NLRA Claims in a Nonunion Environment

“Concerted Activity” Coverage
Pay Policies Cannot Prohibit Wage Discussions
Disciplinary Investigations May Require Representation
Employee Committees Limited to Information Gathering
Inconsistent E-Mail Policies
Six Steps to Protect Against NLRA Claims
Outdated Law Catches Many By Surprise

Think a union has to be present before you need to worry about NLRA claims?  Guess again.  Any time your employees participate in “concerted activity,” they are covered.  Find out what claims can arise and the six steps you should take to protect against violations.

Have you ever considered implementing a rule forbidding discussions about pay?  If so, you may be about to violate the National Labor Relations Act (NLRA).  The Act gives all employees, not just union employees, the right to engage in “concerted activities for collective bargaining or other mutual aid or protection.”  This entitlement has been interpreted to protect nonunion employees who question the terms and conditions of their employment. 

As a result, the National Labor Relations Board (NLRB) and the courts have granted nonunion employees the right to discuss their pay, have representation during investigatory interviews, and complain individually about their working environment.  Other decisions have also limited employer participation groups and even e-mail policies.  Clearly, all employers, and not just union organizations, should be concerned about the NLRA’s coverage.  You need to know where you are most vulnerable and understand how best to prevent violations.  Fortunately, you can limit your risks under the law both by keeping an eye on NLRA decisions and by following the six preventative steps outlined below.

“Concerted Activity” Coverage

The NLRA gives employees the right to self-organize; to form, join, or assist labor organizations; to bargain collectively through their own representatives; and to engage in concerted activities for collective bargaining or other mutual aid or protection.  Nonunion employers often face NLRA claims when they take adverse employment action against employees involved in “concerted activity.”  For a concerted activity to be protected, it generally must center on a controversy involving the terms and conditions of employment. 

Thus, if employees take action as a group to complain about your organization’s policies, their actions may be protected.  For example, in Arrow Electric Company, Inc. v. NLRB, 155 F.3d 762 (6th Cir. 1998), the Sixth Circuit found that the employer violated the NLRA when it terminated four nonunion employees who walked off the job to complain about their supervisor’s abusive behavior.  In that case, the employer could not enforce its policy against employees improperly leaving a jobsite since the employees were acting as a group to protest their terms and conditions of employment. 

In addition, even if an employee acts alone, his conduct may be considered concerted activity protected by the NLRA if he is acting on behalf of other employees.  In NLRB v. Caval Tool Decision, 262 F.3d 184 (2d Cir. 2001), the Seventh Circuit determined that the company violated the NLRA when it suspended and put on probation an employee who criticized a new break policy during a company meeting.  The court found that the employee’s comments were protected since they were directly aimed at a change in the terms and conditions of employment.  Similarly, in NLRB v. Main Street Terrace Care Center, 218 F.3d 531 (6th Cir. 2000), an employee was found to have engaged in concerted activity when she talked to management about the wage-related problems of other employees.  

Pay Policies Cannot Prohibit Wage Discussions

Pay policies also can be the basis for NLRA claims. Since wage issues are a frequent objective of employee organizations, rules prohibiting wage discussions have been interpreted to be unlawful interference with the right of employees to engage in organizational and concerted activity.  In fact, a policy does not even have to be in writing to violate the NLRA; it need only be orally communicated to employees.  Again, in NLRB v. Main Street Terrace Care Center, 218 F.3d 531 (6th Cir. 2000), the Sixth Circuit upheld the NLRB’s ruling that the employer violated the NLRA because its managers orally instructed employees not to discuss their wages. 

Disciplinary Investigations May Require Representation

Another potential area of concern is disciplinary investigations.  In the past, most employers have not allowed nonunion employees to have a coworker representative with them during an investigatory interview.  But, in Epilepsy Fdtn. of N.E. Ohio v. NLRB, 268 F.3d 1095 (D.C. Cir. 2001), the D.C. Circuit Court of Appeals upheld the NLRB’s decision that nonunion employees have the same right as union employees to request, and have present, a coworker during an investigatory interview that could lead to discipline.  This privilege exists as part of both union and nonunion employee rights to engage in concerted activities under the NLRA. 

Employee Committees Limited to Information Gathering

Recent decisions by the NLRB also call into question the legality of employee participation committees if the groups involve employees in the decisionmaking process.  (Employee participation committees are a popular way to bring together rank and file employees and members of management to discuss issues affecting the workforce.)  However, these committees may be illegal if they can be considered employer-assisted or -dominated labor organizations and they discuss terms and conditions of employment.

The NLRB evaluates the legality of employee committees using a two-part analysis.  First, it considers whether the committee constitutes a “labor organization” under the NLRA.  A committee is a labor organization if its employee-members participate and “deal with” the employer regarding issues such as wages, hours, or other terms and conditions of employment.  Next, it considers whether the employer has dominated or interfered with the formation or administration of the committee.  This second point is satisfied if management created the committee and determines the committee’s structure, function, and continued existence.

For example, in EFCO Corp., 327 NLRB No. 71 (1998), the NLRB found that the employer violated the NLRA because it selected the members of several committees, set the agenda (which included terms and conditions of employment), and accepted or rejected the recommendations made by the committees.  Similarly, in Polaroid Corp., 329 NLRB No. 47 (1999), the NLRB determined that the employer violated the NLRA because its employee committee was not merely a “unilateral mechanism” for brainstorming or sharing ideas.  Rather, the employer worked with the committee to refine and narrow proposals and responded to the proposals.

Generally, employee committees that have missions limited exclusively to information gathering are allowed.  Thus, in Stoody Co., 320 NLRB No. 1 (1995), the NLRB determined that the employer did not violate the NLRA when it formed an employee handbook committee since the committee was explicitly directed not to discuss terms and conditions of employment.  Instead, it was to determine areas of the handbook that were unclear or inconsistent with current practice.

Inconsistent E-Mail Policies

Another area that can be challenging for nonunion employers is e-mail.  Many employers allow employees to use e-mail to disseminate and exchange a wide variety of information, including personal materials.   Some, however, try to prevent employee use of e-mail to discuss union and other nonbusiness activities and so restrict their e-mail and other communication systems to business use only.  The NLRB generally upholds policies limiting the use of communication equipment and systems as long as the rules do not discriminate against unions while allowing other employee personal activities. 

So, for example, in Adtranz, ABB Daimler-Benz, 331 NLRB No. 40 (2000), vacated in part on other grounds, 253 F.3d 19 (D.C. Cir. 2001), the NLRB determined that the employer can establish a policy prohibiting the nonbusiness use of its e-mail system as long as that rule is consistently applied.  However, the NLRB also noted that if the employer fails to enforce its rule against personal use, it may not prohibit union matters as a topic of discussion on its e-mail system.  The bottom line is that if you allow employees to send and receive nonwork-related e-mail, you may not restrict e-mail discussion of union issues.

Six Steps to Protect Against NLRA Claims

Because the NLRA can impact you in so many different ways, you should have a plan to comply with the law and to recognize potential problem areas.  You can help prevent NLRA claims by taking the following six steps.

1.  Review your policies and procedures to ensure compliance with the NLRA.  Pay special attention to employee participation committees, disciplinary procedures, and pay policies.  In addition, you should stay current on new NLRB decisions.

2.  Make sure employee participation committees do not negotiate with or make recommendations to management.  They should not deal with any issues concerning terms or conditions of employment, such as pay, work rules, and discipline.  To enhance compliance with the NLRA, you also may want to limit the committees specifically to information gathering.

3.  Consider including in your disciplinary policy the right for employees to request coworker representation during investigatory interviews, when the results may be expected to lead to discipline.  Although you are not required to notify your employees of this right, your policy should not prohibit such representation.  In addition, you should have a plan for responding to these requests.

4.  Make sure your pay policy does not prohibit wage discussions.  Many employers want to ban pay discussions in spite of the NLRA’s position.  Instead, you should encourage employees to direct questions or concerns about compensation to the human resources department or appropriate department head.

5.  Evaluate disciplinary actions carefully for any employee expressing disapproval with management policies and procedures.  You should be cautious before disciplining any employee for making remarks that involve NLRA-protected terms and conditions of employment, such as pay, work rules, and discipline.  However, employees who complain about their own personal employment problems (as opposed to voicing concerns about how policies affect the workforce) generally are not covered under the NLRA’s protections. 

6.  Have your attorney check your policies and procedures specifically for NLRA compliance.  Regular legal reviews, particularly when you make policy changes, are a good form of compliance insurance and risk control.

Outdated Law Catches Many By Surprise

When the NLRA was passed in 1935, it was intended to address an imbalance between the strength and concentration of big industrial employers and the newly emerging unions.  But, over time, many of the abuses targeted by the Act have been eliminated, and other employment laws prohibiting discrimination and regulating pay and safety have created many additional employee rights.

At the same time, the economy has shifted from an industrial base to a service and information base, and the structure of business has become more defused and entrepreneurial.  Plus, employees now have greater mobility and many more opportunities.  As a result, the balance in employer/employee relationships has changed dramatically since the original passage of the NLRA.  Unfortunately, the NLRB’s enforcement of the Act often appears to ignore these changes and assumes that the original adversarial relationship is still the order of the day, a stance that catches many nonunion employers by surprise.  So, you should not adopt a “head-in-the-sand” attitude and must take action to protect against these claims.  By following the six steps outlined above, you can effectively manage your NLRA exposure.