United States: NLRB Expands Its Regulation Of Nonunion Employer Conduct

Nonunion work settings are increasingly subject to scrutiny by the National Labor Relations Board (NLRB or Board). With a full complement of Clinton appointees, the NLRB in a series of recent decisions has expanded its efforts to regulate how employers can conduct investigations and what work rules they can maintain even where the employees involved are not represented by a union. No case is more indicative of the NLRB's extension of control over the basic employment decisions of nonunionized employers than the disturbing decision of Epilepsy Foundation of Northeast Ohio, 331 NLRB No. 92 (7/10/00). Reversing its own longstanding precedent, the Board, on July 10, 2000, ruled that employees in a nonunion setting are entitled to have, upon request, a coworker present during an investigatory interview which the employee reasonably believes might result in disciplinary action.

Other important Board decisions promise to have an equally profound impact on nonunion workplace rules and e-mail policies. These rulings are likewise summarized below.

A 1975 Supreme Court decision, entitled NLRB v. Weingarten, 420 U.S. 251 (1975), afforded unionized employees the right to have a union representative present at an investigatory interview which the employee reasonably believed might result in disciplinary action. In the past, the Board has struggled with whether these "Weingarten rights" apply in a nonunion environment. In 1982, the Board in Materials Research Corp., 262 NLRB 1010 (1982) held that Weingarten rights did apply in a nonunion setting. However, only three years later, the Board overruled itself in Sears, Roebuck & Co., 274 NLRB 230 (1985), holding that Weingarten principles are inapplicable to employees not represented by a union. Finally, in 1988, the Board reaffirmed its position that Weingarten rights are not applicable to nonunion settings in E. I. Dupont & Co., 289 NLRB 627 (1988).

Now, 12 years later, the Board has revisited the issue and, in a sharply divided three-to-two decision, again granted Weingarten rights to nonunion employees, a decision which is almost certain to be challenged in the Court of Appeals. The Epilepsy Foundation decision will likely have significant practical and legal implications for nonunion employers. As Board Member Peter Hurtgen warned in dissent:

The case stemmed from the discharge of two employees of the Epilepsy Foundation of Northeast Ohio, an organization that provides services to people with epilepsy. Prior to their discharge, the two employees wrote a memo critical of their supervisor. After the memo was sent, the Executive Director of the program approached one of the employees, requesting that the employee meet with her and the supervisor. Intimidated by the prospect of meeting with both the Executive Director and his supervisor, in part because he had been previously reprimanded by the two, the employee requested to meet with the Executive Director alone. After his request was denied, the employee asked if the co-author of the memo could be present at the meeting. This request was also denied. When the employee continued to express apprehension about the meeting, he was told to go home and the next day he was terminated for insubordination. (The other employee was terminated less than two months later for refusing to accept supervision.)

The Board ruled that discharging the employee for refusing to attend the meeting violated Section 8(a)(1) of the National Labor Relations Act (the Act), and ordered reinstatement with backpay. The Board majority emphasized that the Supreme Court's Weingarten decision was grounded in the notion that even employees who are not represented by a union have the right to engage in "concerted activities for the purpose of mutual aid or protection." The majority then concluded:

The Board majority overruled Sears, Roebuck & Co. and E. I. Dupont & Co., and held that Weingarten rights should be afforded to nonunion employees.

Unlike most NLRB decisions, the Epilepsy Foundation ruling applies to every employer engaged in interstate commerce, regardless of union status. Typically, nonunion employers will, as an essential part of employment investigations, have two managers/supervisors interview a suspected wrongdoer without additional participants in the meeting. In this manner, employers can maximize the likelihood of ascertaining the facts, maintain the confidentiality to the extent appropriate and prove what was said. Now, upon the request of the employee being investigated to have a coworker present, nonunion employers will no longer be able to adhere to this model.

Employers investigating potential disciplinary situations will now be confronted with a broader spectrum of confidentiality and privacy issues, along with a multitude of sensitive and problematic concerns affecting employer-employee relations. For example, investigating a charge of sexual harassment, already fraught with legal risks, likely will become even more difficult, since employers may be limited in their ability to insist upon privacy and will have increased difficulty controlling the dissemination of critical, sensitive facts.

Other practical issues include determining what is an "investigatory interview" within the meaning of Weingarten, deciding what to do when the requested co-employee is absent or unavailable, and understanding the limit on the co-employee's conduct during the interview.

The full import of the Board majority's ruling in Epilepsy Foundation remains to be seen. However, for nonunion employers, some guidance is available with respect to a number of practical issues:

• Must I comply if the ruling is appealed? In Epilepsy Foundation, the NLRB applied the new right to nonunion Weingarten representation "retroactively." Thus, at least according to the NLRB, nonunion employees have a right to Weingarten representation at the present time, notwithstanding any possible appeal of the NLRB's recent ruling. Nonunion employers act at their peril if they disregard the new ruling.
• Must I give representation to nonunion employees if it is not requested? No. The Supreme Court in Weingarten stated "the right arises only in situations where the employee requests representation."
• In what types of meetings can employees request representation? As stated in Weingarten, "the employee's right to request representation as a condition of participation in an interview is limited to situations where the employee reasonably believes the investigation will result in disciplinary action." This right does not exist, for example, concerning "run-of-the-mill shop-floor conversation" like the "giving of instructions or training or needed corrections of work techniques."
• If the employee requests representation, can I decide not to have an investigatory meeting? Yes, although this may create other potential problems (see the next point below). The Supreme Court in Weingarten approved the following approach:

• Can non-NLRB problems arise from administering discipline without an investigatory meeting? Yes. Administering discipline without hearing the employee's side of the story, and without having the ability to extract from the employee a single explanation for his or her actions, may create problems if the individual initiates other types of employment litigation (e.g., wrongful discharge or discrimination claims). Jurors in particular would likely disfavor situations where an employer terminated a person's employment without hearing their version of events.
• Must I "bargain" with a nonunion employee's representative? No. In Weingarten, the Supreme Court stated "the employer has no duty to bargain with any . . . representative who may be permitted to attend the investigatory interview. . . . The representative is present to assist the employee, and may attempt to clarify the facts or suggest other employees who may have knowledge of them. The employer, however, is free to insist that he is only interested, at that time, in hearing the employee's own account of the matter under investigation."

The Epilepsy Foundation case is not the only recent Board decision extending NLRB regulation deep into the nonunion setting. In Flamingo Hilton-Laughlin, 330 NLRB No. 34 (Nov. 30, 1999), the Board exercised its authority over a nonunion employer based on the contents of its employee handbook.

Many nonunion employers are unaware of prior NLRB decisions prohibiting them from maintaining overly restrictive non-solicitation rules, or rules preventing employees from sharing information concerning their compensation or other conditions in the workplace. The Flamingo case reaffirms the Board's posture in this area but goes well beyond its prior decisions in the area of employee governance, holding that certain rules established by a nonunion employer are prohibited per se merely because they may have a "chilling effect" on union activities. The Flamingo decision underscores the vagueness of Board decisions on handbook rules and policies and will likely create new tension between the Board and the courts regarding how far seemingly neutral rules may be regulated by the NLRB in a nonunion setting.

The Board in Flamingo addressed an unfair labor practice charge regarding the contents of a nonunion hotel employer's handbook. The charge in question was filed by a union that was not even seeking to organize the hotel's employees. The Board's decision addressed a number of the rules within the handbook, including:

1. The employer's rule on confidentiality prohibited employees from revealing "confidential information regarding our customers, fellow employees or hotel business." The Board held this to be a violation of the Act because it is ambiguous and could be interpreted as limiting employee discussion of wages.
2. The employer's dress code policy stated that "[m]anagement may discipline any employee for failure to comply with the dress code. . . ." This rule was held unlawful by the Board because it could prevent employees from wearing union buttons at work. The Board reasoned that the rule's broad, sweeping language could be construed to prevent the wearing of such buttons, even though this may not have been the employer's intent.
3. The hotel's off-duty solicitation rule included a provision which indicated that "[n]o employee may solicit other employees at any time in. . .areas open to guests and/or public." In the Board's view, the provision unlawfully barred off-duty employees from soliciting other off-duty employees in certain public areas of the facility other than gaming areas.
4. The Board also addressed the employer's rule which prohibited employees from "making false, vicious, profane, or malicious statements regarding another employee, guest, patron or the hotel itself." The Board found this rule overbroad and violative of the Act because its prohibitions included merely "false statements." The Board's rationale was that punishing employees for making false statements fails to define clearly the area of permissible conduct for employees and may cause employees to refrain from engaging in protected activities.
5. The handbook prohibited employees from "using loud, abusive or foul language" and from engaging in "disorderly conduct" which included "fighting, horseplay, threatening, insulting, abusing, intimidating, coercing or interfering with any guests, patrons, or employees." The Board held this rule was unlawful because it did not define abusive or insulting language or conduct, and the rule could reasonably be construed as barring lawful, albeit confrontational, union organizing.
6. Finally, the Board held that the employer's rule prohibiting employees from patronizing the property during the eight hours immediately before a scheduled shift violated the employees' right to organize. The Board's holding is based on its view that off-duty employees may visit their employer's public parking lots and spaces. The rule therefore was overbroad because it did not limit its reach to the "interior of the employer's property."

In addition to reflecting the Board's heightened willingness to regulate nonunion employers, Flamingo provides a vehicle for unions to engage in a preemptive attack on a nonunion employer as a prelude to a union organizing campaign. A union could file a charge regarding the legality of an employer's policy or handbook rule to demonstrate that the employer has been overbearing in its governance of its employees, in violation of law, thus creating the perceived need for a union. The decision also increases the prospect of the NLRB's prosecution of cases involving disciplined or discharged nonunion employees based on employer rules deemed to be violative of the Act.

Finally, the decision provides a significant strategic opportunity for unions that have obtained sufficient employee support to file a petition for a representation election conducted by the NLRB. The Board has held the mere maintenance of an unlawful rule will entitle a union that has lost an election to a rerun election, or if the maintenance of an impermissible rule is coupled with more significant unfair labor practices, the Board could issue a bargaining order directing the employer to recognize and bargain with the union even though the union lost the election.

The NLRB's General Counsel, responsible for prosecuting cases before the Board, has also indicated willingness to regulate nonunion employers' e-mail policies which completely ban all non-business use of e-mail. Under this view, e-mail may include messages protected by the NLRA, therefore making such policies presumptively unlawful. Under the leadership of the NLRB's former General Counsel, Fred Feinstein, the General Counsel's office has sought to treat e-mail as a form of "solicitation" rather than "distribution" because e-mail could be expected to lead to spontaneous response similar to conversation.

The significance of the General Counsel's position that e-mail communication is solicitation is that solicitation generally must be permitted on non-working time. If the communication is considered distribution, however, it then could be prohibited on working time and at any time in work areas, unless the employees have no available non-work areas.

In a recent case handled by Seyfarth Shaw, an employer's e-mail policy containing a total ban on all non-business use of the e-mail system passed muster with the same administrative law judge (ALJ) who ruled in Flamingo. In the e-mail case, the ALJ rejected the General Counsel's position and analogized e-mail to employer bulletin boards and telephones and held that neither employees nor unions have a statutory right to use them. Even though the employer, notwithstanding its policy, had permitted personal use of the e-mail system, the ALJ noted that, in the absence of evidence of discriminatory enforcement, the policy was valid as written.

As more employers seek to control non-business use of e-mail based on legitimate concerns relating to potential liability stemming from unlawful harassment, the distinctions noted above should be kept in mind when crafting electronic telecommunications policies. Further, employers should be aware that the Board has not yet issued its final pronouncement in this area, and, despite the recent ALJ decision, the General Counsel=s position that employers cannot prohibit employee solicitation on their e-mail systems ultimately may be adopted by the Board. Moreover, the issue will likely be considered by the federal courts.

The Board's injection of its ideas regarding employer investigations and conduct rules into the nonunion setting presents many traps for unwary employers. Prudent nonunion employers would do well to review their rules and policies governing employee conduct, and their procedures for conducting investigations of alleged misconduct. Failing to do so may subject employers to having discipline and discharge decisions overturned and backpay awarded, and could give unions seeking to organize their employees a significant strategic advantage.

Seyfarth Shaw Management Alert: This is a periodic publication of Seyfarth Shaw and should not be construed as legal advice or a legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only, and you are urged to consult a lawyer concerning your own situation and any specific legal questions you may have.

For further information about these contents, please contact the firm.