Both the courts and the National Labor Relations Board (NLRB) seem to keep changing the definitions of joint employment. It is no wonder this has left employers scratching their head about the situation. The cause for this itch is the analysis differs depending on the law at issue. For example, the Fair Labor Standards Act (FLSA), various state employment laws defining “employees,” common law (guided by the National Labor Relations Act), the Family and Medical Leave Act (FMLA), and workers’ compensation laws all have joint employer doctrines and associated tests that are slightly different from the others.
To demonstrate these differences, we will look at two of the most recent cases that modify the joint employer analysis under both the National Labor Relations Act (NLRA) and the Fair Labor Standards Act (the FLSA). Both these cases define a test – but it is not the same test. Unfortunately, the lesson is that an employer or putative employer will not know whether a person is an employee for the purposes of a particular law without determining first what test should be applied for that law.
If you had asked me one month ago to predict the winner of the presidential election, I would have been wrong. Therefore, rather than make my own [ill-fated] predictions of the changes that await employers when PEOTUS takes office, I consulted my trusty Magic 8 Ball. Here’s what it predicted:
Will the overtime rule ever become law?
MY SOURCES SAY NO.
We all have heard by now that the Department of Labor (DOL) rules extending eligibility for time-and-a-half overtime pay to some 4.2 million additional workers (including many employees in the hospitality industry) are on hold thanks to an injunction by a federal court judge in Texas. So what now? The DOL under the Obama administration was expected to appeal the ruling to the US Court of Appeals for the 5th Circuit, but the Trump administration has different priorities and may decide not to pursue an appeal after all.
Nancy Cooper, member of our Labor and Employment Group and Hospitality, Travel and Tourism practice team, discusses the NLRB's March 2015 report and the importance of reviewing and updating your employee handbook. Thank you for today’s post, Nancy! – Greg
The National Labor Relations Board (NLRB or the Board) oversees all things union under the National Labor Relations Act (NLRA). Congress enacted the NLRA in 1935 to protect the rights of employees and employers, to encourage collective bargaining, and to curtail certain private sector labor and management practices, which can harm the general welfare of workers, businesses and the U.S. economy. Even though the NLRB is focused on labor management practices with the unionized workplace, it also has jurisdiction over private sector employers who do not have a union. The Board just has not often exercised that authority – but that has increasingly changed that over the last ten years or so.
The NLRA gives employees the right to act together to try and improve pay and working conditions (“protected, concerted activity”), whether the employees are union or non-union. These rights are also commonly referred to as Section 7 rights because they are outlined in Section 7 of the NLRA. The NLRB has become more active in enforcing these rights. Generally, the Board looks to see if actions taken are of a concerted (more than one person) nature intended to address issues with respect to employees’ terms and conditions of employment. Sometimes, though the issue is not the action taken, but the rules that govern the employees’ behavior, such as those in your employee handbook.
On March 18, 2015 the General Counsel of the NLRB issued a report regarding what language in certain employer policies would be considered lawful, and what would not. When reviewing such rules, the NLRB looks at whether or not the language would act to chill employees from exercising their right to engage in a protected, concerted activity. In other words, they looked at each policy before them to determine if the average reasonable employee would likely read the policy to mean that the employee was not allowed to talk about the terms and conditions of their employment with others, whether that be outside people or other employees. If it could be read to mean that, the policy was unlawful.
So what sorts of things could be read to restrict employees from talking to each other? Just about anything from social media policies to confidential information policies to anti-harassment rules and anywhere in between. Above all, the context in which a phrase was used seemed to make a difference if a phrase was a close call. So it is important, as you review your handbook, to not just focus on the words themselves but also the context in which they are used. Additionally, it is important to remember that a simple disclaimer such as, “Nothing in this policy is meant to prevent employees from engaging (or declining to engage) in discussions about their terms and conditions of employment” may be helpful, but they are not an automatic guarantee that an otherwise unlawful policy will now be lawful.
Some examples of phrases the NLRB found to be problematic (and why) are:
- Do not discuss customer or employee information outside of work, including phone numbers and addresses. (Overbroad reference to “employee information” and the blanket ban on discussion may lead an employee to think they could not discuss the terms and conditions of employment, including the contact information of other employees so that they could all talk.)
- Discuss work matters only with other Company employees who have a specific business reason to know or have access to such information. Do not discuss work matters in public places. (Broad restrictions that do not clarify they are not meant to impinge on an employee’s rights under the NLRA so an employee could reasonably understand it to encompass wages, benefits and other terms and conditions of employment.)
- Confidential Information is: “All information in which its (sic) loss, undue use or unauthorized disclosure could adversely affect the Company’s interests, image and reputation or compromise personal and private information of its members.” (Employees have a right to share information that supports their complaints about wages and terms and conditions of employment, and employees may believe they cannot disclose that kind of information because it might adversely affect the Company’s interest, image or reputation.)
Employee Conduct Toward Employer:
- Be respectful to the Company, other employees, customers, partners and competitors. (Overbroad and employees could reasonably construe them to ban protected criticism or protests regarding their supervisors, management or the Company in general.)
- No defamatory, libelous, slanderous or discriminatory comments about the Company, its customers, and/or competitors, its employees or management. (Overbroad and employees could reasonably construe them to ban protected criticism or protests regarding their supervisors, management or the Company in general.)
- It is important that employees practice caution and discretion when posting content on social media that could affect the Company’s business operation or reputation. (Overbroad because it could reasonably be read to require an employee to refrain from criticizing the employer in public.)
Employee Conduct Toward Another Employee:
- Do not make insulting embarrassing, hurtful or abusive comments about other company employees online and avoid the use of offensive, derogatory or prejudicial comments. (Overbroad because debate about unionization and other protected concerted activity is often contentious and controversial. Employees could reasonably read such a rule to mean they are limited in their ability to be honest in discussions regarding these subjects.)
There are many more examples of problematic employer rules on various topics in the report. You are encouraged to look again at your employee handbook and employer rules. If you have any questions, or for more information regarding this report, please feel free to contact me or Nancy. We will be glad to help bring your employer rules back within the safety zone – at least until the next General Counsel report is issued.
Are your employees using company email during nonworking hours? Victoria Slade, member of our Labor and Employment Group, brings us the latest developments in NLRB’s ruling and important policy changes that employers can implement to comply with the ruling. Thank you, Vicky! – Greg
As you may have heard, the NLRB recently ruled that employees who are given access to their employer’s email system for their jobs must be permitted to use that email system during nonworking time to engage in protected activity, such as forming a union or discussing terms and conditions of employment. This ruling applies to both unionized and non-unionized workforces. The ruling has caused some controversy because it overturned long-established precedent. It is not, however, a reason to panic. Employers who are already complying with the NLRB’s guidance on social media need only make a few changes to their policies.
The case is called Purple Communications, Inc., and all 70-plus pages of the order are available here (under “Board Decision” dated 12/11/2014). The rule before this case was that an employer had the right to restrict non-business use of its email system, so long as it did so in a non-discriminatory fashion. In Purple, the Board held that employees must be granted access to use their employer’s email system during nonworking time to engage in protected activity, such as discussing terms and conditions of employment. Employers with a strict rule that work email is for business use only will therefore need to revise their policy to allow employees to use company email during nonworking time to engage in protected activity. There are some limited exceptions to this rule, for circumstances where permitting use of company email for protected activity will seriously disrupt productivity or business operations. If you think this is the case for your business, please contact us, and we can help you craft a policy that should satisfy the NLRB.
If, like many employers, you already allow non-business use of work email during nonworking time, this decision still impacts you. Most employers have some kind of policy that regulates what employees can do on the company’s email and other communication systems. Because the Purple ruling requires employers to allow employees to use company email to engage in protected activity, restrictions that infringe on this right are no longer OK. This, too, is no reason to panic, however, because it simply means your use of technology policy has to look a bit more like your social media policy (you have one of those, right?). As discussed in the blog posts available here, the Board has already issued a series of rulings and memoranda explaining how it will evaluate social media policies. Generally speaking, the Board has stated that a policy will be struck down if it could be read by a reasonable employee to prohibit protected activity, such as engaging in collective action or discussing conditions of employment.
Although Purple Communications was a dramatic opinion, in that it overturned decades of previous Board law, it should not be difficult for businesses to adapt.
The rash of NLRB guidance and new protections for employee social media activity discussed in my previous posts may make employers shy about taking corrective action based on an employee’s social media postings. While employers should always be careful in these situations, however, the mere fact that something is posted online does not make it “protected.” Recent examples in the news are a great reminder that where a posting is vulgar, offensive, or airs a petty grievance without implicating employees’ rights to discuss the terms and conditions of employment, the employer can and in many cases should discipline the employee. Where a posting is less offensive, however, the employer should tread carefully, as unpopular personnel decisions can also draw serious scrutiny.
It’s been a busy month on the social media front with judicial, legislative and regulatory activity. With all this activity, it seems appropriate to give everyone a brief update on some of these recent developments and their effects on the guidance I provided in my previous posts.
Accessing Social Media Accounts
California has now joined Illinois and Maryland in banning employers from requesting social media passwords from current or potential employees or from requiring that employees log in while in the employer’s presence. Other states with pending legislation on this subject include Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, Ohio, Pennsylvania, South Carolina and Washington.
Because this trend is sweeping the nation, employers in any state should be careful and not request that employees divulge their social media passwords or otherwise pressure employees into granting access to social media accounts. This is good advice not only because of the legislative action, but for common sense reasons. Accessing an employee’s private social media account can lead to, among other things, the discovery of the employee’s membership in a protected class or the employee’s protected concerted activity, the employer’s knowledge of which could cause problems if the employee is later disciplined. In other words, ignorance is bliss. This is especially important to remember as the election draws near and employee use of social media to express political beliefs becomes more and more frequent.
Remember when Facebook was just for college kids? Well, things have changed. These days it seems like even giant companies are using social media to show their warm and fuzzy sides and to connect with customers. Obviously, the CEOs of these companies are not spending their time maintaining the accounts and posting clever comments. On the contrary, companies usually dedicate one or more employees to speak on behalf of the company, through a company-sponsored Facebook, Twitter, or other social media account. If done right, an account can build up thousands of followers and grow to host useful information, photos, or communications, becoming an important resource for customers.
But what happens if the employee who is running a company-sponsored account quits? In a perfect world, that employee would gladly relinquish control of the account back to the company. But what if the employee leaves on bad terms? What if the employee leaves for a rival company? What if the employee changes the password and starts posting negative comments, confidential information, or trade secrets? Sorry to get all lawyer-y, but these are the questions that keep me up nights.
Thank you Victoria.
If you are anything like me, you have been eagerly awaiting another update from the NLRB on its social media decisions. Well, wait no longer. On May 30, the NLRB’s Acting General Counsel issued a third report on recent social media cases. This complements the two previous reports from January 12, 2012, and August 18, 2011. For more information on the first two reports, see my recent post.
The new report does not offer any groundbreaking new principles for employers seeking to implement or enforce social media policies. This is good news, as it means that you don’t need to rewrite your social media policy every time the NLRB issues a report. This report does elaborate on a few of the key principles, however, and it offers some new and interesting examples. It also includes as an example an entire social media policy that was found lawful.
In a previous employment law update, Hospitality, Travel & Tourism Practice group member, Diana Shukis, summarized the much discussed National Labor Relation Board's (NLRB) new notice posting rule. Diana provides below a brief update on the deadline for complying with the rule and her thoughts on where things go from here.
Recent court decisions have delayed the April 30, 2012 deadline for complying with the NLRB's notice posting rule. Based on the court decisions, employers are not required to post the statement of employee rights at least for now.
How did the deadline get delayed? Business groups filed two challenges to the notice posting rule – one in the District of Columbia and the other in Charleston, South Carolina. On April 13, 2012, the South Carolina court invalidated the entire notice posting rule, but questions abounded as to whether the ruling applied outside of of South Carolina. On April 17, 2012, the United States Court of Appeals for the District of Columbia issued an emergency order prohibiting the NLRB from enforcing the rule, pending a ruling on the merits of the case before it. The District of Columbia court’s decision clarified that employers do not need to post the notice required in the rule. The NLRB posted a notice on its website confirming the delay in implementation of its rule.
Where does this leave employers? For now, employers do not need to post the notice required by the rule. Both courts will decide the cases before them and the losing party may ask the United States Supreme Court to review.
Our newest post is provided by Victoria Slade, a member of Garvey Schubert Barer's Labor and Employment Group and a frequent collaborator with our Hospitality, Travel & Tourism Practice Group. Victoria's post looks at two recent National Labor Relations Board reports and their impact on employers' social media policies. Several planned upcoming posts will also be looking at social media and its effects on hoteliers's and restaurateurs' operations - stay tuned.
Thank you Victoria for this important update.
Thanks to the internet, a single disgruntled employee can now do dramatic damage to a company’s image through posts on social media sites. (Just ask Domino's Pizza or Hotel Renaissance.) The social media policies employers have instituted in the last few years may work to inhibit online employer-bashing; however, they can also come perilously close to violating the law. To assist employers in navigating this rapidly changing area of law, the National Labor Relations Board (“NLRB”) has issued two social media reports in the last seven months, explaining their rulings in several recent social media cases. As this posting demonstrates, even if you think you have a good social media policy, you may want to revisit it, given the latest NLRB guidance.
Employees in both unionized and non-unionized workplaces have protected rights to certain types of speech under the National Labor Relations Act. These include, briefly, the right to discuss terms and conditions of employment and unfair labor practices with coworkers and the right to engage in concerted activity. Employers who want to restrict employees from making disparaging comments about the company online must carefully phrase their policies to avoid trampling on these rights.
Greg Duff, Editor
Greg Duff founded and chairs GSB’s national Hospitality, Travel & Tourism group. His practice largely focuses on operations-oriented matters faced by hospitality industry members, including sales and marketing, distribution and e-commerce, procurement and technology. Greg also serves as counsel and legal advisor to many of the hospitality industry’s associations and trade groups, including AH&LA, HFTP and HSMAI.