Public Hears from NLRB's Top Counsel

Although much of a recent webinar was spent reviewing existing cases before the National Labor Relations Board, the presence of the board's general counsel added some fresh insights, with lively counters and questions from an employment attorney.

Wednesday, December 19, 2012
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Perhaps the most newsworthy note about a recent webinar involving Lafe E. Solomon, acting general counsel of the National Labor Relations Board, and Steven M. Swirsky, employment lawyer with Epstein Becker & Green, is that Solomon participated.

Although the Nov. 16 webinar -- hosted by Practical Law Co. -- certainly did not mark the first time the public has heard from the board's chief counsel, it was one of the first in-depth back-and-forth, question-and-answer proceedings involving lawyers representing both sides of the National Labor Relations Act: enforcer and employer. probably few of the more-than 400 human resource executives, employment lawyers and others listening in learned  anything new in the synopses of key cases of concern (most of them still pending in appeals court) -- D.R. Horton Inc. and Michael Cuda, 24-Hour Fitness USA Inc., Banner Health System, American Red Cross Arizona and Costco Wholesale Corp., to name just five -- the discussions that followed shed some interesting light on employers' challenges under the 2012 NLRB and what they can and should be doing in response.

Each of the webinar's four focuses of interest -- class-action waivers in mandatory arbitration agreements, confidentiality instructions during internal investigations, at-will employment statements and disclaimers, and regulating employees' use of social media -- were rife with examples of the two sides' conflicting priorities.

In Horton, for instance, the NLRB decided in January that asking employees to waive their rights to class action by mandating arbitration to settle disputes, and restricting collective action during those disputes, violated Section 7 of the NLRA, which protects employees' rights to take such action to improve their working conditions.

In 24-Hour Fitness, the board ruled -- in a decision supported by the administrative law judge -- that even allowing employees to opt out of such waivers within 30 days after receiving their employee handbooks does not put an employer on the right side of the law. In essence, said Solomon, employees' rights "can't be taken away [with the caveat] that they have to do something to regain those rights."

Yet the real takeaway for employers, Swirsky said, is that "we're not just talking about unionized workplaces or workplaces where unionization is likely [or being voted on], but really every workplace ... anybody who is an employee as defined by the NLRA or anyone who works for an employer covered by the Act."

Nor, he said, does the Horton rule apply to every employee. It, and other rulings like it, "applies to employees; it doesn't apply to supervisors, managers -- including executives -- so we're not talking about a complete and utter prohibition" on requiring individual arbitration and disclosure restraints.

"That's the other big takeaway," he said. "Who is being required to arbitrate [and who isn't]?" In the employer community, he added, "there's concern over how far you can go with this."

In the case of Banner Health System, a worker interviewed during an employee-complaint investigation was told not to discuss the case with anyone else at Banner. The NLRB ruled that such a mandate violated the worker's right to protected concerted activity.

What's "important to remember here," said Solomon, "is that this rule is not new" and if an employer can justify such a mandate using any of four principles -- the need to protect the witness, the likelihood that evidence may otherwise be destroyed, the threat to subsequent testimony or the need to prevent a cover-up -- "the board will uphold an employer's right to such confidentiality."

In Swirsky's estimation, however, "this is something new," as he put it, and will make it more difficult for employers to conduct investigations.

"How is an employer going to proceed?" Swirsky asked. "Will there be a blanket policy? Will they go on just reciting one of these four factors? [When explaining, for legitimate reasons, to people you're interviewing] that they need to keep quiet," he said, "will that be credited?"

There were no answers.

At-will employment statements and disclaimers opened up another Pandora's box: how to word such disclaimers, aimed at protecting employers from wrongful-discharge complaints by employees arguing that the wording in their handbooks or verbal agreements guaranteed them jobs for life.

The American Red Cross case raised a red flag over wording requiring employees to agree that their at-will status, while employed there, would never be changed. "[This] violated Section 7 rights," Solomon said, "because an employee has the right to seek unionization."

Again, Swirsky countered, nuances within the employer community, including how much or how little employees understand about their rights from industry to industry, must be taken into account in these cases -- many of which "have introduced the greatest consternation and confusion among employers."

"Most employees," Swirsky said, "understand that the acknowledgement they sign doesn't mean they can't unionize." So where is the realistic medium between the law and the workplace? Again, no answers.

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Discussion about regulating social-media use and creating social-media policies brought up a host of other issues employers, lawyers and the NLRB are continuing to grapple with -- namely, where an employer's right to protect the business ends and an employee's right to discuss working conditions begins.

"Many of the cases that we were seeing, when we started looking at these, were like Costco Wholesale Corp.," said Solomon, "in which the employer maintains a policy that prohibits employees from electronically posting statements that 'damage the company, defame any individual or damage any person's reputation, or violate the policies outlined in the ... employee agreement.

"We issued complaint[s] on those," he said, "[on the grounds] that they were overbroad and restricted Section 7 rights for employees to talk to [one another] . . . that anything that 'damages' or 'defames' is a very uncertain term for employees and they could interpret that to mean they could not talk to fellow employees . . . about terms and conditions of employment."

The problem is, said Swirsky, that, "while true, the [NLRA] governs protected concerted activity [dating back to] 1935; the Internet was certainly not in the thinking back then."

The problem with translating policies and the need to protect businesses from then to now, according to him, is "we're no longer talking about two individuals or a group of individuals gathering in a discussion about their workplace.

"Really what we're talking about," said Swirsky, "are conversations between two people that are visible to the entire world, accessible to anybody else, irreparable once the comment has been made."

Solomon assured Swirsky and listeners that the NLRB "has always said mere griping is not protected. For us to find concerted activity, we have to find evidence of this concert and whether it's protected," he said. "We also certainly recognize businesses' needs to protect their interests; we're focusing on employers that we think go beyond the law. I think there are pretty straightforward ways for employers to protect their businesses without using these buzzwords of 'disrespectful,' 'defame,' etc."

Bottom line, both agreed, employers need to examine all the language in every policy, statement and disclaimer they disseminate.

"There are ways to lawfully specify workers' rights" and responsibilities," said Solomon.

In fact, Swirsky added, it's "appropriate to regularly look at all types of employer language -- offer-letter language, application language, at-will language -- and [if it] would not pass muster with the board of 2012, best to revise what you're using going forward."

Doing this right, he said, will require case-by-case examinations and looking at "what makes sense for a particular employer and a particular workforce" . . . so long as it follows the letter of the law.

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