaining unit analyses; and, perhaps most importantly, develop and maintain processes to address workplace issues promptly and effectively. With the new expedited election procedure, advance planning and assessment become all the more important.
Many employers, US and ex-US alike, have tended to view the Act, the key statutory basis of US collective labour relations law, as relevant only to the unionised workforce and have overlooked its impact on non-union employees. On 18 March 2015, the Office of the General Counsel of the NLRB (responsible for enforcing the unfair labour practice provisions of the Act and bringing administrative complaints before the agency) issued a new Report (Memorandum GC 15-04) which highlights the NLRB’s broad interpretation of the Act to impact many common employer handbook policies in the non-union setting.
By way of background, Section 7 of the Act provides non-management employees 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... the right to refrain from any or all of such activities” (29 USC 157). In order to be covered by Section 7, the activity engaged in for “other mutual aid or protection” must be “concerted” and “protected”. For an employee’s action to be “concerted”, he or she must act with, or for the benefit of, other employees. Concerted employee activity ranges from large groups of employees acting together, to one employee acting alone in the interest of other employees. A non-exhaustive list of examples of “protected” activity includes: refusing to work in the face of dangerous working conditions; discussing salary, benefits or job conditions; disseminating communications that are critical of specific managers or company policies; and improving working conditions though assistance of administrative agencies, courts, or legislators.
Handbook provisions may violate the Act if they contain rules that would “reasonably tend to chill employees in the exercise of their section 7 rights”, even if the rule is not enforced (Lutheran Heritage Village-Livonia, 343 NLRB 646, 646 (2004)). In the clearest circumstance, a rule is unlawful if it explicitly restricts activities protected by Section 7. But even if the rule does not explicitly restrict activities protected by Section 7, the NLRB may find a violation upon a showing of one of the following: employees would reasonably construe the language to prohibit Section 7 activity; the rule was promulgated in response to union activity; or the rule has been applied to restrict the exercise of Section 7 rights.
While conceding that “most employers do not draft their employee handbooks with the object of prohibiting or restricting conducted protected by the… Act”, the General Counsel Report provides guidance for employers wishing to avoid well-intentioned violations of the Act. What has been eye-opening to many employers is the NLRB’s interpretation of some of the most common handbook provisions as violative unless carefully drafted to avoid potential interpretation restricting concerted protected activity.
An important example is the standard confidentiality provision in many handbooks intended to protect against unauthorised dissemination of the employer’s proprietary information. Unlike in many civil law countries where confidentiality is more grounded in statute and simple contract provisions, protection of confidential information in the United States is based primarily on specific and detailed handbook provisions, policies, and separate confidentiality agreements, all of which tend to be drafted in careful, even legalistic, all-encompassing language. Indeed, such specificity is highly advisable to support a claim for injunctive relief or damages in the US where the employee violates a confidentiality restriction.
At the same time, a comprehensive confidentiality restriction may run afoul of the NLRB’s interpretation of the Act, particularly where employee-related information is concerned. Consider for example a handbook provision which states, “Do not discuss customer or employee information outside of work, including phone numbers and addresses”. This likely seems completely benign to many employers outside the US, even obvious and necessary to those living in the EU or other jurisdictions protective of data privacy. Yet in the view of the general counsel, the reference to “employee information” could reasonably be construed by employees as preventing the discussion of employees’ wages and other terms and conditions of employment, an exercise of protected concerted activity. Similarly, an admonition to “never publish or disclose the Employer’s or another’s confidential or other proprietary information” or not to “discuss work matters in public places” – without further clarification – could in the general counsel’s view chill discussion of terms and conditions of employment.
On the other hand, the general counsel’s guidance upholds a variety of confidentiality rules which do not refer to employee information or terms and conditions of employment. Thus there is no problem with handbook rules stating “no unauthorised disclosure of business secrets or other confidential information” or “do not disclose confidential financial data, or other non-public proprietary company information”. And, in a formulation which employers may find difficult to apply, the guidance approves a broad “prohibition on disclosure of all information acquired in the course of one’s work” – seemingly at odds with the guidance’s principle of averting restrictions which could sweep in employee wages and other terms and conditions of employment – because the particular handbook in question included the language in question among rules relating to conflicts of interest and legal/regulatory compliance, which narrowed the context.
One of the many troubling aspects of the discussion on confidentiality provisions is whether employee information can ever be protected as “confidential”. A context in which this becomes important is, for example, where former employees exploit previous access to talent management data and personnel succession inventories to lure valuable employees away from the employer. An employee non-solicitation clause mitigates this risk, and in addition a well-drafted post-employment restriction on use of employee information should not run afoul of the general counsel guidance as it is directed at post-employment activities rather than activity in the workplace.
Another concept surprising to some employers is that general civility rules can be deemed overbroad if interpreted to ban criticism or protests regarding treatment by supervisors, managers, or the employer. “Be respectful to the company, other employees, customers, partners, and competitors” or “do not make fun of, denigrate, or defame your co-workers, customers, franchisees, suppliers, the company, or our competitors” may seem unexceptionable, but the NLRB has found them overbroad in that employees could reasonably construe them to prohibit protected activity. On the other hand, it is permissible to require that employees work cooperatively with each other and with management, cooperate with investigations, and refrain from truly insubordinate conduct. Again, context is important in the NLRB’s analysis: compare “disrespectful conduct or insubordination, including, but not limited to, refusing to follow orders from a supervisor or a designated representative” (overbroad in the NLRB’s view) with “being insubordinate, threatening, intimidating, disrespectful or assaulting a manager, supervisor, coworker, customer or vendor”. The guidance finds the latter appropriate because the otherwise problematic word “disrespectful” is contained in a larger phrase which is focused on serious misconduct.
A routine provision in many employer handbooks is the rule controlling contact with the media concerning business matters. The key distinction the general counsel draws here is between rules which define that only certain employees are authorised to speak on behalf of the employer (permissible) and rules which could reasonably be construed to prevent the employee from speaking to media on his/her (or other employees’) behalf. Hence, language stating that “associates are not authorised to answer questions from the news media... When approached for information, you should refer the person to... the Media Relations Department” could lead employees to believe that all media contacts are prohibited rather than just inquiries concerning the company’s official position.
Finally, the guidance disapproves the general provision used by some employers which prohibits any employee action “not in the best interest” of the company. It makes clear, however, that more specific conflict of interest policies addressed to employee self-dealing or involvement with competitors, customers, or suppliers are permissible if in context they do not prohibit involvement with labour organisations or other protected concerted activity.
The general counsel’s report is a useful compilation of the NLRB’s approaches to many common handbook provisions, and provides insight into how the NLRB and general counsel view employer policies and how they may be interpreted by employees. From the employer’s perspective, however, there are few bright lines and it remains difficult to isolate particular language to rely upon as lawful. Careful drafting and case-by-case review remain the only true protections against unintentional violation of the Act.
Even without any new legislation at the federal level, both unionised and union-free employers must contend with evolving rules and interpretations that will impact labour relations for years to come.