NLRB Continues Trend to Create a More Business Friendly Environment by Reversing Obama-Era Labor Decisions

Lawyers consulted on various lawsuits.

Photo Credit: istock.com/Morakot Kawinchan

Written by Jonathan Turner and Daniel Innamorati 

In a burst of year-end activity, the National Labor Relations Board (“NLRB”) largely overturned multiple Obama-era labor decisions and returned to long-standing NLRB precedents that favor employer’s property rights and abilities to regulate the workplace.  Here, we will look at these rulings and how they impact federal labor law.

Caesars – Employers may restrict employees’ email use to business purposes

Employees do not have a statutory right under the NLRA to use their employer’s email system or other information technology (“IT”) resources for NLRA Section 7 purposes.  In doing so, the NLRB reversed its 2014 ruling in Purple Communications that held workplace rules prohibiting employee email use for Section 7 activity were presumptively invalid. (Section 7 of the National Labor Relations Act guarantees 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,” as well as the right “to refrain from any or all such activities.”)

The decision, set forth in Caesars Entertainment d/b/a Rio All-Suites Hotel and Casino, 368 NLRB No. 143 (Dec. 16, 2019), reinstates the Register Guard standard, which held that because a corporate email system is the employer’s property, an employer may prohibit non-business email communications, including those protected by Section 7.  However, Caesars adds an exception to Register Guard, under which employees have no statutory right to use employer IT resources except when the employer’s email system is “the only reasonable means for employees to communicate with one another.”

Section 7 applies to all employers—not just unionized ones—Caesars therefore potentially impacts almost every U.S. employer that provides a corporate email system or IT resources.  The key takeaway is employers may promulgate policies prohibiting employees from engaging in any non-work-related use of company email or other IT resources, unless use of the employer’s email system or IT resources is the only reasonable means for employees to communicate with one another.  Policies that are not “facially neutral,” i.e., policies that restrict Section 7 activity on the employer’s email systems or IT resources but do not restrict other non-work-related use of the same—are still likely to draw scrutiny from the NLRB.  Thus, in light Caesars, employers should consider whether they are willing to enforce blanket “business only” policies.

Apogee – Employers can prohibit employees from discussing pending investigations

Employers do not violate Section 7 when they prohibit employees from discussing ongoing workplace investigations.  The decision in Apogee Retail LLC d/b/a Unique Thrift Store, 368 NLRB No. 144 (Dec. 17, 2019) reversed the NLRB’s 2015 ruling in Banner Estrella, which demanded case-by-case determination of whether confidentiality is required in a particular investigation.

The decision in Apogee relied on the balancing test previously set forth by the NLRB in Boeing Co., under which the NLRB must balance a rule’s potential impact on employees’ rights against the employer’s legitimate justifications for with the rule and then categorize the rule in one of three categories corresponding to lawfulness.  Here, the NLRB concluded that rules prohibiting employees from discussing ongoing workplace investigations fall under “Boeing Category One” as lawful to the extent those rules apply only during open investigations.  The NLRB recognized that the confidentiality provisions at issue could interfere with the exercise of Section 7 rights, but found the impact was slight in comparison to the employer’s business justifications, such as protecting employee privacy and ensuring the integrity of investigations.  While the NLRB recognized the potential for substantial or compelling reasons to extend a confidentiality requirement beyond the end of the investigation, it found such rules fell into “Boeing Category Two,” requiring individualized scrutiny.

The Apogee decision means that facially-neutral rules requiring workplace confidentiality during the term of an open investigation are lawful.  In contrast, under the prior decision in Banner Estrella, the burden was placed on the employer to justify its confidentiality rule.  Now the NLRB has approved of such rules without requiring a case-by-case review.  The jury is still out on rules requiring confidentiality with respect to closed investigations, so employers should tailor rules requiring confidentiality to apply only to open investigations.

Valley Hospital – Employers need not collect union dues after CBA expires

Employers have no obligation to continue deducting union dues from employees’ paychecks pursuant to a dues checkoff provision in a collective bargaining agreement (“CBA”) after the CBA expires.  This ruling in Valley Hospital Medical Center, Inc. d/b/a Valley Hospital Medical Center and Local Joint Executive Board of Las Vegas, 368 NLRB No. 139 (Dec. 16, 2019) overruled the NLRB’s 2015 decision in Lincoln Lutheran of Racine and returned to the long-standing Bethlehem Steel standard, which held termination of dues checkoff provisions in an expired CBA was mandatory under Section 8(a)(3) of the NLRA.

Dues checkoff provisions are considered mandatory bargaining subjects under the NLRA; however, the NLRB differentiated dues checkoff provisions from other mandatory bargaining subjects like wages, pension and welfare benefits and working hours, since these latter subjects are part of employment conditions that already exist from the commencement of the parties’ bargaining relationship, whereas a dues checkoff provision is part of a “limited category” of mandatory bargaining subjects “that are exclusively created by the contract.”  Other examples that fall in this limited category include no-strike/no-lockout pledges, arbitration management rights, and union security clauses.  Under this decision, the NLRB restores an economic weapon taken away from employers in Lincoln Lutheran of Racine.  A dues checkoff provision—like no-strike/no-lockout pledges, arbitration management rights, and union security—expires when the CBA expires, and as the NLRB explained, “an employer is free upon contract expiration to use dues checkoff cessation as an economic weapon in bargaining without interference from the Board.”

Overall, a continuation of a trend

These decisions are a largely a continuation of key NLRB rulings from 2019 that focused on the balance between employer property rights and employee rights to engage in concerted activity.  Other notable NLRB decisions from the second half of the year:

  • UPMC et al, 368 NLRB No. 2 (June 14, 2019): an employer does not have to allow non-employees to use its cafeterias or similar public spaces for promotional or organizational activities, and may prohibit union solicitation from their public spaces, absent evidence of inaccessibility or activity-based discrimination.
  • Fred Meyer Stores, Inc. et al, 368 NLRB No. 6 (June 18, 2019): an employer did not violate Section 8 of the NLRA when it instructed union representatives to meet employees in the break room where the union representatives’ actions exceeded the scope of the rights in the parties’ CBA and departed dramatically from their prior practices by sending extra representatives to the store.
  • Bexar County Performing Arts Center Foundation et al, 368 NLRB No. 46 (Aug. 23, 2019): an employer may exclude from its property off-duty, onsite contractor employees engaged in Section 7 activity unless: [1] those employees work “regularly and exclusively on the property”; and [2] the employees “do not have access to reasonable alternative nontrespassory means of communicating their message.”
  • Kroger Limited Partnership I Mid-Atlantic et al, 368 NLRB No. 64 (Sept. 6, 2019): an employer can limit the rights of nonemployee union supporters to access company property that is otherwise open to the public.  However, if an employer permits access to its property to other nonemployees, it cannot discriminate against nonemployee union agents by denying them similar access.  To establish that a denial of access to nonemployee union agents violated the NLRA, the General Counsel must prove that an employer denied access to the nonemployee union agents while allowing access to other nonemployees for activities similar in nature to those in which the union agents sought to engage.

E.A. Renfroe – A word of warning on broadly-worded arbitration clauses

Consistent with the NLRB’s earlier decision in Cedars Sinai Medical Center, employers cannot force employees to sign broad arbitration clauses that require binding arbitration of all employment-related disputes, without a sufficient carve-out for resolving before the NLRB claims arising under the NLRA.

In E.A. Renfroe & Company Inc. and Kimani Adams, 368 NLRB No. 147 (Dec. 16, 2019), the employer discharged an employee who refused to sign an arbitration agreement.  The agreement made arbitration the exclusive arena for resolution of statutory claims under the NLRA, requiring binding arbitration for all employment-related disputes “whether based in…federal statutory law, or any other legal theory.”  While the agreement had a carve-out titled “claims not covered,” it merely excluded claims that “as a matter of law, the parties cannot agree to arbitrate.”  The NLRB found this exclusion clause legally insufficient, “constitute[ing] the type of vague, generalized language that requires employees to meticulously determine the state of the law themselves.”

Even non-union employers, like E.A. Renfroe, should know that their mandatory arbitration clauses continue to draw NLRB scrutiny.  The addition of a clear savings clause providing that employees retain the right to file charges with the NLRB, even if the agreement otherwise includes claims arising under the NLRA within its scope, may help limit or eliminate the potential for NLRB scrutiny.  That said, because arbitration provisions are construed as a whole, it is wise to consult counsel to ensure that arbitration agreements are drafted in line with the law.

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