During the first month and a half of 2018, the National Labor Relations Board (“NLRB” or “Board”) released a torrent of memoranda authored by its Division of Advice (“Advice”), a section of the NLRB’s Office of the General Counsel. As you may have read on our blog before, Advice memoranda are issued by the NLRB’s General Counsel in response to requests from NLRB regional offices for interpretation of the National Labor Relations Act (“NLRA”) in fact-specific situations. Although non-binding and non-precedential, the memoranda are regarded as authoritative guidance from the General Counsel.
Advice memos are generally confidential and only are released to the public, in the discretion of the General Counsel, after the case in which the advice sought has been resolved (or occasionally under other unique circumstances). Because of this, the memos are often released months, and sometimes even years, after they are first issued. Indeed, several of the memos in this recent 2018 flurry date back to 2013, and one as far back as 2009. These older memos must be read with caution, as intervening changes in NLRB policy or legal interpretation of the NLRA that occurred subsequent to a memo’s issue date will necessarily impact its usefulness as an interpretative resource.
For example, several of the recently-released Advice memos applied legal standards that the NLRB overturned in December 2017, such as those relating to the NLRB’s take on employer policies. As you know from our blog, employers became more optimistic when the NLRB, in The Boeing Group, overruled its previous legal standard – the Lutheran Heritage standard, named for the case in which it was announced – under which it analyzed and so commonly found employer policies to be unlawful, and in its place stated a new standard promising to provide greater consideration to employers’ interests in maintaining workplace policies.
The list of recently-released Advice memoranda – 44 just in February 2018, so far – includes only two Advice memoranda issued this year. Below is a summary of these two memos, and some other more recent memoranda that would be of interest to any employer, whether union-organized or not.
Termination Under Broad Confidentiality Rule Did Not Violate Section 8(a)(1)
In a January 12, 2018 advice memo, Advice concluded that non-profit organization California Youth Connection’s termination of an employee who complained about his job transfer to individuals outside the organization did not violate the NLRA, despite at least some appearance that the termination occurred under the employer’s unlawfully overbroad confidentiality rule. Advice determined the employee’s complaint to the outside individuals was not legally-protected concerted activity under Section 7 of the NLRA (“Section 7”) because it advanced only the employee’s own interests (and thus was not concerted activity), but nonetheless, under the standard set forth in the NLRB’s decision in Continental Group, the conduct “touch[ed] concerns animated by Section 7” because it related to terms and conditions of employment (the employee’s dissatisfaction with job transfer).
After the employee’s communication, the employer counseled the employee not to discuss “internal communications” with outside individuals, and also sent a staff-wide email expressing the same confidentiality rule. The employer later terminated the employee and explained that the employee’s communication with outside individuals about his transfer “got [the employer] thinking,” but the employer did not cite the confidentiality rule specifically as the basis for termination. Advice found that because the employer did not directly or indirectly reference the confidentiality rule, which was unlawfully, the termination did not violate Section 8(a)(1) of the NLRA (“Section 8(a)(1)”).
Perhaps the most notable point in this matter arises in a footnote (note 8), in which Advice posits whether the overly-broad confidentiality policy is a Section 8(a)(1) violation in and of itself. The memo does not provide significant analysis, but does cite that even under the new standard announced in The Boeing Group, the confidentiality rule may still be a violation of Section 8(a)(1) because it is likely to have a significant, negative impact on the exercise of Section 7 rights, which is not outweighed by the employer’s legitimate business interests. This footnote concludes, however, by cautioning that although the Region could issue a complaint on this claim, it should not file any briefing without further advice from the General Counsel’s office, signaling an acknowledgment that the interpretations of this new standard are still developing.
Employee Fired For Gender Disparity Memo Was Not Terminated For Engaging In Protected Concerted Activity
This matter involved the well-publicized gender disparity memorandum written by a then-Google employee who theorized that innate disparities in intellect and other important characteristics between men and women explained why the company – validly – had more high-ranking male than female employees. This memo addressed Google’s diversity policies, which the employee opposed. When the employee circulated the memo (leading to significant negative feedback from existing and prospective employees as well as extensive news coverage), Google terminated the employee.
The employee alleged the drafting and circulation of the memo was concerted activity protected by the NLRA because it opposed the company’s policies and practices.
With skepticism, Advice assumed for the sake of argument that the memo was indeed concerted activity. It then moved on to consider the content of the memo, finding it contained both NLRA-protected and unprotected statements. Advice concluded that the memo statements that engendered negative sex stereotypes were not protected because the NLRA does not protect conduct that disrupts the workplace, creates a hostile work environment, or constitutes discrimination based on a protected status.
Significantly, the January 16, 2018 advice memo noted that Google made a clear distinction during the termination and in later staff follow-up communications that the employee’s termination resulted only from the unprotected statements in the memo that violated the company’s harassment and discrimination policies, and not the statements that otherwise opposed company policies. The Advice memo also refers positively to Google’s affirmative confirmation to the terminated employee and remaining staff that the company welcomes speech opposing company practices and work-related matters. Based on these factors, Advice concluded the termination did not violate Section 8(a)(1). This outcome suggests that Google’s approach in this matter may be a worthy prototype for other employers when faced with situations involving intermingled protected and unprotected conduct.
Employee Termination For Opposing No-Recording Policy Violates Section 8(a)(1)
Here, unlike in California Youth Connection, above, Advice determined that a complaint should issue alleging that the employer, JBS USA, LLC, unlawfully terminated a non-union employee who engaged in conduct not directly protected by Section 7, but that involved concerns “animated by” Section 7.
This matter involved an employee who, as a result of a workplace altercation with a co-worker concerning a personal matter, was subjected to an investigation. The employee surreptitiously audio-recorded the first investigation meeting with the company representative. The employer later learned of the recording and informed the employee that company policy prohibited recording. (The policy itself referred to video recording, but the company informed employee that this included audio recordings.) The employee thereafter refused to participate in future investigation meetings if not allowed to record them. The employee also expressed to the employer that its no-recording policy violated the law and the employer was unfairly targeting the employee. JBS placed the employee on suspension for refusal to participate in the investigation and subsequently terminated the employee, citing several workplace conduct violations, none of which specifically referred to the no-recording policy.
With regard to the no-recording policy, Advice found it to be overbroad because it did not carve out any exceptions for Section 7 rights. (This May 2017 memo pre-dated the Board’s December 2017 decision The Boeing Group, and was therefore based on the prior Lutheran Heritage standard. It is a fair question to consider whether the outcome might have been different had the case been examined after December 2017.)
Advice concluded that the employee’s conduct – refusal to comply with the company’s no-recording policy, and complaints about its legality – were not protected concerted activity, because they concerned the policy’s application to just that employee; in other words, it was not concerted activity. However, Advice found the employee’s purpose for recording the first meeting and wanting to record later ones – documenting potentially disparate application of company policies – “clearly implicate[d]” Section 7 rights. Therefore, under Continental Group, Advice concluded that the employer could be liable for violation of Section 8(a)(1), if the confidentiality rule was the basis for the termination.
Advice then determined that the employee’s termination was indeed likely the result of the application of the overbroad no-recording policy, and therefore that the Region should allege it as a violation Section 8(a)(1). This outcome is worth noting because of Advice’s seemingly contradictory application of the Continental Group standard here, compared to California Youth Connection, above. In both matters, the employer did not cite an unlawfully overbroad policy as the basis for termination. The difference lies in the fact that, here, Advice found that the company’s reasons for the termination were not credible. One of JBS’ stated reasons for the termination was found to be implausible because it asserted the employee, who was on suspension and not allowed to return to work, was terminated for violating the no call/no show policy while suspended. Another of the company’s bases for termination was the employee’s “insubordination” for refusal to participate in the investigation without recording, which Advice found was one in the same as being terminated under the no-recording policy. Although it is possible to attribute the difference in outcomes to the Board composition changes from Democrat-controlled to neutral (two Democrats/two Republicans) that occurred between this memo and the one in California Youth Connection, the opinions can also be reconciled based on their apparent factual differences.
Franchisor Not Liable For Illegal Policy It Created and Provided to Franchisees
In this matter, Advice concluded that sandwich shop franchisor Subway issued an “Online and Social Media” policy to its franchisees that did not comply with the NLRB, it being unlawfully overbroad. (Details of this part of the decision are not included in the publicly-released Advice memo.)
Subway had posted this policy on its intranet and sent three separate messages to franchisees encouraging them to implement the policies in their stores, and have their employees “read and sign” it. Having independently determined that Subway was not a joint employer with its franchisees (the details of this determination also are not addressed), NLRB Region 28 sought input from Advice concerning whether Subway could, nonetheless, be held jointly liable under the Dews Construction Corp. standard, which provides that an entity that directs another employer with whom it has “business dealings” to engage in conduct that violates the NLRA may be held jointly and severally liable for the illegal conduct.
In its September 21, 2017 memo, Advice pointed out that Subway never directed its franchisees to adopt the online and social media policy, and asked only that they “consider” it. Further, Subway did not track the franchisees who used the policies, and only a small percentage of franchisees even downloaded it, which Advice stated also supported its decision that no complaint should issue against Subway under a Dews Construction theory.
The application of Dews Construction in this matter, proffered under a split-party Board, is certainly consistent in theme with the Board’s later decision in December 2017 in Hy-Brand Industrial Contractors, Ltd., where it narrowed its joint employer standard (discarding the much-maligned Browning Ferris Industries case from 2015. As you may recall from our prior blog entry, in Hy-Brand, the Board held that joint employers include only those entities that have direct control or who have actually exerted control over another employer with regard to employment practices of jointly-employed employees. Together JBS and Hy-Brand demonstrate a likely trend in the more conservative-leaning Board’s policy to limit liability to entities that have direct impact on employment decisions and not to pursue remedies against other employers with more attenuated co-employment relationships.