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Executive Labor Summary
May/June 2012

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In this Issue:

News and Analysis

The Good, the Bad and the Ugly

By Bob Lemert
Atlanta Office

NEWS & ANALYSIS

Starbucks may limit pro-union "pieces of flair," court says. During a protracted organizing campaign by the Industrial Workers World, Starbucks Corporation entered into an informal settlement agreement with the National Labor Relations Board. The agreement provided that Starbucks, which prohibited employees from wearing any pro-union pins or buttons, would replace that policy with a new one that precluded employees from wearing more than one pro-union button. Pursuant to the new policy, the company asked several employees to remove "extra" pro-union buttons before starting work. That, and the discharges of two employees, were found to be unfair labor practices by the Board. An administrative law judge and the Board agreed that allowing pro-union employees to wear multiple buttons did not seriously harm Starbucks' legitimate interest in employee image.

The Board petitioned the U.S. Court of Appeals for the Seventh Circuit for enforcement, and Starbucks filed a cross-petition. The court upheld one of the two discharges and refused to enforce the Board's decision that Starbucks interfered with the employees' Section 7 rights by prohibiting them from wearing multiple union buttons at work. (The other discharge decision was remanded.) On the button issue, the court emphasized that Starbucks has a comprehensive dress code for its employees to ensure that they "'present a clean, neat and professional appearance appropriate of [sic] a retailer of specialty gourmet products'" and also encourages employees to wear multiple pins and buttons, issued by Starbucks, as part of its employee-reward and product-promotion programs. Starbucks argued that the Board's ruling would convert employees into "personal message boards" and "seriously erode" the information conveyed by the company-issued pins.

The court agreed with Starbucks, applying a 2006 NLRB ruling in which the Board recognized that special circumstances can justify restrictions on union insignia or apparel when their display unreasonably interferes with a public image that the employer has established. Here, according to the court, "Starbucks is clearly entitled to oblige its employees to wear buttons promoting its products, and the information contained on those buttons is just as much a part of Starbucks' public image as any other aspect of its dress code. But the company is also entitled to avoid the distraction from its messages that a number of union buttons would risk.... Starbucks has met its burden of establishing that the one button restriction is a necessary and appropriate means of protecting its legitimate managerial interest in displaying a particular public image through the messages contained on employee buttons."

Court issues 10(j) injunction to reinstate union supporter. Some employers have been accused of trying to chill union support by discharging key union supporters. Then, while they contest the legality of the discharge through the lengthy NLRB complaint, hearing, review and appeal process, employee support for the union may often wane. The Board recently scored against an employer who was allegedly using this tactic in Harrell v. Big Ridge, Inc. Judge Patrick Murphy granted a 10(j) injunction reinstating a 28-year employee who was a strong union supporter pending the final disposition of his discharge, effectively preventing the employer from reaping any benefit from the delays in the NLRB process. The judge found that the discharge, as well as other actions that immediately followed a vote in favor of union representation, had a chilling effect on union support, dramatically shifting the status quo. As time passed, the company's actions diminished the union's ability to organize and effectively represent the employees. Judge Murphy also concluded that the union and the NLRB were without an adequate remedy at law, so granting a Section 10(j) injunction reinstating Waller and prohibiting other illegal actions by the company would serve the public interest.

NLRB continues its assault on waivers compelling arbitration. In January of this year, the NLRB ruled that an employer committed an unfair labor practice by maintaining a mandatory arbitration agreement that waived the rights of employees to participate in class or collective actions, even in situations involving non-NLRA issues under Title VII of the Civil Rights Act of 1964 and the Fair Labor Standards Act. Recently, the Board expanded its attack to include waivers where employees have been given an opportunity to "opt out" of the arbitration of disputes policy. Region 20 (San Francisco) has issued a complaint against 24 Hour Fitness for maintaining and enforcing an employee handbook with provisions requiring employees to arbitrate employment-related disputes, including claims arising under the federal anti-discrimination laws and the FLSA, as well as the Family and Medical Leave Act, the Employee Retirement Income Security Act, and state statutes, but allows employees to "opt out" of arbitration within 30 days of receiving the handbook. The NLRB complaint cites eight cases, all involving classwide wage and hour violations in California, Florida and Texas, in which 24 Hour Fitness has used its waiver to compel plaintiffs to arbitrate their class claims individually. According to a statement by NLRB Acting General Counsel Lafe Solomon reported by Bloomberg BNA, such waivers violate Section 8(a)(1) of the National Labor Relations Act, and the inclusion of an "opt-out" provision does not shield the employer from claims of unlawful interference with employees' rights to engage in concerted action.

. . . but state court refuses to follow Board's D.R. Horton rule. In Iskanian v. CLS Transp., Los Angeles, LLC, the California Court of Appeals refused to give any deference to the D.R. Horton decision. The court affirmed a lower court's order that required a California truck driver to arbitrate his wage and hour claim against CLS Transportation. According to the court, "If D.R. Horton only involved application of the NLRA we would most likely defer to it," but the decision "went well beyond an analysis of the relevant sections of the NLRA."

Employer must read remedial notice to 15 employees. Where violations of the Act are serious and widespread, the NLRB can require that an official of the employer personally read its remedial notice to the affected employees. In Jason Lopez' Planet Earth Landscape, Inc., a 2-1 majority of Chairman Mark Gaston Pearce and Member Richard Griffin, Jr., decided that the employer's president and owner must read the Board's remedial notice to a bargaining unit of only 15 employees. The majority justified the owner's reading of the remedial notice because the employer had laid off two primary union supporters in the 15-employee unit and was found to have committed numerous other serious violations, including threatening to close the business if the union won the election, promising an employee more lucrative jobs if he stopped supporting the union, and providing money to employees to discourage them from engaging in organizing activities. Because the owner was found to have personally committed the unfair labor practices, the Board majority believed the remedy would assure employees that the owner personally acknowledged their rights and would not interfere with their exercise of those rights in the future.

Republican Member Terence Flynn dissented. According to Flynn, the employer's violations were serious but not widespread because most of them were directed toward a single employee. Moreover, he said, the Board majority presumed that the violations had an effect on the rest of the employees, but there was no evidence in that regard. (Flynn is no longer active on the Board and has resigned effective July 24. See below.)

THE GOOD, THE BAD AND THE UGLY

And then there were four: Member Flynn's resignation effective July 24. We previously reported that Republican Board Member Terence Flynn was under pressure after allegations that he had improperly disclosed Board information to two former members, both Republicans, after they had left the Board. One of the former Board members is involved in Mitt Romney's presidential campaign. On May 26, Flynn resigned effective July 24 but immediately recused himself from "all NLRB activities." The remaining four Board members issued a joint statement, concluding, "While we as a Board may occasionally differ on matters of law, we are united in our high regard for this Agency and our commitment to fairness, collegiality and integrity."

Becker returns to the fold. The AFL-CIO has announced that Craig Becker, a former Democrat member of the NLRB, will soon join the labor federation as Co-General Counsel. Before his controversial recess appointment and term with the Board, Becker served as Associate General Counsel for the Service Employees International Union and also as an AFL-CIO Staff Counsel.

UAW goes after Nissan workers in Mississippi – third time's a charm? The UAW predicted a campaign before the end of 2011 at the new Volkswagen plant in Chattanooga, Tennessee, but the campaign did not materialize. Now the UAW plans to make a third attempt to organize workers at a 3,300-worker Nissan assembly plant in Canton, Mississippi. According to autoblog, the UAW made unsuccessful attempts in Canton in 2005 and 2007.

"Shop at Walmart," says the NLRB, ". . . or at least use their social media policy as a go-by." NLRB Acting General Counsel Lafe Solomon has issued a third report on social media policies, discussing seven recent cases. In six cases, Solomon's office found that provisions in the policies were overbroad and in violation of Section 7 of the Act. However, the Walmart revised social media policy for its U.S. employees was found to be both unambiguous and lawful, and Solomon was good enough to attach a copy to his report. Constangy's blog, Employment & Labor Insider, provides a list of "do's and don'ts" gleaned from the lengthy memorandum, but the most important "do" was "DO use the Walmart policy as a go-by, and go in peace."

NLRB reaches out to non-union workers with web page on protected concerted activity. Undeterred by the recent court hold on its attempted notice-posting requirement, the Board on June 18, 2012, rolled out a webpage to publicize the scope of "protected concerted activity" under the NLRA. The website uses a colorful, attractive map of the nation with points for readers to "scroll over" for stories of employees, apparently in non-union settings, who engaged in various types of concerted activity and obtained relief from the Board after employers had acted to discipline or discharge them. The stories "mapped out" include the following: a construction crew fired for refusing to work in the rain near electrical wires; a customer service representative fired after discussing wages with a co-worker; a worker at a vegetable packing plant fired after reporting safety issues; a worker fired after posting a grievance on Facebook; workers fired after talking about grievances with a newsperson; and employees fired or disciplined after postings on YouTube, signing petitions, or sending letters complaining about various employment matters. In an announcement hailing the webpage's rollout, Chairman Pearce makes it clear that the Board wants to advertise its availability to remedy perceived wrongs suffered by employees in any setting, "even if they aren't in a union." He asserts, "We think the right to engage in protected concerted activity is one of the best kept secrets" of the Act. With the new webpage, the Board continues its recent push to make itself more relevant in non-union workplaces.

Unions not doing so well – or are they? – don't uncork that champagne just yet. Bloomberg BNA reports that unions won fewer elections in 2011, as well as a lower percentage of all elections. However, the publication notes that elections are not the only measure of union success because "many unions organize through other methods including neutrality and card-check recognition agreements." In addition, unions were successful in a dramatically increased number of decertification elections, with a win rate of 48 percent in 2011 versus 39.8 percent in 2010. Copies of BNA's full report are available for $125.

Board tries "electronic room" argument. As we reported, the U.S. District Court for the District of Columbia has ruled that the NLRB's new "quickie election" rules were invalid because they were not adopted by a "properly constituted" three-member quorum of the Board. Only two members of the Board, both Democrats, Chairman Pearce and then-Member Becker, voted to approve the rule changes. Although Republican Member Hayes received electronic notice of the proposal, he did not vote on the final action.

The NLRB has now filed a motion asking the district court to reconsider its ruling. The NLRB contends that Member Hayes was, indeed, "present and participating" in the Board's "electronic room" where Pearce and Becker approved the rule changes. According to the motion, the district court had a "mistaken understanding" about the voting procedure used. Member Hayes had designated both his Chief Counsel and Deputy Chief Counsel to act for him in the electronic room. After the last modified version of the rulemaking proposal was posted into the electronic room, Hayes' Deputy Chief Counsel opened the posting but did not cast a vote for Hayes. The motion argues Hayes was, therefore, "present in the Board's electronic voting room" but chose to abstain from voting on adoption of the rule. According to the Board, this action did not deprive the Board of the quorum needed for Board action.

At the time of this writing, the Chamber of Commerce has not responded to the Board motion.

About Constangy, Brooks & Smith, LLP
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