The Bureau of Labor Statistics released its annual report on union membership last week.   Like most of these reports in recent years, it was bleak and gloomy news for organized labor.   Private sector union membership continued its downward plummet and now stands at a paltry 6.6%.   This is down from 6.9% last year.   Perhaps, even more troubling for labor unions was the decline in the public sector, normally an area of growth for unions.   There, labor union membership dropped from 37% to 35.9%.   One possible reason for that drop is that the cash-strapped federal, state, and local governments have slashed government jobs under tight budget crunches.

Many reasons have been postulated as to why labor unions keep losing their share of the private workforce.   Unions, of course, point to an “assault” on organized labor by a combination of business groups, Republican politicians, and, even us management-side labor attorneys.   Those groups respond that the reason is labor union’s failure to adapt their messages and ideology to a changing workforce.  Many employers also argue that unions are simply a function of a bygone era.

Either way, this much is clear from the data: organized labor continues to lose its market share.   The most troubling statistics buried in the BLS data is not necessarily the “6.6%” number, as alarming as that is.   Rather, it is the demographic challenge that labor faces with younger workers.   Amongst workers 16 to 24 years old, the unionization rates stands at an abysmally low 4.2%.   For workers 25 to 34, the number is only 9.5%.   Contrast this with workers in the 55 to 64 age bracket, where the number is 14.9%.   If the unionization rate was 14.9% across the board, unions would feel much better about their positions.

In my mind, the lack of an appeal to younger workers is what’s driving labor’s decline.  And should we be surprised?  Think about the typical 25 year old worker now.  This worker is likely very mobile and will switch jobs many times throughout his career.   The worker is also very individualistic.  If he or she is unhappy with their job, they expect to be able to march right into the boss’s office and talk about it.   If he or she discovered that everyone was compensated in the same way, no matter their work performance, they would probably be offended.   What does a labor union, as currently constituted, really have to offer to this person?

Of course, it’s not that younger workers all love their jobs.   In fact talk to most generation Y workers and you are likely to hear them complain and complain about their jobs – usually quite passionately (and in a way that tends to offend their older co-workers).   The problem is that labor unions are not finding attractive solutions to address these complaints.   What if, instead of bargaining over outdated seniority rules that nobody cares about, a labor union fought hard to have employers help their younger workers with student loan payments?   Who knows if it would really work, but it’s obvious what isn’t working – the current union strategy.

Until labor unions figure out a way to solve this deep and systemic problem with younger workers, the 6.6% number is only headed in one direction.

On January 25, 2013, the United States Court of Appeals for the D.C. Circuit held that President Obama’s recess appointments to the NLRB over the past two years are unconstitutional because the appointments did not occur while the Senate was in a formal recess (Republican members of the Senate, during the period that normally would have been a recess, briefly went on the record every few days).   The D.C. Circuit voided the Board’s order in the case before it.   In light of this ruling, parties that have lost NLRB cases after January 4, 2012 (the date of the invalid recess appointments) are likely to obtain relief from these rulings in the D.C. Circuit on this constitutional basis.   We will provide a more in depth analysis of this ruling and its impact on employers in the near future.

With the New Year, we see many lists offering “predictions” about what will happen in 2013 – one of my favorites is the location of the upcoming nuptials between Brad Pitt and Angelina Jolie (an estate in France or a tent in Namibia appear to be the likely contenders).

How about one for labor and employment law?  In 2013 investigations of employee misconduct in unionized workplaces will be less thorough and there will be less of a paper trail documenting the misbehavior of employees who engage in such misconduct.   What a bad way to start the New Year!   This prediction is based on the NLRB’s last major decision in 2012, American Baptist Homes.

Generally speaking, unions have the right to request relevant information about employee disciplinary matters and employers must provide such information.   One bright-line exception was “witness statements.”   In Anheuser-Busch, 237 NLRB 982 (1978), the Labor Board held that when an employer obtains a witness statement as part of an investigation and assures the employee that the statement will remain confidential, the statement need not be turned over to the Union as part of an information request.   The reasoning was that giving the union this information would open the door to harassment, intimidation, and coercion of employees.

In American Baptist Homes, the Labor Board overturned Anheuser-Busch.   American Baptist Homes involved two charge nurses and one CNA who observed a union employee sleeping on the job.   All three were asked to provide written witness statements as part of the investigation.   After reviewing the witness statements, the employer terminated the sleepy employee.   The Union grieved the termination and asked for the witness statements in an information request.   The employer refused, relying on Anheuser-Busch.

The Labor Board decided that Anheuser-Busch was no longer good law and announced a new rule:  witness statements, like other information, must be released to the Union, unless the employer asserts a “legitimate and substantial confidentiality interest.”  This interest must “outweigh the requesting party’s need for the information.”   The burden is on the party asserting confidentiality to establish that interest,   Furthermore, the party asserting such an interest still has a duty to seek an accommodation.  Examples of possible “legitimate and substantial confidentiality interests” with witness statements include “the risk that employees or unions will intimidate or harass those who have given statements, or that witnesses will be reluctant to give statements for fear of disclosure.”

In a fiery dissent, Board Member Brian Hayes argued that employer investigation will be harmed by the Labor Board’s new rule.  Member Hayes said that “full and candid participation” in employer investigations is now,

“more than ever essential to employers challenged with increasing concerns about protecting employees and avoiding liability if they fail to maintain workplace safety or to identify and address workplace violence, bullying, sexual and other types of harassment. If employee witnesses cannot be assured that their statements will remain confidential, they will be reluctant to come forward with information that may be detrimental to their coworkers and avoid participating in the investigation.”

On top of that concern, Hayes rightly points out that the Labor Board’s decision is a classic example of the “right hand not knowing what the left hand is doing.”   After all, EEOC Guidance on employee investigations states that:

  • “An anti-harassment policy and complaint procedure should contain, at a minimum, the following elements . . . Assurance that the employer will protect confidentiality of harassment complaints.”
  • “An employer should make clear to employees that it will protect the confidentiality of harassment allegations to the extent possible.”

According to the NLRB, “assuring confidentiality of harassment allegations to the extent possible” now means – your statement is confidential only to the extent the Union wants it (which it almost always will), only to the extent your employer wants to put up a fight and claim confidentiality (sometimes), and only to the extent the Labor Board decides it must be turned over if the Union decides that it disagrees with the employer’s  confidentiality (given the current Labor Board, the smart money is on always).   If employees know that the statement will not remain confidential, how many of them will really want to aid in an employer investigation and sign their name to a written statement?   That means that employers will probably have fewer witness statements, which is also a bad outcome – having extensive documentation of employee misconduct is one way to avoid allegations that discipline was motivated by a discriminatory or otherwise illegal reason.

The only positive to come out of this case for employers is that because Anheuser-Busch was a long-standing decision and many employers relied on it, the NLRB decided not to apply its new rule retroactively.   As a result, where the employer’s refusal to provide witness statements occurred before December 15, 2012 (the date of the decision), the Labor Board will continue to apply the Anheuser-Busch rule.   If the refusal occurred after that date, the new American Baptist Homes rule will govern.  Of course, given the other implications of the new rule, this is a small consolation.

The Labor Board has released its long-awaited second “Facebook case.”  To nobody’s surprise, the NLRB has largely adopted the ALJ decision that the Facebook postings in question constitute protected concerted activity under Section 7.

In Hispanics United of Buffalo, an employee threatened to report several of her co-workers to management who she felt did not provide timely and adequate assistance to the organization’s clients.   One “criticized” employee learned of this and took to Facebook, where other co-workers chimed in, posting the allegation from the co-worker, criticizing her, defending their job performance, and complaining about working conditions, such as work load and staffing issues.

Most of the Facebook posts were “unprofessional” to say the least – at least one used the F-word, and others insulted the organization’s low-income clients.   The criticized employee who started the conversation, however, never informed the other employees that the original co-worker was going to voice the complaint to management.   After being made aware of the Facebook posts, the employer terminated the “criticized employees,” believing that their Facebook comments constituted harassment of the original co-worker.

The ALJ and NLRB sided with the “criticized employees,” finding that their discussion was protected concerted activity.   The activity was protected because the “employees were directly responding to allegations they were providing substandard service to the Respondent’s clients” and such “criticism” could “negatively impact . . . their employment.”   The postings were concerted because the employees were joining a “common cause” and “taking a first step towards taking group action to defend themselves against the accusation they could reasonably believe . . . was going to [be made] to management.”

In dissent, Board Member Brian Hayes – in one of his last decisions before his term expired on December 16, 2012 – made some compelling points – including that the actions were not concerted because the employee who started the discussion on Facebook failed to tell her co-workers that the original employee was going to complain to management.   Board Member Hayes said that there is a difference between “sharing a common viewpoint and joining in a common cause” and that the employees in question were only “venting to one another in reaction to . . . complaints.   This does not constitute concerted activity under the precedent.”   The majority rejected this view, instead finding that the employee who started the Facebook conversation had the “object of preparing her coworkers for group action.”

Protected concerted activity and social media cases are a major enforcement priority for the Labor Board.   As a reminder, two or more employees have the right to voice complaints about terms or conditions of employment – even on Facebook, with a global audience.   A single employee is also protected if the employee acts on the authority of other employees, seeks to initiate or induce group action, or expresses a concern which is a “logical outgrowth” of other concerns expressed by a group.  The protections afforded by this doctrine apply to both non-union as well as union employees.

Many employers are frustrated by these Labor Board cases involving Facebook, believing that employees now have free reign to criticize them in a way that can impact their reputation.   In the “old days,” protected concerted activity rarely left the shop floor.   To the extent that the employee’s claims were misleading or exaggerations, few people ever knew it.   Of course, Facebook changes all of that and now these same misleading or exaggerated claims can go viral in a matter of hours.

Unfortunately, it appears that the NLRB has little sympathy for this concern.   While the General Counsel, in its Second Report on Social Media, said that it would consider the extent to which the Facebook posts “disparage the employer’s products and services,” before bringing a complaint,  the employees in Hispanics United of Buffalo did not cross the line in the Board’s view – even though many employers would disagree with that position.   For now, employers must take a very cautious approach to issuing employee discipline for Facebook postings, or face the wrath of the NLRB and possible reinstatement and back-pay for any such discipline.

Almost every nonunion company’s employee handbook has the standard clause: employment is at-will.  This indisputably is a permissible term of employment, right?  The answer to that question depends on how the policy is phrased.   According to recent pronouncements from the NLRB, if a “reasonable employee” could read such a policy as making unionization futile, then it is an illegal term of employment under the NLRA.  So, how should you craft your at-will disclaimer to withstand such a legal challenge?

Do not promulgate an at-will disclaimer in which employees agree or warrant that their at-will status cannot be amended, modified, or altered in any way.  According to an Administrative Law Judge,  the disclaimer essentially was a waiver of the employees’ Section 7 right to “advocate concertedly” to change their at-will status.  In the case before the ALJ, although the policy did not expressly target protected concerted activity, nor was it promulgated in response to a union drive, a “reasonable employee” could read the policy this way so it violated the law.

Do make clear that the employee is at-will but that at-will status is subject to modification by certain designated officials, and then only in a signed writing.  The NLRB Division of Advice rejected challenges to two at-will disclaimers because, with this language, “reasonable employees” would understand that their status could change through a collective bargaining agreement signed by a designated company official, such as the president.

The NLRB General Counsel’s office has stated that nonunion employee handbooks, including at-will disclaimers, will be scrutinized for labor law violations when claims are filed.  As our prior blog posts have explained, many standard employment policies are being challenged.  Knowing what a company can say – and how to say it – is key to avoiding such challenges, or ending up on the winning end.

Human resources personnel recognize that they are usually not the decision-maker when it comes to employment decisions about other employees – rather, the decision-makers typically are those in the employees’ direct chain of command.  Courts have generally held that inappropriate remarks by non-decision-makers are not direct evidence of discrimination.  As noted by the federal district court in Madigan v Webber Hospital Assoc., however, there may be an exception for HR directors/managers.

In that case, a four-member radiology group was fired from a hospital when the hospital replaced them with another group.  All four members applied for employment with the new group, and three were hired.  The HR director for the new group repeatedly told the final applicant that he was “old” and they wanted “a new face” when informing him that the new group was not going to hire him.  Unsurprisingly, the applicant sued for age discrimination.  The court noted that while the HR director was not the decisionmaker, he was the chosen point of contact by the group for the applicant, and it was certainly possible that his comments accurately reflected the reasons for the group’s decision not to hire the applicant.  A reasonable factfinder could conclude that the HR director knew of the group’s reasons and was speaking for the group when explaining to the applicant why he was not being hired.  In the court’s view, based on the comments, the applicant had an “usually strong” claim of age discrimination.

So the lesson for HR professionals is to watch your words carefully!

Most companies know that it is critical to have a harassment policy.  The U.S. Supreme Court has held that an effective harassment policy can help an employer avoid liability, where the policy is communicated to employees but the employees fail to follow the policy’s complaint procedure.  The communication and content of the policy is essential to the employer’s defense, as a federal district court in Colorado recently emphasized in EEOC v The Spud Seller, Inc.   What is effective communication and what is an effective policy depends on the situation, however.  This is a particular concern where at least part of the workforce does not speak English.

In The Spud Seller case, the employer had implemented a sexual harassment policy, shown a video regarding the policy to its employees, and conducted periodic training on the policy.  The plaintiff-employees in the case all had viewed the video and signed an acknowledgement of receipt for the harassment policy.  One might reasonably assume that the employer had taken the appropriate measures to communicate the policy.  However, as the Court noted, there were numerous problems with the policy and its communication to the employees:

  • The employees in question were Spanish-speaking, and there was no evidence that a Spanish translation of the policy had been given to the employees.
  • While the video was in Spanish, it was not necessarily a complete statement of the policy.
  • The persons identified in the policy to receive complaints of harassment were not Spanish-speaking, which meant that these employees had to use an interpreter or request the assistance of a bilingual co-worker, undermining the confidentiality of their complaints.
  • The employee the Company primarily used for communicating with the Spanish-speaking employees, including translating the policy, was the alleged harasser.

This case emphasizes that employers with employees who do not speak English must be particularly careful to ensure that these employees are informed about the harassment policy (and other critical policies), and that these employees have effective and confidential means of reporting violations of such policies.

On October 1, 2012, Maryland’s first-in-the-nation law prohibiting employers from requiring – or even requesting – that employees provide pass codes to personal websites and devices took effect.  Colloquially, this is the “Facebook Privacy Right.”  Employers that fail to hire an applicant or discipline or discharge an employee for refusing to disclose a personal pass code violate the law (although the statute, itself, contains no remedy).Illinois and, most recently,California, have enacted similar laws and legislation is pending in nearly a dozen other states, as well as federally.

What is remarkable is how little evidence there is that employers have actually requested or required applicants or employees to disclose this personal information as a condition of employment.  Indeed, Maryland’s new law does not in any way restrict an employer’s right to “Google” employees or applicants or otherwise scour the web for information on them, although there are good reasons to refrain from such sleuthing.  What an employer knows – the sexual orientation or history of mental illness, for example, of an applicant or employee – may be alleged to be the motive for an adverse action such as a refusal to hire or termination.  That’s a quick ticket to a lawsuit.  Rather, what generated the law was a Maryland Department of Corrections requirement that individuals wishing to be prison guards disclose their Facebook passwords so that the DOC could “vet” them for gang connections.  This was based on the real concern that people with gang affiliations were infiltrating the prison system.  One can fault the DOC for going too far in addressing the problem (and when challenged by the Maryland ACLU, the DOC abandoned the practice).  But, what is not apparent is that this is a widespread problem that required legislative action.

The cure may create more mischief than the perceived ill it was intended to address.  For example, the law prohibits an employer from even requesting a personal pass code, such as in response to allegations of sexual or racial harassment online by one employee of another.  And, while the law quite reasonably does not constrain an employer from demanding pass codes to “non-personal” sites and devices, it does not provide any definition of what would be “personal” as opposed to “business.” If I am permitted to use my personal iPhone for work and I use my account for business-related mischief, is or is this not subject to employer review?  And, what about that company-issued iPad?  If I register it personally with Apple and use cloud storage for work-related documents, does this law limit my employer’s ability to demand the pass code to see what I am up to if it suspects I am up to no good?  All unclear.  And while there is a clause in the law that says it is not intended to prevent an employer from investigating theft of confidential information or trade secrets (something that employers have a right to do without the law), the drafters of the legislation failed to specify that an employer can demand a personal pass code during this investigation.  All of this is why some groups representing the interests of businesses, such as the Maryland Chamber of Commerce, opposed the legislation.  It is not because they are Neanderthals.  It is because they have to contend with the consequences of the laws that are passed, including the costs of litigation to flesh out what the law “really means.”

Do you think it could possibly violate any law to require at-will non-union employees to sign a confidentiality agreement prohibiting disclosure outside the company of information relating to customers, marketing procedures, costs, prices, business plans, computer and software systems, and “personnel information and documents?” If you answered “of course not!” you would be WRONG under the National Labor Relations Act according to the NLRB!

In a September 11, 2012 decision (Flex Frac Logistics, LLC, Case No. 16-CA-027978) the NLRB ruled that this agreement interfered with Section 7 rights under the NLRA. The Board so concluded because the clause prohibiting the sharing of “personnel information and documents” might be read by a “reasonable employee” as applying to a discussion of the terms and conditions of employment with some union representatives who might be in these employees’ future.  The Board stated that it “has repeatedly held that non-disclosure rules with very similar language are unlawfully overbroad.”  It cited a total of two cases for support of this conclusion; one from the 2011 Board with a majority appointed by President Obama, and the other from 2001, whose majority consisted of President Clinton holdovers.

This case illustrates the extent to which the current NLRB will, through a malleable “reasonable employee” standard, invalidate what most employers have long considered standard and reasonable confidentiality rules.   The Board reaches these counter-intuitive conclusions by contending that such rules will chill communications that are deemed to involve “protected concerted activity,” even involving at-will employees who are not union-represented.  Unless and until one of these decisions is taken up on appeal and rejected by a court, employers will have to contend with the impact of these rulings.

The EEOC is suing Freeman, an events marketing company, challenging the legitimacy of the company’s use of criminal background checks in hiring.  Although the company’s screening process applies to all applicants, the EEOC claims the criminal checks have a discriminatory impact on Hispanic, Black and male applicants.  Freeman defends them as job related and consistent with business necessity.

Now, the EEOC will have to explain why applicants for jobs at the EEOC have to undergo background checks that – you guessed it – look at criminal history.  Magistrate Judge Charles B. Day of the U.S. District Court for the District of Maryland refused to grant the EEOC’s motion for a protective order that would have prevented the defendant from deposing an EEOC designee on this and other EEOC practices.  In the decision, Judge Day wrote,

“Plaintiff [EEOC] claims that Plaintiff’s use of credit and criminal histories is not relevant because a business necessity defense ‘is employer and job-specific,’ and Defendant is the employer in question … However, if Plaintiff uses hiring practices similar to those used by Defendant, this fact may show the appropriateness of those practices, particularly because Plaintiff is the agency fighting unfair hiring practices.”

Deposition transcripts are not published except when used in support of a motion.  If, as we anticipate, Freeman files a motion for summary judgment, we will let you know what the EEOC had to say about the government’s use of criminal histories in hiring.