Employment Law Alert : Gibbons P.C.: Labor Relations, Employment Contracts, Employee Benefits, & Wrongful Discharge Lawyers & Attorneys

On May 16, 2013, in NLRB v. New Vista Nursing & Rehab., a divided panel of the Court of Appeals for the Third Circuit joined the D.C. Circuit in holding that the Recess Appointments Clause of the Constitution allows the President to make “recess appointments” (that is, without the advice and consent of the Senate) only when the Senate is on a formal intersession recess, as opposed to an intra-session break. Both the Third Circuit’s decision and the D.C. Circuit’s recent decision in Canning v. NLRB (as elaborated upon in Nat’l Ass’n of Mfrs. v. NLRB) arise from actions taken by the National Labor Relations Board (the “Board” or the “NLRB”) some of whose members had been appointed during an intra-session break. To summarize: (1) at least three Board members must participate in a Board decision; (2) according to these courts, the Board has not had three validly-appointed Members since August 27, 2011; and (3) although the NLRB has had four sitting Members between April 5, 2010 and August 27, 2011, it has issued some three-Member decisions during this time wherein one decision-maker, Craig Becker, was arguably unconstitutionally-appointed, rendering those decisions invalid. Potentially hundreds of decisions by the Board over the past three years are at risk of being declared invalid.

As we previously reported on January 31, 2013, and May 13, 2013, the Supreme Court is likely to address what constitutes a valid recess appointment next term in response to a petition filed by the Board in Canning. The Supreme Court will be faced with a Circuit split, as in 2004 the Eleventh Circuit upheld an intra-session appointment of a federal judge under the Recess Appointments Clause.

Summary of the Decision

Like the D.C. Circuit in Canning, the Third Circuit engaged in a historical analysis to conclude that the Constitution’s drafters intended that the President make recess appointments only during an intersession recess of the Senate. The Court rejected the argument that the President could also make these appointments during an intra-session recess of the Senate that lasted a non-negligible length of time (e.g., at least 10 days), or whenever the Senate is “unavailable for business,” the position taken by the Board. The Court found no merit in the argument that what constitutes a “recess” under the Recess Appointments Clause is a “political question” that the courts should refrain from deciding.

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On May 7, 2013, in Nat’l Ass’n of Mfrs. v. NLRB, the United States Court of Appeals for the District of Columbia decided that a rule implemented by the National Labor Relations Board (“Board” or “NLRB”) requiring most private sector employers to post a notice about workers’ rights to unionize was invalid. As previously reported, the Board issued the rule almost two years ago, and has repeatedly postponed its effective date pending the outcome of legal challenges to the rule by business groups.

Practical Implications of the Decision

The big takeaway from the D.C. Circuit’s decision is that employers (still) have no legal obligation to post a notice about unionizing in the workplace – at least not anytime in the near future. Notably, there is a similar case pending before the Fourth Circuit (covering Maryland, North Carolina, South Carolina, and Virginia), which has the authority to uphold the rule for those states within its jurisdiction. Additionally, the NLRB may ask the United States Supreme Court to decide the issue. For now, employers may want to review their workplace postings to confirm the notice is not on display. This is particularly true for employers that purchase and utilize “universal” workplace posters, which may include the notice.

Notably, the decision has no impact upon federal contractors, who still are required to post a similar notice.

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In a recent decision, Grane Health Care v. NLRB, the Third Circuit ruled that a private healthcare facility and its operator -  in which it has a 99.5% ownership stake and a near complete overlap of company officers - are a single employer subject to the National Labor Relations Act (the “Act” or “NLRA”). Accordingly, the two entities were found to be jointly and severally liable for remedying unfair labor practices committed by either of them.

Background

Grane Health Care (“Grane”) purchased the Laurel Crest Nursing and Rehabilitation Center from Cambria County, Pennsylvania. Then Grane transferred the property to a newly-established entity it formed to operate the property, Cambria Care Center. Prior to the sale, Laurel Crest was subject to Pennsylvania’s Public Employees Relations Act (“PERA”) and had two unions - Local Union No. 1035 (“Local 1035”), which represented the nonprofessional employees, and the Service Employees International Union (“SEIU”), which represented the nursing employees. After the sale, employees had to reapply for their positions with the new operating company, Cambria Care. Though a majority of the previous employees were hired by Cambria Care, five represented employees were not. Further, both Grane and Cambria Care refused to bargain with the two incumbent unions. The unions then filed unfair labor practice charges against Grane and Cambria Care.

An Administrative Law Judge held that Grane and Cambria Care were a single employer (the “Company”) subject to the NLRA, that the Company violated Local 1035’s bargaining rights and that the Company violated the Act by not hiring the five employees based on their union affiliations. The National Labor Relations Board (the “Board”) affirmed the ALJ's findings, adopted its decision, and ordered the Company to recognize and bargain with Local 1035 and to hire the five employees to the positions for which they applied. The Company then appealed to the Third Circuit.

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Earlier this week, the National Labor Relations Board (the “Board” or the “NLRB”) announced it will petition the United States Supreme Court to review Canning v. NLRB, No. 12-1115 (D.C. Cir. Jan. 25, 2013). As previously reported, in Canning the Federal Court of Appeals for the District of Columbia held that three appointments of officers to the NLRB by President Obama were unconstitutional because they lacked the “Advice and Consent” of the Senate and were not authorized by the Constitution’s so-called Recess Appointments Clause. As a result, the Court concluded that the NLRB does not have the quorum necessary to issue decisions or otherwise act. The Canning decision arguably invalidates hundreds of opinions rendered by the Board this past year. Employers should stay tuned for updates on the NLRB’s petition, and feel free to contact an attorney in the Gibbons Employment & Labor Law Department regarding any questions about the decision in Canning or prior NLRB rulings.

James J. La Rocca is an Associate in the Gibbons Employment & Labor Law Department.

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Now well over a year ago, the National Labor Relations Board (the “Board” or “NLRB”) issued a rule requiring most private sector employers to post a notice of employee rights to unionize in their workplaces. The posting requirement was initially to take effect on November 14, 2011. The requirement was postponed, first, until January 31, 2012, and, then again, until April 30, 2012 in light of legal challenges to the rule. Prior to the April 2012 “effective date,” the NLRB announced that it would once again postpone the rule—this time indefinitely “until the legal issues are resolved.” As recently reported, the Board’s great laid plans may go further awry in light of a federal appellate court decision challenging the NLRB’s ability to take any further action until at least one more Board Member is lawfully appointed. For answers to questions regarding the posting, or the Boards's current state of affairs, please feel free to contact an attorney in the Gibbons Employment & Labor Law Department.

James J. La Rocca is an Associate in the Gibbons Employment & Labor Law Department.

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In a groundbreaking opinion, the District of Columbia Court of Appeals has ruled that three appointments of officers to the National Labor Relations Board (the “Board” or the “NLRB”) by President Barack Obama were unconstitutional because they lacked the “Advice and Consent” of the Senate and were not authorized by the Constitution’s so-called Recess Appointments Clause. As a result, the Court vacated the underlying Board decision that gave rise to the appeal, concluding that the NLRB had no authority to issue the decision because only two of its five members were validly appointed. Thus the Board lacked the quorum necessary for it to take action. The ruling has widespread implications for the NLRB as well as the President’s overall “recess appointment” powers.

The Court’s decision, Canning v. NLRB, No. 12-1115 (D.C. Cir. Jan. 25, 2013), arguably invalidates hundreds of opinions rendered by the Board this past year. Some of these decisions have been controversial, such as the Board’s recent decision that seemingly innocuous language found in employment policies unlawfully restrains workers’ rights to unionize. And the Canning decision may end the longstanding Presidential practice of appointing government officers, like Board Members, when the Senate is not on a formal recess in between Senate sessions.

Notably, the Canning decision is at odds with a decision by the Eleventh Circuit Court of Appeals in 2004 upholding President George W. Bush’s appointment of a federal judge during an intra-session Senate break. The circuit split virtually guarantees that the Board will ask the Supreme Court to weigh-in. NLRB Chairman Mark Gaston Pearce issued a press release within hours of the decision in Canning, announcing that the Board “respectfully disagrees” with the decision, and “believes that the President’s position in the matter will ultimately be upheld.” The Chairman made clear that the NLRB will continue to issue decisions (although it has no power to do so according to the Court in Canning).

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Over the past two years, the National Labor Relations Board (the “Board”) has attacked various employment policies of union and non-union employers alike, ranging from social media policies to policies that establish protocol for employees to follow when responding to media inquiries. The Board also has been critical of at-will language commonly found in employee handbooks and policies used by employers throughout the country. In light of the Board’s recent actions, some employers—particularly non-union employers that have not historically focused on Board developments—have begun to reassess policy language that has long existed in their handbooks. Due to a recent administrative law judge (“ALJ”) decision, employers should add employment agreements to their list of employment practices to review and Board developments to watch in 2013.

Last week, in Quicken Loans, Inc., No. 28-CA-75857 (N.L.R.B. A.L.J. Jan. 8, 2013), an ALJ upheld a challenge to confidentiality and non-disparagement provisions in an employment agreement distributed by an employer to its workers (mortgage bankers) nationwide. The ALJ concluded that the language “chilled” employees’ rights to engage in protected concerted activities in violation of the NLRA, despite the employer’s argument that the provisions were necessary to protect its investment in educating and training workers.

Language at Issue

The “Proprietary/Confidential Information” provision in the employment agreement prohibited employees from disclosing, among other things, “non-public information relating to . . . the Company’s business, personnel[,] . . . all personnel lists, [and] personal information of co-workers . . . such as home phone numbers, cell phone numbers, addresses and e-mail addresses” to “any person, business or entity.”

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In a recent decision, a NLRB administrative law judge (the “ALJ”) found three policies in the Dish Network’s nationally-distributed handbook unlawful: a social media policy, a policy that restricts contact with the media, and a policy that restricts contact with government agencies. While the challenge to the social media policy is nothing new, the decision serves as a reminder for union and non-union employers alike that no policy is safe from scrutiny by the National Labor Relations Board (the “Board” or the “NLRB”).

Following recent Board guidance, the judge initially found the social media policy unlawful for two reasons: first, it banned "disparaging or defamatory comments about DISH Network," which the ALJ concluded could interfere with employee rights to engage in protected concerted activity, such as making collective complaints about terms and conditions of employment; and second, it banned employees from communicating electronically during "Company time," which the judge concluded was unlawful because "Company time" did not clearly exclude breaks and other non-working hours.

The ALJ then critiqued the other two policies with similar scrutiny.

The Contact with the Media Policy read:

The Corporate Communications Department is responsible for any disclosure of information, to the media regarding DISH Network . . . . Unless you receive prior authorization . . . you must direct inquiries to the Corporate Communications Department. Similarly, you have the obligation to obtain the written authorization of the Corporate Communications Department before engaging in public communications regarding DISH Network or its business activities. . . .

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The Gibbons Employment & Labor Department, and three of its attorneys, were among the 10 Gibbons practice areas and 20 individual attorneys ranked in the 2012 edition of the Chambers USA Guide to America’s Leading Lawyers for Business. Chambers annually rates the nation’s leading business lawyers and law firms through comprehensive interviews with top companies, attorneys, and business executives, plus extensive supplementary research.

The Chambers editorial and client testimonials included below highlight the Gibbons Employment & Labor Department and its attorneys:

Labor & Employment: This prestigious New Jersey firm has clear strength and expertise in the employment law arena. It has successfully defended multiple employers in race, age, and disability discrimination, retaliation and harassment claims over the past year. The team represents a range of clients in the pharmaceutical, financial and manufacturing sectors. Sources say: “The firm is very practical, to the point and thorough, and the fees are reasonable.”

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As previously discussed on the Employment Law Alert, the National Labor Relations Board (the “Board” or the “NLRB”) recently implemented a rule that could speed up the union election process and, in turn, leave employers with less time to communicate their positions on unions to employees. Yesterday, the United States District Court for the District of Columbia declared the rule invalid because only two Board members were “present” when the NLRB passed the rule last December. The Court explained that the Board did not satisfy the National Labor Relations Act’s requirement that the NLRB have a quorum (typically the presence of three Board members) to conduct business when it voted on the rule. “According to Woody Allen, eight percent of life is just showing up,” wrote the Court. “When it comes to satisfying a quorum requirement, though, showing up is even more important than that.”

The Board was comprised of three members when it voted on the final rule, but one of the three Board members, Brian Hayes, took no action whatsoever regarding the adoption of the final rule. The Court noted that Member Hayes merely received electronic notification that the final rule had been circulated for a vote. It did not find his earlier votes against prior versions of the rule and a vote regarding a procedural issue surrounding the final rule sufficient to constitute his presence at the vote on the final rule.

Significantly, the Court did not opine on the legality of the substance of the rule. We must wait to see whether the current Board will try to adopt the rule, and, if so, whether the rule will survive additional legal challenges. In addition to challenges to the rule’s substance, business groups may challenge the current Board's authority to adopt the rule in the first place. On January 4, 2012, President Obama appointed three new members to the Board as "recess" appointments, but it is not clear that the Senate actually was on recess at the time. There, of course, remains the possibility that the Board will appeal the Court’s ruling as well. We will keep you posted.

*****

Employers potentially subject to union organizing should speak with a lawyer in Gibbons Employment & Labor Law Department about measures they can take to insulate themselves from unionization, and minimize the chances that their workers look outside their organizations to resolve workplace issues.

James J. La Rocca is an Associate in the Gibbons Employment & Labor Law Department.

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On December 22, 2011, the National Labor Relations Board (the “Board” or the “NLRB”) issued another “union-friendly” rule that could speed up the union election process, leaving employers with limited time to respond to a union organizing drive. A pending lawsuit challenging the legality of the new rule is outstanding. Notwithstanding, the rule applies to all newly-filed election petitions effective today as the court has not postponed the rule’s effective date despite the ongoing litigation. The court will rule on the legitimacy of the rule by May 15 (before an election could take place under the new rule).

Initial Hearing to Take Place a Week or Two After a Petition’s Filing

A memorandum recently issued by the NLRB’s Office of the General Counsel directs the Regional Offices to hold an initial hearing within five working days of a petition’s filing. The Regions may grant adjournments, but the hearing must take place no later than 14 days after the petition’s filing absent extraordinary circumstances. In short, a pre-election hearing almost always will take place a week or two after a petition is filed.

Pre-Election Hearings Limited to Questions Concerning Representation

In an attempt to hasten the pre-election process, the new rule limits pre-election hearings to questions concerning representation. This includes questions regarding limited issues, such as election bars, jurisdictional questions, unit eligibility formulas, unit scope determinations and whether a petitioned-for unit is appropriate. This generally will not include questions concerning the voting eligibility of individual workers, which formerly were “fair game” for the pre-election hearing. An election usually will be held before questions about the eligibility of individual workers are addressed.

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The U.S. Court of Appeals for the D.C. Circuit entered an order yesterday in National Association of Manufacturers v. National Labor Relations Board, enjoining an NLRB posting requirement that would require most private sector companies to post a Notice of Employee Rights under the National Labor Relations Act in their workplaces. The D.C. Circuit ruling came on the heels of the District of South Carolina’s opinion last Friday in the Chamber of Commerce v. NLRB case, which held that the NLRB exceeded its authority when it approved the posting requirement.

As we reported Monday in the Employment Law Alert, the deadline for employers to comply with the NLRB’s posting requirement had been set for April 30, 2012. Following the D.C. Circuit’s ruling, the NLRB announced that in light of the D.C. Circuit order and “the strong interest in the uniform implementation and administration of agency rules,” it will not implement the final rule requiring posting of the employee rights notice until the legal challenges to the rule are resolved by the courts. Accordingly, employers are not required to comply with the posting requirement until further notice.

The Employment Law Alert will continue to follow this issue and will post additional updates as they become available. In the meantime, if you have questions regarding the NLRB Notice of Employee Rights or its implications for your company, please contact an attorney in the Gibbons Employment & Labor Law Department.

Kristin D. Sostowski is a Director in the Gibbons Employment & Labor Law Department.

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As we have previously reported in the Employment Law Alert, an National Labor Relations Board (NLRB) final rule adopted last August requires most private sector employers -- including companies that are not unionized -- to post in their workplaces a Notice of Employee Rights under the National Labor Relations Act. The deadline for employers to comply, which has been extended twice in the wake of lawsuits challenging the Board’s authority to issue the rule (see our follow-up reports here and here), is currently set for April 30, 2012.

Last Friday, with the deadline for posting only two weeks away, the District of South Carolina issued a opinion in the Chamber of Commerce v. NLRB case, holding that the NLRB exceeded its congressional authority when it approved the posting requirement and striking down the rule. This decision conflicts with a ruling by the District Court for the District of the District of Columbia last month in National Association of Manufacturers v. NLRB. That court upheld the posting requirement, but held that certain of the enforcement provisions violated the NLRA.

As of now, the NLRB posting requirement remains scheduled to go into effect on April 30, 2012. Accordingly, private sector employers subject to the jurisdiction of the NLRB should continue their preparations to comply with the new rule and to address employee questions that may arise in response to the Notice. The Employment Law Alert will continue to follow this issue and will post additional updates as they become available.

Details regarding the Notice and the posting requirements as they currently stand follow.

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We previously reported that the National Labor Relations Board (the “Board” or “NLRB”) issued a final rule requiring most private sector employers to post a notice of employee rights to unionize in their workplaces. In a follow-up report, we explained that the Board delayed the posting’s effective date from November 14, 2011 until January 31, 2012 in the wake of lawsuits filed by business and industry organizations (including the United States Chamber of Commerce, the National Association of Manufacturers, and the National Federation of Independent Business) challenging the NLRB’s authority to issue such a rule. The Board recently announced that it once again is postponing the effective date of the posting -- this time until April 30, 2012 -- in order to “facilitate the resolution of the legal challenges that have been filed with respect to the rule.” We continue to encourage employers to take advantage of this additional time to assess the potential impact that the required posting may have on their workplaces and the manner in which they may want to communicate with employees regarding their positions on unions (if any). Attorneys in Gibbons Employment & Labor Law Department have extensive experience counseling both union and non-union employers regarding labor relations issues. If you have any questions regarding the impact that this rule may have on your business, please feel free to contact any of the attorneys in the Department.

James J. La Rocca is an Associate in the Gibbons Employment & Labor Department.

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As previously reported in the Employment Law Alert, the National Labor Relations Board (the “Board” or “NLRB”) recently issued a final rule requiring most private-sector employers to post a notice of employee rights to unionize in their workplaces. On October 5, 2011, the Board announced that it is delaying the posting’s effective date from November 14, 2011 until January 31, 2012 “in order to allow for enhanced education and outreach to employers, particularly those who operate small and medium sized businesses.”

The postponement comes in the wake of lawsuits filed by business and industry organizations, including the United States Chamber of Commerce, the National Association of Manufacturers (“NAM”) and the National Federation of Independent Business (“NFIB”), challenging the NLRB’s authority to issue such a rule. (The lawsuits filed by NAM and NFIB have been consolidated). These pending suits may have contributed to the Board’s decision to delay the posting requirement.

Employers should take advantage of this additional time before the rule becomes effective to assess the potential impact of the required posting on their workplaces, and the manner in which they may want to communicate with employees regarding their positions on unions (if any). As we have previously discussed, the notice does not cover certain key aspects of the National Labor Relations Act (the “Act”) of which employees should be aware in order to make an informed decision about whether to vote for unionization. For example, the notice fails to mention that neither a union nor an employer are required to make a single concession during the collective bargaining process. Consequently, employees reading the notice may not understand that their decision to elect a union does not guarantee that their employment will be governed by a collective bargaining agreement. Employers may want to address issues such as this with employees through a supplemental notice or training of front-line supervisors on how to lawfully and effectively address questions employees may have about unions.

Attorneys in Gibbons Employment & Labor Law Department have extensive experience counseling both union and non-union employers regarding labor relations issues. If you have any questions regarding the impact that this rule may have on your business, please feel free to contact any of the attorneys in the Department.

James J. La Rocca is an Associate in the Gibbons Employment & Labor Law Department.

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The National Labor Relations Board (the “Board” or “NLRB”) recently issued a final rule requiring most private-sector employers to post a notice of employee rights under the National Labor Relations Act (the “Act” or “NLRA”) in their workplaces. (Chapter 1 of the Board’s An Outline of Law and Procedure in Representation Cases details which employers fall within the Act’s jurisdiction.) Business and industry associations, including the United States Chamber of Commerce, the National Association of Manufacturers, and the National Federation of Independent Business have filed suits challenging the Board’s authority to issue such a rule. Absent a decision by the courts that, in the words of NLRB Member Brian Hayes -- who issued a dissent to the rule (starting at page 54037) -- would “rescue the Board from itself and restore the law to where it was before the sorcerer’s apprentice sent it askew,” employers must post the notice by November 14, 2011.

Most employers already are required to post notices regarding other workplace laws in a readily visible location, and federal contractors presently must conspicuously post a notice substantially similar to the one at hand. The new posting must appear alongside these and other notices concerning personnel rules or policies. For example, employers who customarily post personnel rules and policies on internet or intranet sites must post the notice on such sites in addition to physically posting the notice. Moreover, where at least 20% of an employer’s workforce is comprised of employees who are not proficient in English and speak another language, the employer must post the notice in that other language too (so long as the NLRB translates the notice in that language).

The potential penalties for failing to post the notice can prove significant. First, the very failure to post can, by itself, constitute an unfair labor practice according to the rule. Additionally, the Board may extend the Act’s six-month limitation period for the filing of any other unfair labor practice charge against an employer who fails to post, even if the failure to post has nothing whatsoever to do with that charge. Furthermore, a knowing and willful failure to post may be used as evidence of unlawful motive by the employer regarding any such charge.

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On June 22, 2011, the National Labor Relations Board (“NLRB”) published proposed rule changes in the Federal Register, which, if enacted, will dramatically accelerate the timeframes for union representation elections. One day earlier, the U.S. Department of Labor’s Office of Labor-Management Standards (“DOL”) published proposed rules to narrow the interpretation of the term “advice” as it pertains to the persuader reporting requirements set forth within Section 203 of the Labor-Management Reporting and Disclosure Act of 1959 (“LMRDA”). Together, these proposed changes create new burdens for employers who wish to communicate with employees about collective bargaining and workplace unionization. If enacted, the practical result of these proposed changes (whether intended or not) is that they will create tactical advantages for organized labor that will in turn help unions win an increased number of representation elections.

The NLRB Proposes “Quickie” Elections

Under current NLRB practice and procedure, employers typically have several weeks between the date that a petition for an election is filed and the actual date of the union representation election. Employers will often use this period to communicate with their employees and, in accordance with certain restrictions, campaign in opposition to the union. The NLRB’s proposed rules, however, seek to streamline the NLRB election process and in effect shorten the amount of time for employers to mount such an opposition campaign. Under the NLRB’s proposal, elections that once took weeks could now be held within 10 days.

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The highly publicized “Facebook firing” case, brought by the National Labor Relations Board (NLRB) and discussed in a November 12, 2010 post in the Employment Law Alert, ended with a settlement announced on February 7, 2011. According to the Complaint, American Medical Response of Connecticut Inc. (“AMR”) terminated an employee for criticizing her boss on her Facebook account.

As announced by the NLRB in a news release, AMR will “revise its overly broad rules to ensure that they do not improperly restrict employees from discussing their wages, hours and working conditions with co-workers and others while not at work,” and that they “would not discipline or discharge employees for engaging in such discussions.” AMR’s internet policy had prohibited online comments that “berate” and “slander” supervisors.

In addition, the company also promised that “employee requests for union representation will not be denied in the future and that employees will not be threatened with discipline for requesting union representation.” The allegations involving the former employee’s termination were resolved through a separate, private agreement between her and AMR.

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