• Violation of NLRA for an employer to interfere with
or restrain employees’ Section 7 rights
– The Board has made it very clear that these
protections apply to both union and non-union
employees
• So why now?
– The Board has an initiative seeking to expand the
application of the Act to more workers
– As union organizing decreases, the NLRB’s focus
will continue to be on expanding the NLRA’s
protections to the non-union workforce
6
Protected Concerted Activity
In determining whether employee activity is
entitled to the protections of Section 7, the Board
looks at the following :
whether the activity is “concerted”;
whether the activity is “for mutual aid or
protection”; and
whether the activity has lost the protection of
Section 7 by reasons of (1) its means or (2) its
objectives.
7
“Protected”
• It must be for the purpose of “mutual aid or
protection.”
– For example: seeking improvements in
wages, benefits, safety, overtime,
assignments, staffing or other terms and
conditions of employment.
– This concept has been broadly interpreted to
cover conduct that has only minimal impact
on the “terms and conditions” of an
employee’s employment.
8
“Concerted”
Two or more employees – usually (but not
always)
Class action lawsuits
Calling a government agency about
safety/working conditions
Filing administrative charges to remedy
sexual harassment
Complaining to the news media or
customers about an employer
9
How Do These Claims Arise?
Cases involving employer policies,
statements and rules. The mere
maintenance of an overly broad rule is
unlawful;
Cases involving the discipline or
termination of employees who claim they
have engaged in protected, concerted
activities; and
Social media cases.
10
The NLRB’s Policy Initiative
• It is unlawful to maintain any rule that would “reasonably tend to chill employees in the exercise of their section 7 rights,” even if the rule is not enforced.
• It is also a separate violation to enforce such a rule against an employee.
• Therefore, unlike the discrimination statutes, there is no requirement of an adverse employment action.
11
No Policy, Rule or Statement
is Off Limits
• Social media/electronic
communication rules
• E-mail rules
• Confidentiality of information and
investigations
• Workplace conduct rules
(cooperation, loyalty, etc.)
• Rules about speaking to the
media
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• “At will” policies
• Class action waivers
• Arbitration provisions
• Chain of command rules
• Rules about off-duty
misconduct
• Rules regulating employee
statements and conduct
• Non-disparagement/gossip
rules
Unlawful Policy, Rules, and
Statements • The Roomstore of Phoenix, LLC, 357 NLRB
No. 143 Written Company-Wide Rules: Example, rules of
conduct prohibit “collusion with another employee in order to violate a company policy.”
Written Rules at a Specific Facility: Example, a memo posted at one of the stores stated: “Absolutely NO confrontations on the floor. Any type of negative energy or attitudes will not be tolerated…if you cannot be a positive part of the team I don’t want you on the team.”
Oral Rules and Threats: Example, a supervisor threatening employees for engaging in “negative” conversations regarding the terms and conditions of employment.
Statements • In Stephens Media, LLC v. NLRB, 677 F.3d 1241 (D.C.
Cir. 2012), the U.S. Court of Appeals for the D.C. Circuit enforced a Board order, holding, inter alia, the Employer enforced an overly-broad ban regarding surreptitious audio recordings. The Employer had suspended three employees for making a recording of a meeting with a supervisor. The Employer argued the making of the secret audio recording was “so fundamentally dishonest and deceitful” that it should be deemed categorically unprotected. The Board disagreed, finding the employees reasonably believed the Employer would violate their rights by refusing to allow them to bring a witness to an interview that would result in disciplinary action. Under these circumstances, the Board held the employees’ decision “to document what they perceived to be a potential violation of employee rights under NLRB v. J. Weingarten” qualified as protected activity. The Court agreed, finding the terminations unlawful.
15
Confidentiality Provisions:
They Come in All Shapes and Sizes • Quicken Loans case: overbroad definition of
“personnel information” in a confidentiality
policy given to mortgage bankers that included:
“all personnel lists, rosters, personal information
connection with an internal investigation to not discuss the matter with their co-workers while the investigation was ongoing.
Board rejected the employer’s argument that the confidentiality rule was justified by its concerns with protecting the “integrity of the investigation.”
Must determine whether in any given investigation “witnesses need protection, evidence [is] in danger of being destroyed, testimony [is] in danger of being fabricated, or there [is] a need to prevent a cover up.”
17
Discipline Cases
The less obvious cases:
Employee is told by a HR representative to
keep a counseling session (not an
investigation) “between us” and then is
disciplined when he discusses it with a co-
worker.
Employee is disciplined for complaining with
her co-workers about her manager’s response
to her concerns about the safety of the
neighborhood in which the workplace is
located.
18
Increase in the Use of Social Media
Employees are talking about their employers online
more frequently.
In response, employers are implementing social
media policies, which outline corporate guidelines
and principles for online communications, including
limitations on release of trade secrets, competitive
information or denigrating the company.
The Board has been closely monitoring cases
involving employee use of social media.
19
NLRB & Social Media In Practice
• Karl Knauz Motors, Inc. (Board Decision).
Board upheld termination because posting photos of an embarrassing and dangerous accident involving a 13 year old with the quote “This is what happens when a sales person…allows a 13 year old boy to get behind the wheel of a 6000 lb. truck…OOOPs!” was not protected.
However, picture mocking hot dog cart at BMW event w/ caption, “No, that’s not champagne or wine, it’s 8 oz. water” was PROTECTED.
Unlawful Policy: “Courtesy is the responsibility of every employee. Everyone is expected to be courteous, polite and friendly to our customers, vendors and suppliers, as well as to their fellow employees. No one should be disrespectful or use profanity or other language which injures the image or reputation of the Dealership.”
20
Language To Avoid
• The AGC’s recent report identifies problematic language for policies and rules. Examples:
– Prohibiting employees’ posts discussing non-public information, confidential information, and legal matters of the employer (without any further clarification of the meaning of these terms).
– Prohibiting employees from harming the image and integrity of the company, making statements which are detrimental to the employer, disparaging or defamatory, and prohibiting discussion of dissatisfaction.
– Prohibiting employees from making posts that are inaccurate or misleading; making offensive, demeaning or inappropriate remarks; instructing employees to use a friendly tone and not engage in inflammatory discussions.
21
Language To Avoid
• Requiring employees to secure permission prior to
posting photos, music, videos, and the quotes and
personal information of others.
• Discouraging employees from “friending” co-workers.
• Prohibiting online discussion with government
agencies concerning the company.
• Encouraging employees to solve work problems in the
workplace rather than posting about such problems
online.
• Threatening employees with discipline or criminal
prosecution for failing to report violations of an
unlawful social media policy.
22
Takeaways
• While more decisions are certain to follow, in the interim, there are some general principals to apply to social media issues that arise in the workplace. You should: – Prohibit vulgar or obscene language, but not disparaging
or derogatory language, about the company or its employees.
– Include specific examples of prohibited conduct in a policy, so employees will be less likely to construe the policy as prohibiting or limiting concerted activity.
– Avoid vague or unidentified terms within policies, as any ambiguities will be construed against the employer. The Board noted in the EchoStar decision that an employee should not have to consult a dictionary to understand an employer’s rules.
(1) no covered entity, or any officer, employee, contractor, subcontractor, or agent of any such company;
(2) may discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment;
(3) because the employee provided information, or caused information to be provided, or otherwise assisted in an investigation regarding any conduct the employee reasonably believed violated:
- 18 U.S.C. § 1341 (fraud and swindles),
- 18 U.S.C. § 1343 (wire, radio, and television fraud),
- 18 U.S.C. § 1344 (bank fraud),
- 18 U.S.C. § 1348 (securities fraud),
- any SEC rule or regulation,
- or any federal law regarding fraud against shareholders.
• Must first file with OSHA
Sarbanes-Oxly Act (SOX)
Civil Whistleblower Protections
47
• In March 2014, the United States Supreme Court held that the SOX
whistleblower provisions of Section 806 apply to employees of privately-held contractors and subcontractors who perform work for public companies.
• The defendant publicly-traded company mutual fund company had no employees and was staffed entirely by contractors provided by privately-owned staffing companies to provide management, investment advisor and accounting functions.
• The plaintiffs were non-employee contractors of the publicly-traded company who alleged their employer retaliated against them for reporting alleged fraud in the publicly-traded company’s financial reports.
• The Supreme Court specifically stated the decision was not limited to the company’s unique staffing model or to allegations of fraud relating to services provided by privately-held company to publicly-held company.
Recent Developments Under SOX
48
• In March 2013, the Third Circuit denied an employer’s petition for
en banc review of the previous panel decision which found that a whistleblower under SOX need only possess a “reasonable belief” that his or her employer violated or may violate the law or Securities and Exchange Commission rules.
• This decision adopted the worker-friendly “reasonable belief” standard first articulated by the Department of Labor’s Administrative Review Board in May 2011.
• The Third Circuit effectively relaxed the pleading standards and rejected a prior standard which held an employee had to show his/her disclosures to supervisors “definitely and specifically” related to an existing violation of the laws under Section 806.
Recent Developments Under SOX
(cont’d)
49
Section 922 of the DFA provides that:
No employer may discharge, demote, suspend, threaten, harass, directly or indirectly, or in any other manner discriminate against, a whistleblower in the terms and conditions of employment because of any lawful act done by the whistleblower:
1. In providing information to the SEC in accordance with Section 922;
2. In initiating, testifying in or assisting in any investigation or judicial or administrative action of the SEC based upon or related to such information; or
3. In making disclosures that are required or protected under SOX, the ’34 Act, 18 U.S.C. 1513(e) [Retaliating against a witness, victim, or an informant] or any other law, rule, or regulation subject to the jurisdiction of the SEC.
• Can file directly in federal court.
The Dodd-Frank Act of 2010 (DFA)
50
• In July 2013, the Fifth Circuit Court of Appeals limited the scope of
the term “whistleblower” under the anti-retaliation provisions of the DFA to apply only to employees who actually report information relating to a violation of securities laws to the U.S. Securities and Exchange Commission.
• The court concluded that the plain language and structure of the statute compelled the conclusion that internal communications alone were not protected.
• This is the first time a federal appeals court has ruled on the issue.
• The ruling is contrary to a number of district court decisions that have held reports to the SEC are not required under the DFA.
Recent Developments Under
Dodd-Frank
51
Under CEPA, a Whistleblower must generally show:
• (1) he/she engaged in a protected activity or conduct;
• (2) the employer knew or should have known of the protected activity;
• (3) the employee suffered an unfavorable personnel action; and
• (4) The protected activity was a contributing factor in the unfavorable action.
Conscientious Employee
Protection Act (CEPA)
52
• Last year, the New Jersey Appellate Division, reversed a trial
court’s decision granting the employer’s motion for summary judgment, holding that that an employee’s job title or employment responsibilities should not be considered outcome determinative in deciding whether the employee has presented a cognizable cause of action under the CEPA.
• The employer had argued based on a 2008 Appellate Division decision that when a plaintiff’s job was to identify safety issues, he could not show he engaged in whistleblowing activity simply by doing his job.
• The Appellate Division, however, disagreed with this analysis noting that this reasoning is inconsistent with CEPA’s broad remedial purposes and did not correctly apply the New Jersey Supreme Court’s construction of the protections afforded under CEPA.
• The New Jersey Supreme Court granted certification in March 2014, and will review this issue.
Recent Developments Under CEPA
53
• In December 2013, the Appellate Division held that an employee who removes or copies the employer’s documents for use in a whistleblower or discrimination case can be prosecuted criminally for theft.
• The plaintiff had filed a complaint against her employer and others alleging various claims, including retaliatory discharge in violation of CEPA.
• During discovery, the employer learned the plaintiff had possession of hundreds of documents, including originals, which contained highly sensitive information, which plaintiff evidently had removed or copied without permission.
• In May 2012, the grand jury indicted plaintiff, charging her with crimes of official misconduct and theft.
• Plaintiff moved to dismiss the indictment arguing she took the documents for a lawful use and that a 2010 New Jersey Supreme Court CEPA case held taking confidential documents to support a civil suit was lawful. The trial court denied the motion.
• On appeal, the Appellate Division upheld the denial of dismissal finding that the decision upon which the plaintiff relied did was not binding on the criminal court.
Recent Developments Under CEPA
(cont’d)
54
• Update and revise compliance policies, procedures, codes of conduct, training programs and related corporate governance structures.
• Establish an anti-retaliation review to mitigate whistleblower claims.
• Assume you are a target and develop an incident response plan now.
• Review the data your business stores and shares with third parties including backup storage and cloud computing. Get rid of what is not necessary.
• Encrypt the data you need to keep.
• Follow safe online practices such as regularly updating firewall and antivirus software on all devices, using strong passwords, avoiding downloading software from unknown sources and practicing safe online banking by only using a secure browser connection.
