The NLRB’s Perplexing Decision On Investigations That Equally Affects Union and Non-Union Businesses

Investigations conducted by internal staff, usually human resources professionals, occur every day in union and non-union workplaces.  The employer has the responsibility to conduct a good faith investigation and reach a reasonable conclusion when a complaint comes forward.  The investigator typically requests that the witnesses interviewed refrain from discussing the subject matter of the investigation with other employees while the investigation proceeds (“the confidentiality admonition”).  Often the investigator explains that talking about the subject of the investigation may taint the memories of the other witnesses, undermine their credibility, and ultimately interfere with the investigation process to reach a fair result.  This confidentiality admonition is standard operating procedure and best practices for the employer.

Now the NLRB has determined that such confidentiality admonitions are unlawful.  This recent holding offers further evidence that the NLRB remains very interested in actively expanding its interpretation of employees’ rights under the law.

Under the NLRA, employees have the right to communicate to co-workers about wages, hours, and other terms and conditions of employment.  These Section 7 rights apply in union and non-union workplaces, even though the majority of non-union employers never give a nanosecond of thought to the application of the NLRA to their workplaces.

On July 30, 2012, in Banner Health Systems, the Board considered the actions of the employer’s human resources consultant who investigated an employee’s complaint about an instrument sterilization procedure at a hospital.  The HR consultant routinely asked employees not to discuss the matter with co-workers while the investigation was ongoing.

The Board found this conduct unlawful.  The Board stated that “to justify a prohibition of employee discussion of ongoing investigations, an employer must show that it has a legitimate business justification that outweighs employees’ Section 7 rights.”  The Board cited an earlier NLRB decision and found the employer has the burden “’to first determine whether in any give[n] investigation witnesses need[ed] protection, evidence [was] in danger of being destroyed, testimony [was] in danger of being fabricated, or there [was] a need to prevent a cover up.”  The Board concluded that the blanket approach used by the HR consultant failed to meet those requirements, determined that the conduct violated the law and ordered the hospital to stop engaging in the conduct.

This is a remarkable and illogical result.  Rather than using the usual and customary practice of requesting confidentiality to protect the integrity of the investigation, the investigator must now undertake a case-specific analysis to determine whether or not there are facts that would lead one to conclude that there is a danger of evidence being destroyed or fabricated and witnesses being compromised.  As any workplace investigator knows, there is always the risk that evidence may be altered and witnesses may collude.  There is no sure manner to preclude such a possibility, but a competent investigator takes the reasonable step to enhance the likelihood that the investigation’s evidence and witnesses will not be compromised by requesting confidentiality during the pendency of the investigation.  This admonition is calculated to protect the rights of all employees, including the complainant or the accused.  Both employees want integrity in the investigation to increase the probability of the investigator arriving at the “correct” factual conclusion.  The employee in the right does not want employees to collude or witnesses to alter evidence; the simple step of the confidentiality admonition helps the process.

The Board’s decision does not reflect the reality of how workplace investigations should be conducted.  Confidentiality is a hallmark of these investigations and needs to be preserved.  Let’s hope that the appellate courts appreciate the negative impact that this decision will have on a company’s ability to competently investigate and resolve a complaint and, as a consequence, overturn this ruling.

- John Baum (San Francisco)

NLRB Approves Of The Use Of Profanity And Harassing Conduct In The Workplace

In the midst of a union decertification campaign, a union supporter made anonymous, vulgar statements about the employer.  On a union newsletter, he wrote “Dear Pussies, Please Read.”  On another union newsletter, he wrote “Hey cat food lovers, how’s your income doing?”  And on a third newsletter, he wrote “Warehouse workers, RIP.”  After receiving complaints from several female employees, his employer learned through an investigation that one male employee had written all of those anonymous comments — in fact, he ultimately admitted doing so.  He was fired and he challenged his termination with the NLRB, claiming that he was fired for engaging in protected, concerted activity.

The Board found that these vulgar and potentially threatening statements were not “so egregious” as to lose protection under the National Labor Relations Act.  In reaching that conclusion, the Board focused on three factors: (1) the writings were made in a work area; (2) they were made during a union campaign; and (3) on one prior occasion, an employee had affixed a sticker to a piece of equipment that said “Don’t be a dick.”  It ordered the employee reinstated with backpay.

The Board acknowledged that the comments were “vulgar” and “demeaning to women,” but apparently gave no weight to that, finding instead that it was “part of the res gestae [the sequence of events] of otherwise protected activity.”  Implicitly, the Board ignored precedent from federal appellate courts chiding it for similar rulings that were found to be “preposterous” and not “reasonably defensible.”

This decision, while likely to be reversed by an appellate court, is notable because it seemingly puts employers in a “Catch 22″ upon receiving complaints about offensive or harassing conduct during an organizing campaign.  Ordinarily, the law would encourage employers to conduct an investigation and discipline those responsible for such conduct, but this decision cautions against that common sense conclusion.

- Dan Handman (Los Angeles)

NLRB Strikes Down Policies Prohibiting Defamatory Statements By Employees And Disclosure of Confidential Information

Under Board precedent, if an employer’s policy proscribing employee conduct is ambiguous, the Board will find it lawful unless one of three conditions apply: (1) the policy was adopted in response to union activity; (2) it has been applied to restrict the exercise of employee’s rights under the law; or (3) employees would “reasonably construe” it to prohibit protected, concerted activity.  In two recent decisions, the NLRB has shown its willingness to strike down virtually any policy with even remotely ambiguous language under the guise that, regardless of context, employees can “construe” an ambiguous word to prohibit them from engaging in protected activities.

In Costco Wholesale Corporation, the Board required an employer to remove a policy which prohibited an employee from making an electronic statement that “damages the Company or  defames any individual or damage any person’s reputation,” finding that it would chill employees from making any type of statement that was critical of the employer.  Instead, it reasoned that the only statements that could be prohibited are those which are “malicious, abusive or unlawful” (of course, defamation is unlawful, so the Board’s decision begs more questions than it answers).

More significantly, the Board ordered the employer to remove a policy which prohibited employees from discussing: (1) “private matters of . . . other employees . . . including sick calls, leaves of absence, FMLA call outs, ADA accommodations, worker’s compensation injuries, personal health information, etc.”; (2) “sensitive information such as membership, payroll, confidential financial, credit card numbers, social security numbers, or employee personal health information”; or (3) “confidential information such as employees’ names, addresses, telephone numbers, and e-mail addresses.”  The Board found that an employee could “reasonably construe” those policies as prohibiting employees from discussing their compensation or other terms and conditions of their benefits.  In so doing, the Board flatly refused to read the supposedly offending words in context with the other words surrounding it, instead finding that if the policy could be read in any possible way to apply to protected activity, it was invalid.

The Board reached a very similar finding in Flex Frac Logistics, LLC, finding that a non-disclosure policy in an employee handbook which prohibited employees from disclosing sensitive information about pricing, business plans, software and the like was overbroad because it also prohibited employees from disclosing “personnel information and documents.”  Under the Board’s reading, an employee could “reasonably construe” that policy to prohibit discussion about wages or other terms and conditions of employment.  Again, the Board refused to read that language in the larger context of the legitimate confidentiality restrictions contained in that policy.

In both of these decisions, the Board gave short shrift to decisions of federal appellate courts finding that policies like this need to be given a “fair reading” in the context of the entirety of their language.  While the appellate courts may ultimately deny enforcement of these decisions, employers would be well-advised to review their policies to determine potential trouble in case the Board reviews them.

- Dan Handman (Los Angeles)

NLRB Decides Its First Social Media Case

Recently, the NLRB has received well-deserved publicity for its decision to prosecute employers for supposedly overbroad social media policies, but until recently, the NLRB itself had offered no opinion on the issue.  Last week, in Karl Knauz Motors, Inc., the Board finally issued a decision in a social media case and, although the employer won, the decision leaves employers with more concern than comfort.

The facts of the case were unusual.  A salesman at a BMW dealership made two troubling posts on his Facebook page.  His first post centered on a client appreciation event sponsored by the dealership.  In his post, the salesman mocked his employer for serving hot dogs, potato chips, cookies and other snacks that he apparently found to be unsophisticated.  His second post involved an accident at a neighboring Range Rover dealership — owned by the same company — where a 13 year old child of a customer accidentally drove a car into a pond.  The salesman posted a picture of the car in the pond and included several mocking comments about the incident.  The dealership fired the salesman for that second post.

Ultimately, the Board found that the second post did not involve protected, concerted activity, because it was not related to the “mutual aid and protection” of his co-workers.  For that reason, the employee’s termination was found to be lawful.

However, the Board made several rulings that are very troubling to employees, particularly its finding that the first post did concern protected, concerted activity.  First, the Board found that in mocking the dealership for the food served, the salesman was acting for the mutual aid and benefit of his co-workers.  To reach that twisted finding, the Board reasoned that the food selection “could have had an effect on his compensation” because:

some customers who were turned off by the food offerings either did not purchase a car because of it or gave [him] a lower rating in the Customer Satisfaction Rating because of it; not likely, but possible.

The Board also condoned the mocking tone of the post, finding that it “did not rise “to the level of disparagement necessary to deprive otherwise protected activities of the protection of the Act.”  In so doing, the Board approved of the “mocking and sarcastic” tone of the e-mail and compared it to other cases where the Board approved of employees referring to supervisors as “a-holes” or a “cheap son of a bitch.”

The Board also decided that the dealership’s “Courtesy” policy was overbroad and would chill protected speech.  The policy stated:

Courtesy: 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 any other language which injures the image or reputation of the Dealership.

The Board found that employees would “reasonably construe” its use of the prohibition on  “disrespectful” conduct and on language that “injures the image or reputation of the Dealership” to include statements of protest about the employer’s policies or treatment of employees.

Although this was nominally a “win” for the employer, this case shows the lengths to which the Board will go in order to protect employees from speaking negatively about their employers, whether on social media or otherwise.  Employers should be cautious when disciplining or terminating employees, especially for comments on social media.

- Dan Handman (Los Angeles)