NLRB Issues New Standard For Duty Of Fair Representation Charge Defenses

On September 14, 2018 the National Labor Relations Board issued a memo addressing duty of fair representation charges against labor unions. The National Labor Relations Act makes it illegal for labor unions to restrain or coerce employees when they exercise their rights granted to them by the Act. The law states that a labor organization has a duty to fairly represent employees.

The NLRB believes that their past approach to duty of fair representation cases has created
confusion for employees in what duties are owed to them by union representatives. In response, the memo instructed regional directors that unions should be required to show they have procedures or systems in place to track grievances. It was also explained that a union which does not communicate or respond to a complaining member is negligent, and the negligence would be considered arbitrary and willful. The NLRB stated that it will not accept after-the-fact communication as a correction for negligence. 

The position taken by the NLRB is inconsistent with how they have interpreted duty of fair
representation law in the past. The change means that labor organizations can now be subject to charges based on careless or unprofessional actions that had previously been viewed as just plain error. To avoid a negligence charge, labor organizations should evaluate the procedures and case tracking systems they currently have to ensure their timeliness and thoroughness.

Ninth Circuit Affirms Arbitration Award

The Ninth Circuit clarified the limited role courts play in reviewing labor arbitration awards. (Southwest Regional Council of Carpenters v. Drywall Dynamics, Inc. (9th Cir., May 19, 2016, No. 14-55250)2016 WL 2909241.) The court held the district court exceeded its narrow authority to determine whether an arbitrator’s award was based on the parties’ contract and whether it violated an “explicit, well-defined, and dominant public policy.”

Drywall Dynamics (“Drywall”), the employer, entered into a labor agreement with the Union, the Southwest Regional Council of Carpenters. Under the agreement, Drywall assigned its authority to bargain to a contractors’ association (“Association”). Years later, Drywall attempted to terminate the agreement, only to discover the Union and the Association had executed a Memorandum of Understanding (“MOU”) extending the term of the agreement. An arbitrator held Drywall was bound by the MOU. The district court, however, vacated the arbitration award, holding the arbitrator’s interpretation of the parties’ agreement was not “plausible” and “contrary to public policy.”

The Ninth Circuit reversed, emphasizing that an arbitration award must be upheld as long as the arbitrator even arguably construed or applied the contract. According to the court, the appropriate and singular question to ask when determining whether to enforce an arbitration award is: “Did the arbitrator look at and construe the contract, or did he not?” The district court should not have considered whether the arbitrator’s interpretation was “plausible.” Moreover, a court can only vacate an arbitration award if it runs contrary to explicit, well-defined, and dominate public policy.” The Ninth Circuit determined there were two “competing interests” – the employer’s interest to withdraw from a multiemployer unit and the interest in stable multiemployer units. Because there were competing interests, neither could be “dominant” policy.

This decision reaffirms the extremely deferential standard by which a court will review an arbitration award. 

NLRB Improves Backpay Formula for Unlawfully Terminated Workers

In a recent 3-1 decision, the National Labor Relations Board ("NLRB") modified its backpay formula to make unlawfully terminated workers whole. In King Soopers, the NLRB found that its previous formula was inadequate to fully compensate workers who were unlawfully terminated. Specifically, the Board found search-for-work expenses and interim work expenses should be treated as a separate component of the backpay award, rather than an offset against interim wages.

When an employee is terminated for union activities, he or she is required to find and maintain interim employment to mitigate damages while the unfair labor practice case is decided. The pay the discriminatee receives from interim employment is deducted from the backpay award. However, the search for interim employment, and sometimes the interim employment itself, often causes the discriminatee to endure additional financial hardship. This is especially true if the discriminatee is forced to relocate, commute longer distances, or pay for additional training for the interim employment.

In the past, the NLRB treated search-for-work expenses and interim employment expenses as offsets to interim earnings. This prevented discriminatees who were unable to find interim employment to receive any compensation for search-for-work expenses. Similarly, discriminatees whose interim job wages were less than their total expenses were not compensated for the amount of expenses that exceeded their interim wages.

The Board now treats search-for-work expenses and interim work expenses as a separate component of the backpay award. The purpose of make-whole relief is to restore, as nearly as possible, that which the discriminatee would have earned if he or she had not been unlawfully terminated, and to deter future unfair labor practices. The Board found that this new formula better serves both purposes. As a result, discriminatees who prevail on their unfair labor practices will be fully compensated for the financial hardships caused by their unlawful terminations.

The Public Employment Relations Board currently treats search-for-work expenses and interim employment expenses as offsets to interim earnings. But PERB will likely follow suit and treat search-for-work expenses and interim job expenses as a separate component of the backpay award to ensure discriminatees are fully compensated.

NLRB: Employees May Use Employer Email on Nonworking Time

On December 11, 2014, the National Labor Relations Board issued a greatly anticipated decision in Purple Communications , Inc. v. Communications Workers of America, AFL-CIO. The Board held employees may use employer email systems for statutorily protected communications on nonworking time, unless the employer shows a business justification for prohibiting it. In reaching this decision, the Board overruled prior case law to respond to technological changes in society.

The Board overruled its 2007 decision in Register Guard, finding it "was clearly incorrect." Register Guard held an employer may completely prohibit employees from using the employer's email system for concerted activities protected under Section 7 of the National Labor Relations Act. Register Guard allowed employers to completely ban employees from using the employers email system for these purposes without demonstrating any business justification, so long as the ban was not applied discriminatorily.

Purple Communications overruled Register Guard, finding it undervalued employees' core Section 7 right to communicate in the workplace about their terms and conditions of employment, and granted too much weight to employers' property right. The Board noted statistics showing email has become the most pervasive form of communication in the business world. The Board also discussed the Supreme Court's decision in City of Ontario, California v. Quon, which found some personal use of employer email is common and usually accepted by employers.

The Board stressed its holding in Purple Communications is "carefully limited." The holding only applies to employees who have already been granted access to the employer's email system and does not require employers to provide such access. Also, an employer may justify a total ban on nonwork use of email by showing the ban is necessary to maintain production or discipline.  Employers may also impose uniform and consistent controls over its email system to the extent necessary to maintain production and discipline. The holding is limited to email access, and does not extend to other forms of electronic communication. Although a small step, this decision shows the Board's willingness to adapt to ever-increasing technological changes.

This decision is about access to employers' email systems, not confidentiality of those emails.  It is possible some employers will read emails sent through their email systems and labor leaders should use caution about what they send on an employers' email system.

NLRB Ratifies Board Actions Taken During Period of Invalidly Appointed Board Members

On July 18, 2014, the National Labor Relations Board ratified all Board actions taken during the period of invalidly appointed Board members. On June 26, 2014 the Supreme Court held in Noel v. Canning that President Obama invalidly appointed NLRB board members. The invalidly appointed members served on the Board between January 4, 2012 and August 5, 2013. After the Supreme Court's ruling, all Board actions came under scrutiny because the Board lacked a quorum. The Board has now ratified all actions taken during that period.

Specifically, the Board stated all administrative, personnel, and procurement matters were timely and appropriate. The Board expressly authorized the selection of Regional Directors Dennis Walsh, Margaret Diaz, and Mori Rubin. The Board ratified the selection of Administrative Law Judges Kenneth Chu, Christine Dibble, Melissa Olivero, Susan Flynn, and Donna Dawson. The Board also authorized the restructuring of various Field Offices, and the restructuring of Headquarters' Offices. This ratification is to remove all doubt about the validity of the Board's actions taken during the period of invalidly appointed Board members.

U.S. Supreme Court Rules President Obama Invalidly Appointed National Labor Relations Board Members

On June 26, 2014, the U.S. Supreme Court decided NLRB v. Noel Canning. The Court set aside a National Labor Relations Board ("Board") order because the Board lacked a quorum when it issued the order. The Court ruled the Board lacked a quorum because President Obama invalidly appointed three of the five Board members. This decision may impact other cases decided by the unlawfully appointed Board members.

The case began as a labor dispute between a labor union and Pepsi-Cola distributor Noel Canning. The Board ruled the distributor unlawfully refused to execute a collective-bargaining agreement with the labor union. The Board ordered the distributor to execute the agreement and compensate employees for any losses. The distributor challenged the Board's order, arguing the Board could not take legal action because the President invalidly appointed three of the five Board members. Three lawfully appointed Board members are required for the Board to take any action.

President Obama appointed the three Board members on January 4, 2012 during a three-day Senate recess. Interpreting the Constitution's Recess Appointments Clause, the Court held a three-day recess is too short to trigger the President's recess-appointment power. Since the President invalidly appointed three of the five Board members, the Board lacked a quorum when it ordered the distributor to execute the collective-bargaining agreement and compensate employees for any losses.

This ruling may have far-reaching consequences. Many cases decided by the invalidly appointed Board members could be affected. The Board Chairman, Mark Gaston Pearce, stated the Board now has a quorum of validly appointed Board members and the agency is analyzing the impact of the Court's decision on other cases.

Court Rules NLRB Appointments Unlawful, Calls Into Question 200 Decisions

In Noel Canning v. National Labor Relations Board (D.C. Cir., Jan. 25, 2013, 12-1115) 2013 WL 276024, the Court of Appeals for the D.C. Circuit ruled President Obama's January 4, 2012 recess appointments to the National Labor Relations Board were unconstitutional.   As a result, the NLRB's decisions since that time are now being called into question and may be unenforceable.  

The Recess Appointments Clause is part of the federal Constitution.  It says, "The President shall have power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session."  This case was about what counts as "the Recess of the Senate" and what does not, with the President arguing the Senate was in recess on January 4, 2012 and the petitioner arguing it was not.  Ultimately, the Court decided the Senate was not recess, reasoning that "The Recess" means only breaks between official sessions of Congress and not other breaks during a session.  As a result, the Court found the Senate was not in recess on January 4, 2012 and the President's appointments to NLRB are therefore invalid.

The affects of the decision on unclear.  The NLRB's official position is that the ruling only applies in one case.  However, others believe it calls into question most of the NLRB's 2012 decisions, including several involving social media.

NLRB Issues New Report on Social Media Cases

The National Labor Relations Board issued a new report yesterday on its cases involving employees' use of social media and corresponding employer policies and practices.  The report notes many employer policies about social media use by employees are unlawful because they punish employees for engaging in protected concerted activity.  The report follows up on an August 18, 2011 report surveying similar cases.  The NLRB oversees most private-sector labor relations in the United States.  While public-sector labor relations in California are administered by the the Public Employment Relations Board, an independent state agency, PERB often looks to NLRB precedent in making decisions.

NLRB: Facebook Post Was Protected Activity

In Hispanics United of Buffalo, Inc. (September 2, 2011) NLRB Case No. 3-CA-27872, an administrative law judge of the National Labor Relations Board ruled a New York nonprofit violated federal law by firing five employees who posted comments on Facebook about working conditions, including workload and staffing.

An employee of the nonprofit brought the case after he was fired for comments he posted on Facebook. The employee claimed some employees did not do enough to help their clients, drawing responses from other employees about job performance, working conditions and staffing levels. Some of the comments supported the initial post and some disagreed. The nonprofit later fired five employees involved, claiming their posts harassed another employee.

The judge determined firing employees for these comments violated the National Labor Relations Act. The relevant part of the NLRA gives employees “…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.”

The judge noted “[e]mployees have a protected right to discuss matters affecting their employment amongst themselves.  Explicit or implicit criticism by a co-worker of the manner in which they are performing their jobs is a subject about which employee discussion is protected…” The judge went on to hold that protected applies equally to Facebook posts as it would to a workplace conversation around the water cooler.

The judge found there was no evidence the employees harassed anyone with their posts and noted “[the employer] was looking for an excuse to reduce its workforce and seized upon the Facebook posts as an excuse for doing so.”

Ultimately, the judge ordered the nonprofit to reinstate the employees and pay them back pay plus compound interest.