On March 18, 2015, the General Counsel for the NLRB issued a new memo providing guidance on common employer rules and policies that run afoul of Section 7 of the National Labor Relations Act. The memo is divided into two parts. In the first, the NLRB compares rules it found lawful with those that are unlawful, and provides its reasoning for both conclusions. The section includes employer rules that are frequently at issue before the agency, addressing issues such as:
The second section of the memo addresses handbook rules from a recently settled unfair labor practice charge against Wendy's International LLC, which followed an initial determination by the NLRB that several of Wendy's handbook rules were unlawful.
Consistently with prior GC memos, the differences between rules and policies the NLRB found lawful and unlawful were not always obvious, or even consistent with each other or past interpretations. Nevertheless, the memo is worth reviewing as a summary of the NLRB's current thinking and should serve as a reminder to employers that, if they have not updated their handbooks in a while, this is a good time to do it.
Employers that take such advice to heart should also keep in mind the NLRB's recent reversal of the longstanding precedent under which employers were permitted to ban employees from using the company's email system for non-business purposes. In Purple Communications, Inc., decided December 11, 2014, the NLRB held that employers given access to the company's email system must be permitted to use the system for communications protected under Section 7 during non-working time, unless the employer can show that special circumstances exist (most will not be able to make the required showing).
You can review our previous coverage of NLRB actions on rules, policies, and settlement terms here and here and here. You can also find more in depth coverage on our website, here (see part 7, Employer Confidentiality Policies Under Attack by Federal Agencies).
California recently became the second state to pass a law acknowledging the problem of workplace bullying. The first state to do so was Tennessee.
Effective January 1, 2015, California’s existing law mandating sexual harassment training for supervisors must include training on the prevention of abusive conduct. For the purpose of the new California law, "abusive conduct" means
conduct of an employer or employee in the workplace, with malice, that a reasonable person would find hostile, offensive, and unrelated to an employer's legitimate business interests. Abusive conduct may include repeated infliction of verbal abuse, such as the use of derogatory remarks, insults, and epithets, verbal or physical conduct that a reasonable person would find threatening, intimidating, or humiliating, or the gratuitous sabotage or undermining of a person's work performance. A single act shall not constitute abusive conduct, unless especially severe and egregious.
Tennessee’s law, passed earlier this year, requires the Tennessee advisory commission on intergovernmental relations (TACIR) to create by March 15, 2015, a model policy for employers to prevent abusive conduct in the workplace. Employers who adopt the TACIR or an equivalent policy are immune from suit for any employee’s abusive conduct that results in negligent or intentional infliction of mental anguish.
Since 2003, 26 states have introduced some version of the Healthy Workplace Bill (HWB), the anti-bullying legislation being promoted by social psychologist Gary Namie and his wife, who was a victim of workplace bullying and, thereafter, suffered from depression. To date, no states have enacted the HWB. However, recognizing the serious harmful effects of bullying, many schools have already implemented anti-bullying policies. It may just be a matter of time before anti-bullying legislation extends to the workplace.
As discussed in our earlier posts (Part 1 and Part 2), the EEOC and NLRB have in recent years targeted employers who impose restrictions on employee speech and conduct that could chill employees' exercise of their rights under the NLRA and Title VII. Whether the courts will agree to invalidate restrictions on employee speech and conduct in the context of settlement agreements is an open question and a matter of concern for employers.
Such restrictions are common in agreements resolving employment disputes. Indeed, many companies would not think of entering into a settlement in which they were not assured that the affected employee(s) would comply with the company’s confidentiality policy, maintain confidentiality of the fact and/or terms of the settlement, and refrain from disparaging the company. While policy considerations associated with settlements are arguably different from those associated with other employment practices attacked by the agencies, the employment rights at issue are largely the same. If the courts embrace the positions held by the EEOC and NLRB, employers may start to see both current and former employees challenge undesirable settlement terms by filing suit or administrative charges, or raising the issue as a defense to enforcement. Either way, if the courts invalidate such terms, employers will have a lot less incentive to settle.
Given the likelihood that agencies will continue to scrutinize both employment policies and settlement terms, employers should review all of their policies and agreements that may impact employees’ exercise of employment rights under the NLRA and Title VII. These can include policies addressing confidentiality, use of the Internet, email, and social media, disparagement, and general conduct policies (e.g., no gossip and professionalism policies) that purport regulate employee speech. Employers will need to balance the risks and benefits of including such terms going forward.
The EEOC’s recent lawsuits against employers described in Part 1 follow the NLRB’s similar attempts in recent years to rein in employer restrictions that could impact employee speech and other employment rights under federal labor law.
The focus of the NLRB and the EEOC has been primarily on invalidating employment policies that might have a tendency to chill employee rights under Section 7 of the NLRA and Title VII, such as broadly-worded confidentiality and social media policies. Section 7 entitles employees to form and join a union, and to engage in organizing, collective bargaining, and other concerted activities for mutual aid and protection. Section 8 of the NLRA prohibits employers from interfering with employees’ exercise of their rights under Section 7.
One such ruling by the NLRB was recently upheld by the Fifth Circuit, which invalidated a fairly standard confidentiality policy. The policy at issue defined “Confidential Information” as including information related to customers, suppliers, distributors; the employer’s management and marketing processes, plans and ideas, processes and plans, financial information, including costs, prices; current and future business plans, computer and software systems and processes; personnel information and documents, and the company’s logos and art work. The policy prohibited employees from sharing Confidential Information outside the organization, or from removing or making copies of any company records, reports or documents without prior management approval. The policy also provided that disclosure of Confidential Information could lead to termination and possible legal action. Although the company’s policy said nothing specific about wages, the Fifth Circuit found that the policy violated Section 8 of the NLRA because employees could interpret the policy as precluding discussions about wages. Thus, it appears that the NLRB’s expansive reading of Section 7 rights may be gaining traction in the courts, at least with respect to employer confidentiality policies.
In our next post we will address the practical implications of federal agency efforts to limit restrictions on employee speech.
The EEOC and NLRB continue to target employers who restrict employee speech and conduct, especially when those restrictions could impact employees’ rights under labor and employment laws.
The EEOC recently filed suit attacking the use of certain terms in employer settlement agreements, this time against CollegeAmerica, a private college based in Salt Lake City. The EEOC alleges that CollegeAmerica conditioned an employee’s separation benefits, among other things, on her promise not to file a complaint or grievance with any government agency or to disparage CollegeAmerica. When the employee filed a charge against CollegeAmerica with the EEOC alleging discrimination and retaliation, College America promptly filed an action against the employee in state court for breach of the agreement.
The EEOC claims that the agreement violates the employee’s right to file charges with the EEOC and that CollegeAmerica’s filed its lawsuit in retaliation for the employee’s filing of the EEOC charge. The EEOC is seeking to recover the employee’s attorney fees incurred in defending the state court action, and for injunctive relief to invalidate the employee’s separation agreement and prevent CollegeAmerica from using the offending terms in its form settlement agreements.
This follows a lawsuit that the EEOC filed in February against CVS Pharmacy, seeking to invalidate settlement terms including confidentiality and non-disparagement clauses, a general release, and a covenant not to sue, among other things. See our earlier coverage of the CVS case here.
Our next post will address similar actions against employers by the NLRB.
The EEOC has filed suit in Chicago against pharmacy giant CVS to stop it from using certain terms in its settlement agreements with employees. The EEOC claims that the company unlawfully violated employees' rights to communicate with the EEOC and to file discrimination charges, in violation of Section 707 of the Civil Rights Act of 1964.
According to the EEOC, CVS conditioned the receipt of severance benefits for certain employees on an overly broad severance agreement set forth in five pages of small print. The agreement purportedly interferes with employees' right to file discrimination charges and/or communicate and cooperate with the EEOC. The terms objectionable to the EEOC include the following:
1. A cooperation clause that requires employees to notify CVS' general counsel upon receipt of a subpoena, deposition notice, or inquiry in connection with a suit or proceeding, including an administrative investigation;
2. A non-disparagement clause prohibiting employees from making statements that disparage the business or reputation of the company, its directors, officers, or employees;
3. A confidentiality clause prohibiting the disclosure of Confidential Information, including personnel data revealing the skills, abilities or duties of employees, wage and benefits structures, succession plans, and information pertaining to affirmative action plans and planning;
4. A general release of claims; and
5. A covenant not to sue that encompasses any claims, actions or proceedings and requires the employees to reimburse the company for any attorney fees incurred as the result of a breach of the agreement. The covenant not to sue contains a qualification explaining that it is not intended to interfere with an employee's right to cooperate with or participate in a state or federal agency proceeding to enforce discrimination laws.
CVS reportedly used the foregoing terms in more than 650 agreements in 2012 alone. All of the foregoing types of clauses are common in employment-related separation agreements, and often provide much of the incentive for employers to enter into such agreements. Consequently, the EEOC's case against CVS is one that employers will want to monitor closely.
A copy of the EEOC complaint is available here.
The National Labor Relations Board (NLRB) announced this week that it will not seek U.S. Supreme Court review of two Court of Appeals decisions invalidating its controversial posting rule. The rule required most private sector employers to post a notice advising employees of their rights under the National Labor Relations Act, including the right to:
Since the initial injunction barring the NLRB from enforcing the posting requirement, the NLRB has increased its scrutiny of employer rules and policies that could be interpreted as chilling employees' rights to engage in concerted activity. The policies and rules that tend to be problematic are those that could be construed as limiting employee communication about working conditions and terms of employment, including social media, confidentiality, and non-disparagement policies. Such policies routinely come under review when the NLRB receives a charge alleging an unfair labor practice (ULP), even when the ULP does not implicate the particular rule or policy. Given the NLRB's decision to abandon the posting rule, its scrutiny of employer policies is likely to continue in 2014.
Last month, in Cejas Commercial Interiors, Inc., v. Torres-Lizama, the Oregon Court of Appeals adopted the “economic realities test” for determining whether an individual is an employee under Oregon's minimum wage statute. The statute, ORS 653.025, provides that “no employer shall employ * * * any employee” at a wage lower than the “Oregon minimum wage.” A challenge for courts is to determine whether a worker is an employee of the purported employer.
Before last month’s ruling, trial courts in Oregon applied two different tests to determine whether an individual is an “employee” for purposes of the minimum wage statute. One test, called the “right-to-control test,” looks at whether the presumed employer has formal control over the individual workers. A second test, the one adopted by the Court of Appeals, focuses more broadly on whether “an entity has functional control over workers even in the absence of the formal control.” The goal of the economic-realities test is to determine whether, “as a matter of economic reality,” the worker is dependent on the alleged employer.
In Cejas Commercial Interiors, Inc., v. Torres-Lizama, the workers alleged that Cejas, a drywall contractor, was their employer while they did drywall work that Cejas had subcontracted to Viewpoint Construction, LLC. The workers sought compensation from Cejas when Viewpoint disappeared without paying them, claiming that Cejas and not Viewpoint was their employer. The Court of Appeals agreed with the trial court that, even applying the broader economic-realities test, the workers were not “employees” of Cejas, and therefore Cejas did not owe them minimum wages. The court found that Cejas “neither formally nor functionally controlled the terms and conditions of employment.” Further, the court found that the workers were not economically dependent on Cejas and Cejas was a “mere business partner” of the workers' direct employer, Viewpoint.
State Representative (and Ater Wynne attorney) Shemia Fagan is hosting a free Cover Oregon training for businesses and individuals interested in learning about the new online health insurance marketplace. This hands-on training will be more extensive than the presentations Cover Oregon has conducted, as attendees can bring their laptop computers, connect to Wi-Fi ,and walk through the website and options during the training. A representative from Cover Oregon will be on hand to answer questions and guide the training.
Wednesday, October 30, 7:30am - 9:00am
Monarch Hotel, Pacific Ballroom, 12566 SE 93rd Ave Clackamas, OR 97015
Bring your laptop! Wireless access is available, and a Cover Oregon representative will be on hand to walk you through the process of getting signed up.
RSVP to email@example.com
Ater Wynne invites you to attend its next employment law seminar, on Thursday, September 19, 8 a.m. to 10 a.m., at Portland's World Trade Center. A panel will discuss Gender Equality: Emerging LGBT Issues in the Workplace. For details and on-line registration, go to the Ater Wynne Resources Page.