When California’s Dynamex decision rolled out the “ABC test”, it placed the burden on the employer to prove independent contractor (IC) status. In a presentation at the Employment and Employee Benefits Forum in California, McDermott’s lawyers discussed the implications of Dynamex, as it applies to various types of employers as well as those using staffing companies. Additionally, they cover Dynamex’s impact on worker classification and employee benefits plans, particularly under ERISA.

Lastly, they provide best practices that employers can do now to prevent litigation.

View the full presentation.

by Stephen D. Erf, Heather Egan Sussman and Sabrina E. Dunlap

Two weeks ago, we wrote about a decision from an Administrative Law Judge (ALJ) (available here) finding that the National Labor Relations Act (NLRA) protected an employee’s Facebook comments made about his employer.  Last week, an ALJ issued another decision involving social media and the NLRA, finding that an employee had engaged in some protected activity, but that he was ultimately fired for other, unprotected activity.  In Karl Knauz Motors, a former salesperson claimed that he was fired after he posted pictures and comments on Facebook criticizing his employer’s choice of serving hot dogs at a sales event introducing the new BMW 5-series.  The National Labor Relations Board (NLRB) recently issued a report related to social media (found here), in which it noted the employee’s posts in the BMW case were protected activity because they related to the terms and conditions of employment.

While the ALJ agreed that the employee had engaged in protected activity in discussing the sales event, the Judge held that the employer actually terminated the employee for his other Facebook posts, which mocked a co-worker for allowing a teenager to test drive a Land Rover, who ultimately drove the car into a nearby pond.  The Judge found that the NLRA did not protect such a posting because it had no connection to the terms and conditions of employment, and was posted solely by the employee, not as part of a discussion with other employees.  Therefore the employer did not violate the NLRA when it fired the employee.

In addition to the Facebook postings, the Judge also considered whether four provisions of the employer’s handbook violated Section 7 of the NLRA.  The Judge dismissed the complaint regarding a provision that encouraged employees to have a good attitude at work, because it could be read to protect the relationship between the dealer and its customers, rather than to restrict employees’ Section 7 rights.  However, the Judge held that the three remaining provisions, which each limited employees’ right to speak about employment, violated the NLRA because they all could be read as curtailing employees’ Section 7 rights, and if employees complied with these restrictions, they would not be able to discuss working conditions with union representatives or lawyers.

Based on this ALJ decision, employers should continue to exercise caution when making employment decisions based on social media comments.  There continues to be a fine line between protected activity and unprotected activity when it comes to employees’ social media comments about their employers.  In addition, employers should review and possibly revise their handbooks to ensure they cannot be read as restricting employees’ Section 7 rights.

by Sabrina E. Dunlap, Stephen D. Erf and Heather Egan Sussman

In April 2011, we issued a blog post outlining some of the National Labor Relations Board’s (NLRB) decisions regarding employee use of social media (the post can be accessed here). In an effort to provide guidance on the issue, the Acting General Counsel of the NLRB (General Counsel) recently issued a report (found here) addressing cases from the past year arising in the context of social media use. The report uses 14 cases to illustrate how the General Counsel’s office determines that use of social media qualifies as protected concerted activity, and when the mere contents of an employer’s social media policy can give rise to liability under the National Labor Relations Act (NLRA), even when an employer’s employees are not represented by a union.

While the distinction between protected and unprotected activity on social media sites is not always obvious, several trends emerge from the illustrative cases, providing guidance on when the General Counsel’s office (the prosecution arm of the NLRB) will conclude that activity is protected. For example, in cases where the employee discussed his or her social media posts with other employees, or had discussions with coworkers and subsequently drafted a post based on such discussions, the General Counsel’s office tended to deem this “protected concerted activity” such that an employee could not be disciplined for the conduct. By contrast, when employees did not discuss posts with coworkers, or where an employee’s posts were merely “individual gripes” containing no language suggesting an attempt to engage other employees into group action, the General Counsel’s office generally concluded there was not protected activity, and the resulting disciplinary action did not violate the law. One case involving inappropriate and offensive “tweets” by an employee about his employer did not involve protected concerted activity because the tweets did not relate to the terms and conditions of employment, and again, did not seek to involve other coworkers in issues related to employment. 

As for the content of workplace social media policies, the key takeaway from the report is that employers should avoid using overbroad terms that could be construed to prohibit protected concerted activity. For example, the General Counsel’s office has taken issue with policies barring comments compromising the “privacy or confidentiality” of a coworker or that could “damage the reputation” of the employer, or that could “put your job in jeopardy,” because the terms were not defined in the policies. As a result, the General Counsel’s office concluded that the undefined terms could “reasonably be interpreted as prohibiting protected employee discussion” of the terms and conditions of employment, which would be unlawful.

However, the General Counsel’s office declined to prosecute an employer based on its policy that prohibited employees from “pressuring” coworkers  to connect or communicate via social media, finding that this restriction could not be reasonably read to restrict protected activity.  Similarly, the General Counsel’s office concluded that policies limiting employee contact with the media in an effort to ensure a “consistent, controlled” company message to the media (such as limiting media contact to a designated spokesperson, for example), could be permissible, so long as the policies do not limit an employee’s right to discuss working conditions with the media.

The bottom line from the report seems to be that if employers are considering terminating an employee based on an employee’s post on a social media site, they should consult with counsel to determine whether the employee’s activity could qualify as protected concerted activity.  Similarly, employers are wise to review social media policies in light of this report, to determine whether any policy terms could be reasonably construed as prohibiting protected activity because merely maintaining an overly broad policy can violate the NLRA, even if the employer never actually disciplines an employee based on the policy. 

by Heather Egan Sussman, Sabrina E. Dunlap and Stephen D. Erf

As an update to our previous blog entry, the National Labor Relations Board (NLRB) has released the private employer notice of rights under the National Labor Relations Act (NLRA).  As of November 14, 2011, covered employers must post the 11-by-17-inch notice in a conspicuous place, where other notifications of workplace rights and employer rules and policies are posted.  The NLRB states that employers also should publish the notice on an internal or external website if other personnel policies or workplace notices are posted there.

The NLRB has also posted Frequently Asked Questions on the posting requirement, which covers topics such as when employers are covered by the NLRA, and what to do if a substantial share of the workplace speaks a language other than English.

by Stephen Erf and Heather Egan Sussman

The National Labor Relations Board (NLRB) issued a final rule requiring private sector employers to notify employees of their rights under the National Labor Relations Act.  The Rule requires private sector employers who fall under the National Labor Relations Act to post the employee rights notice in conspicuous places at where other workplace rights notices are usually posted. The new notice states that employees have the right to act together to improve working conditions and wages, to form, join and assist unions, to collective bargaining, or to refrain from any of these activities. The notice also provides examples of illegal conduct and tells employees how to contact the NLRB with questions or complaints.

NLRB regional offices will provide the notice of rights at no charge, or the notice can be downloaded from the Board website and printed in color or black and white.  Translated versions, which will also be available, must be posted at workplaces where at least 20 percent of employees are not proficient in English.  Employers must also post the notice on intranet or an internet sites if other rules and policies are typically posted there.

Failure to post the notice will be treated as an unfair labor practice and, if an unfair labor practice charge is filed by a person or union, will trigger an investigation and adjudication by the National Labor Relations Board that could lead to the investigation of other issues, as well.  Additionally, the failure to post the notice may have the effect of extending the time for the filing of an unfair labor practice charge on unrelated issues (i.e. permit the prosecution of an otherwise time-barred unfair labor practice charge) and permit the NLRB to infer that a knowing and willful refusal to post the notice is evidence of an unlawful motive in cases in which motive is an issue.

The Rule is scheduled to be posted in the Federal Register by August 30, 2011, and will take effect 75 days after that, on November 14, 2011.

by Stephen D. Erf, Heather Egan Sussman and Sabrina E. Dunlap

Recently, the National Labor Relations Board (NLRB) proposed new rules purportedly intended “to reduce unnecessary litigation” and streamline pre- and post-election procedures. The bottom line is that these new rules, if adopted, will make it easier to unionize American workforces.  One way the new rules “streamline” the unionization process is by requiring the exchange of timely information, including employee contact data and required forms. The proposed rules also aim to defer potential litigation until after an election has been held, so that proceedings related to litigation do not slow down the election process, which will limit the opportunity for the employer to present its views regarding the issues. Given these proposed rules, American businesses may likely step-up union avoidance efforts.

The U.S. Department of Labor (DOL) simultaneously has released a new proposed rule that appears designed to discourage such union avoidance efforts. Under this proposed rule, an existing exemption from certain disclosure requirements for “advice” would be significantly narrowed such that employers would be required to disclose arrangements with consultants that draft communications on behalf of an employer designed to “directly or indirectly persuade workers concerning their rights to organize or bargain collectively,” even when the consultants do not contact employees directly. Under the proposed rule, the DOL said employers should disclose information about “union avoidance” seminars and trainings offered to employers by lawyers or labor consultants, because theses seminars “involve reportable persuader activity.” The DOL is warning employers against classifying such seminars as “advice” to avoid disclosure under the exception. 

The combined NLRB and DOL efforts appear to be a governmental one-two punch aimed at American business – they make it easier for unions to organize workplaces on the one hand, and discourage union avoidance efforts on the other. Fortunately, however, we suspect corporate America will not be so easily discouraged, because it could be far more costly for companies to skip the union avoidance training, now that the NLRB has helped grease the skids toward organizing American workplaces. On balance therefore, we expect companies still will elect to move forward with the training, and just be mindful of their disclosure obligations, assuming these proposed rules go into effect.