The NLRB’s Regional Director in Chicago issued a decision on March 26 in 13-RC-121359 finding the football players at Northwestern University are employees under the NLRA, over the objections of the University. The Regional Director rejected the University’s arguments that the players, who receive “grant-in-aid scholarships” from the University, are more akin to graduate students, held by the Board not to be employees in Brown University, 342 NLRB 483 (2004). The Director also rejected the University’s argument that the players were “temporary employees” who were not eligible for collective bargaining.
Northwestern’s varsity football team consists of 112 players, 85 of whom receive scholarships that pay for their tuition, fees, room, board, and books in the amount of $61,000 per year ($76,000 per year if they take summer classes). The players receive a “tender” letter at the beginning of their football career that describes the terms and conditions of the offer; are subject to certain rules of conduct; and spend 20-25 hours a week in mandatory activities in the off-season, 40-50 hours per week during the season, and 50-60 hours per week during training camp. The Director found that the players performed “services” for the University that generated revenues of approximately $235 million during the nine-year period of 2003-2012 through the team’s participation in the NCAA Division I and Big Ten Conference through ticket sales, television contracts, merchandise sales, and licensing agreements.
The Director distinguished the graduate assistants who were deemed “not employees” in Brown by the amount of time the Brown students spent on educational studies as compared to work duties. Unlike graduate assistants who were deemed primarily students, the Board reasoned that the players spent more time on athletics “than many undisputed full-time employees work at their jobs” and those hours were more than the players spent on their academic studies. Also, unlike the football players, who did not receive any academic credit for playing football, the graduate assistants received academic credit for performing their duties, and for the substantial majority, those duties were a requirement for them to obtain their graduate degree. In other words, the graduate assistants’ relationship with the university was an academic one, whereas the players’ relationship was an economic one based on large scholarships. Third, Northwestern’s academic faculty members did not oversee the players’ athletic duties, which lessened any concern that allowing them to engage in collective bargaining would have a negative impact on educational decisions. Critically, the Board also distinguished between general financial aid, which graduate assistants and fellows receive, and the players’ scholarships, which commentators have dubbed “pay-for-play.”
Although this decision affects only the Northwestern varsity football team, it is certain to have ramifications throughout private college athletics. Commenters have referred to this as a “blockbuster” decision that could change the face of college athletics.
This decision adds to the existing uncertainty of students’ status as employees, given the Board’s decisions. The NLRB has vacillated on the question of whether graduate students, student research assistants, and graduate student teaching assistants who are paid a stipend and required to perform some teaching or research service to their university should be treated as employees. In 2010, the NLRB voted to reconsider its Brown decision, but the parties in the case reached a voluntary agreement in November 2013, and the union withdrew its petition, so Brown is still controlling law. There also has been much litigation regarding whether university faculty are not covered by the NLRA as “management.” And the state of Board law in the medical field concerning medical residents and interns is uncertain since these students also provide compensated services for hospitals.
The parties have until April 9, 2014 to file a Request for Review of the decision with the Board in Washington, D.C. Northwestern said it would appeal the Regional Director’s ruling to the full NLRB in Washington.
NLRB Effectively Scraps Plans (For Now) To Pursue Notice Posting Rule By Deciding Not To Seek Review By U.S. Supreme Court
The National Labor Relations Board (NLRB) has suffered a series of setbacks recently at the hands of federal judges. In December, the Fifth Circuit Court of Appeals largely struck down the NLRB's prohibition on class action waivers in arbitration agreements. Now, on January 6, 2014, the NLRB announced that it won’t seek Supreme Court review of two U.S. Court of Appeals decisions invalidating its Notice Posting Rule, which would have required most private sector employers to post a notice informing employees of their right to organize. The deadline for seeking Supreme Court review passed January 2.
The legal effect of this “non-event” is that it allows to stand two appellate court decisions that invalidated NLRB's 2011 adoption of a rule. In May 2013, the U.S. Court of Appeals for the District of Columbia Circuit held in National Ass'n of Manufacturers v. NLRB, 717 F.3d 947 (D.C. Cir. 2013) that requiring employers to post the statement of rights under the National Labor Relations Act (NLRA) would be inconsistent with Section 8(c) of the act, which essentially gives employers the right to speak freely to their employees so long as the communications aren’t coercive. The Court also held that NLRB lacked authority to promulgate the regulation, because it would have effectively modified the federal statutory time limit for filing unfair labor practice charges. A month later, the Fourth Circuit ruled against the NLRB and sustained a second challenge to the regulation in Chamber of Commerce v. NLRB, 721 F.3d 152 (4th Cir. 2013).
Had the rule gone into effect, the impact on employers who failed to post the notice could have been severe. While the NLRB doesn’t audit employers and can’t assess fines or penalties, the consequences of not posting the notice could have included: (1) extending the time limit for employees and unions to file charges with the NLRB, and (2) a presumption that the failure to post the notice constituted "evidence of unlawful motive” in an unfair labor practice case involving other, unrelated alleged violations of the NLRA.
The More Things Change...
Technically, the notice rule is invalid only in the D.C. Circuit and the 4th Circuit, although it is difficult to imagine that NLRB will actively seek to enforce the rule elsewhere in the country given its defeats in those jurisdictions. But the NLRB could still choose to pursue the rule, possibly even in a different form, sometime in the future.
It is also important to note that the NLRB's decision to abandon its current litigation involving the enforceability of its posting rule does not change other areas of federal labor law. These include employees’ substantive rights to organize, or prohibitions against actions by employers that “chill” employee rights to engage in concerted, protected activity. These include the right to:
- Organize a union to negotiate with employers concerning wages, hours, and other terms and conditions of employment.
- Form, join or assist a union.
- Bargain collectively through representatives of employees’ own choosing for a contract setting wages, benefits, hours, and other working conditions.
- Discuss terms and conditions of employment or union organizing with co-workers or a union.
- Join with one or more co-workers to improve wages, benefits and other working conditions.
- Choose not to do any of these activities, including joining or remaining a member of a union.
The invalidation of the NLRB Notice posting rule also does not affect other posting rules, such as the one issued by the Department of Labor's (DOL) Office of Federal Contract Compliance Programs (OFCCP). That rule requires federal contractors to post workplace notices informing workers of their rights under the NLRA, although this rule is being challenged as well: on December 8, 2013, the National Association of Manufacturers filed a complaint with the trial court for the District of Columbia. That lawsuit seeks declaratory, injunctive and other relief, alleging violations of the First Amendment’s guarantee or the right to speak (and not to speak), challenging the OFCCP’s authority to promulgate such a rule, and on the same grounds as the D.C. Court of Appeals invalidated the NLRB’s notice posting rule. National Association of Manufacturers v. Perez, D.D.C., No. 13-cv-1998, complaint filed 12/18/13.
Stay tuned for further developments on this front right here at Stoel Rives World of Employment.
11th Circuit Disagrees With NLRB And Finds Nurses Are "Supervisors" In Lakeland Health Care Decision
Several weeks ago the U.S. Court of Appeals for the 11th Circuit weighed in on the ongoing debate in labor law over the definition of who is a “supervisor,” and therefore not eligible to join a union, under the federal National Labor Relations Act (“NLRA”). The opinion, Lakeland Health Care Associates , is but the latest installment in an area of labor law that has been evolving over at least the past decade. While this line of cases, including Lakeland Health Care, are specific to the “supervisor” status of nurses working in the residential care industry, the relevant legal tests are the same for all industries. Employers who may wish to oppose unionization efforts among employees it believes are supervisors will therefore want to continue to pay close attention to these cases to see what could be done to maximize the chance that the National Labor Relations Board (“NLRB” or “Board”) would also find those employees are supervisors.
LPNs Supervise Other Employees, But Are They “Supervisors” Under The NLRA?
As with many things in labor law, determining who is a “supervisor” is rarely straightforward: simply giving someone the title of “supervisor” is never enough. In many cases employees may have only partial supervisory authority—the issue in cases like Lakeland Health Care is whether the employees had enough supervisory authority to be “supervisors” under the NLRA.
Lakeland Health Care operates residential care facilities (until recently known commonly as “nursing homes”). Consistent with industry-wide practice, Lakeland Health Care staffs its facility primarily with Certified Nursing Assistants (“CNAs”), who perform most of the day-to-day work providing physical care to residents—such as feeding, dressing, bathing, turning, etc.—and charge nurses, usually Licensed Practical Nurses (“LPNs”) or sometimes Registered Nurses (“RNs”), who provide basic medical care to residents such as administering medication, inserting or monitoring intravenous lines, and performing blood draws. Also consistent with industry practice, the RNs and LPNs have general day-to-day supervision over the CNAs with whom they work each shift, but do not have independent hire/fire authority.
Section 2(11) of the NLRA and related case law has a very detailed and complex definition of who is a “supervisor.” To summarize, a “supervisor” is any employee who has the authority to hire, fire, discipline, or assign work to other employees, or to effectively recommend any of those actions, or who “responsibly direct[s]” other employees in their day-to-day work. The supervisor must also use “independent judgment” in performing those supervisory functions and not merely report employee conduct to higher level managers to take action. Those who meet the "supervisors" tests are not "employees" eligible to organize into unions under the NLRA.
After reviewing the testimony of company witnesses, and employee handbooks and written job descriptions, the 11th Circuit concluded, in contrast to the NLRB, that the Lakeland Health Care LPNs were supervisors under that NLRA definition. Specifically, the Court found that even though LPNs could not hire or fire CNAs, they could independently issue them written and verbal coaching (i.e., discipline) and assign work. The Court also found that LPNs “responsibly directed” CNAs in their day-to-day work in that the LPN ultimately could be held responsible, and disciplined, if the CNAs failed to provide adequate care to residents. The Court found that the LPNs exercised sufficient “independent judgment” in performing all of these functions with respect to CNAs.
A Brief Recent History Of “Supervisor” Status
The supervisory status of charge nurses in the residential care industry has been the subject of much labor litigation over the past 10 years (perhaps because that industry has specifically been targeted for organization drives by many major national and local unions). While the reasoning in Lakeland Health Care summarized above may sound straight-forward, other cases with nearly identical facts have reached very differently results. These differing outcomes make it difficult for employers to know when employees are supervisors, and appear to be largely influenced by two factors.
First, the NLRB’s own interpretation of the law can change dramatically over time depending on whether a pro-union Democrat or pro-business Republican is President. For example, in 2006 the Bush-era Board issued employer-friendly decisions that broadly applied the “supervisor” exception in its Oakwood Health Care “trilogy” (also involving the status of charge nurses in residential care facilities). In so doing, Oakwood Health Care departed from Clinton-era NLRB decisions that had made it much more difficult to show that employees like LPNs are “supervisors.” In recent years, the Obama Board has distinguished Oakwood Health Care to turn back the clock to the broader Clinton-era interpretations of “supervisor.” Perhaps most difficult, the NLRB rarely outright reverses earlier opinions, but instead tries to find subtle factual nuances to harmonize its decisions, even though the different outcomes sometimes seem to be based on very similar factual patterns.
Second, there is also tension between the (generally pro-union) NLRB and the federal circuit courts, which have jurisdiction to reverse those decisions and may tend to be more pro-employer. For example, the 11th Circuit in Lakeland Health Care specifically held that the employer must only show that the LPNs have the authority to perform the supervisory functions (through written job descriptions, handbooks, and the testimony of managers), not that they demonstrate a practice of actually having used that authority in specific cases. That holding may be a departure from recent cases where the Board found under virtually identical facts that charge nurses were not supervisors, because, even though written policies and job descriptions showed they had supervisory authority, they did not actually discipline CNAs, or did not do so often enough.
Back To The Future: More Conflicting Decisions To Come?
It will be interesting to see how the Obama Board will respond to the 11th Circuit’s opinion in Lakeland Health Care. As we have blogged about repeatedly, the current Obama Board has been very active, tends to be pro-union, and is not afraid of taking positions potentially at odds with federal courts, even the U.S. Supreme Court. And the NLRB could only be emboldened now that President Obama has won re-election. It is therefore difficult to see how this tug-of-war will play out. Maybe the only thing that is certain is that more fireworks are likely over the next few months and years in this area.
In the meantime, Lakeland Health Care may offer some help to employers who wish to oppose unionization efforts involving potentially supervisory employees. While circuit court opinions are not technically binding on the NLRB or its regional offices, they can be persuasive authority. Also, while this line of cases is particularly relevant for employers like Lakeland in residential care, the “supervisor” tests are the same everywhere. Employers in all industries may wish to pay particular attention to the weight the 11th Circuit gave to the handbooks and written job descriptions, which helped show that the LPNs in that case had the necessary supervisory authority, and revise their own written job descriptions if needed. If you find yourself in an NLRB hearing involving the supervisory status of employees, the quality of your written job descriptions and handbooks could help make the difference in proving your case.
The National Labor Relations Board (“NLRB”) continues to closely scrutinize employers’ social media policies and practices. As employers struggle to craft policies that promote productivity while at the same time protect employees’ rights, both unionized and non-unionized employers need to be aware of recent NLRB decisions and their impact on employer policies:
Social-Media Based Termination Can Be Acceptable, But Rule Requiring “Courtesy” Is Not
On September 28, 2012, a three-member panel of the NLRB affirmed the termination of a car salesman who posted photographs on Facebook ridiculing his employer, but it rejected the employer’s rule requiring courteous behavior. (Karl Knauz Motors Inc., 358 N.L.R.B. No. 164, Sept. 28, 2012 [released Oct. 1, 2012]). Knauz marked the first time a panel of the NLRB decided a case involving social media; previously, all NLRB guidance in this area came from ALJ decisions or the Board’s General Counsel Memoranda. In Knauz, a sales employee had complained on his Facebook page about his employer, a BMW car dealership, posting photos and criticizing bad food the dealer offered at a sales event; he had also discussed those concerns with other coworkers. He also posted critical comments and photos about an accident during a test drive at the dealership. The employer terminated the employee for his Facebook postings and for violating the employer’s courtesy policy. That policy stated that “[e]veryone is expected to be courteous, polite and friendly to our customers, vendors and suppliers, as well as to their fellow employees,” and that “[n]o one should be disrespectful or use profanity or any other language which injures the image or reputation of the Dealership.”
The NLRB ultimately declined to decide whether the employee’s complaints about the food were protected activity under the NLRA. The ALJ below had held the food complaints were protected because the employee and his coworkers conceivably were concerned that the low-quality food offered at the sales event would deter customers from coming, thus leading to lower sales commissions for the employees. Instead, the NLRB upheld the employee’s termination, agreeing with the ALJ that the employee’s Facebook postings relating to the on-site accident were not related to any employees’ terms or conditions of employment.
Most interestingly, the NLRB decided, in a 2-1 split decision, that the employer’s rule on courtesy violated the NLRA because it could reasonably be construed by employees as prohibiting protected concerted activities, “such as employees’ protected statements—whether to coworkers, supervisors, managers, or third parties who deal with the Respondent— that object to their working conditions and seek the support of others in improving them.”
Employer Cannot Prohibit Use of Social Media During “Company Time”
On September 20, 2012, an ALJ found that an employer’s policy prohibiting the use of social media on “Company time” violated the NLRA. (EchoStar Techs. LLC, NLRB ALJ, No. 27-CA-066726, Sept. 20, 2012). This decision is consistent with recent NLRB General Counsel Memoranda (here and here), which tend to distinguish between “company time” and “work time.” Indeed, the General Counsel has explicitly approved a social media policy that directs employees to “[r]efrain from using social media while on work time or on equipment we provide.” A restriction as broad as prohibiting social media use during “company time” would encompass nonworking time, such as paid breaks, which could interfere with employees’ ability to exercise their rights to concerted activity under the NLRA.
The employer argued that the social-media prohibition was a common-sense rule designed to prevent employees from engaging in personal activities on the job—a problem that has become pervasive in the workplace, substantially affecting productivity. The employer also argued that the “Company time” prohibition was reasonable in context because it was included in a policy restricting the use of company equipment, which the employer argued it could restrict whether during working time or nonworking time. Without significant discussion, the ALJ simply ruled that the prohibition was unlawful and must be removed from the employee handbook.
What to Take Away
The NLRB law on social media policies is continuing to evolve in favor of employees. It is a delicate line to balance between (1) appropriate limitations on the use of social media, and (2) protecting employees’ rights of concerted activity under the NLRA to confer for their mutual benefit regarding the terms and conditions of employment. It seems clear, however, that broad-based bans on the use of social media during work-time, and efforts to control the nature of employees’ communications on social media as they relate to working conditions, will not be viewed favorably by the NLRB.
In DR Horton, a decision issued on January 3 and applicable to most private sector employers, whether unionized or not, the National Labor Relations Board (NLRB) held that federal labor law prevents employers from requiring their employees, as a condition of employment, to agree to broad waivers that would deny their right to pursue employment-related class actions both in court and in arbitration, leaving them no forum for pursuing class or collective claims. As a result, an important tool for managing the risk of employment-related litigation has been taken away (for now).
The facts of the case are straightforward. DR Horton, like many employers, required its employees to sign an arbitration agreement as a condition of employment. The agreement required employees to arbitrate all claims arising out of their employment, and precluded arbitrators from issuing class or group relief. As a result, employees were prevented from bringing class or collective actions in any forum. Relying on this agreement, DR Horton refused to arbitrate a class action alleging that it had misclassified certain employees as exempt from the protections of the Fair Labor Standards Act (FLSA).
Not so fast, according to the NLRB. Tracing federal labor law back to its origins, the NLRB found that the filing of a class action “to redress workplace wrongs or improve working conditions” is activity at “the core” of what Congress intended to protect when it enacted the National Labor Relations Act in 1935. This intent, the NLRB reasoned, is reflected in Section 7 of the Act, which gives employees the right to engage in “concerted activities” for the purposes of “mutual aid or protection.” Relying on Section 7, the NLRB found that Employers cannot compel their employees, as a condition of employment, to entirely waive the right to bring class or collective actions.
The NLRB’s ruling in DR Horton clashes with the U.S. Supreme Court’s recent decision in AT&T Mobility v. Concepcion, which held that arbitration clauses that waive the right to bring class claims entirely (in the commercial contract context) may be lawful and enforceable. But unless and until the courts intervene to resolve this tension, requiring your employees to completely waive the right to bring employment-related class or collective actions - a common feature of arbitration agreements - is probably no longer permissible under federal labor law.
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Stoel Rives is hosting a webinar on January 11, 2012, to address employee arbitration agreements generally and the DR Horton decision in particular. Click here if you're interested in learning more or attending.
In order to allow more time for legal challenges to its notice-posting rule to be resolved, the National Labor Relations Board has again postponed the rule's effective date, this time to April 30, 2012. Stay tuned.
For additional information regarding the NLRB's new rule and posting requirement, including links to the new rule and the poster employers must post, see our prior post on this topic by following this link.