NLRB Changes Backpay Formula for Terminated Employees: Harmful to Employers

The NLRB voted 3-1 to revise its backpay formula for compensating workers found to have been unlawfully terminated, ordering an employer to pay for a former employee’s interim-employment and search-for-work expenses.

The Board had previously treated those types of expenses as offsets that reduced the amount of interim earnings that were then subtracted from gross back pay. This ruling, though, establishes that employees will now be compensated for such expenses, even when interim earnings are nonexistent or less than those expenses.

“The Board has been awarding search-for-work and interim employment expenses for 80 years,” the majority wrote. “The changes we make today only affect how the board calculates search-for-work and interim employment expenses, not whether these expenses are a permissible remedy.”

But in his dissent, Member Miscimarra wrote, “I do not discount the fact that parties and claimants experience substantial, often oppressive non-monetary consequences as the result of unfair labor practices. “Nonetheless, the NLRA only permits the board to award relief that is remedial.”

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.

Impact of Subway’s “Voluntary Agreement” with the US DOL on Joint Employment

Doctor’s Associates, Inc., which is the owner and franchisor for the Subway sandwich restaurant chain entered into a Voluntary Agreement with the US Department of Labor (DOL) Wage and Hour Division “as part of Subway’s broader efforts to make its franchised restaurants and overall business operations socially responsible” and as part of Subway’s “effort to promote and achieve compliance with labor standards to protect and enhance the welfare” of Subway’s own workforce and that of its franchisees.

While the Agreement appears intended to help reduce the number of wage and hour law claims arising at both Subway’s company owned stores and those operated by its franchisees across the country, the Agreement appears to add further support to efforts by unions, plaintiffs’ lawyers, and other federal and state agencies such as the NLRB, OSHA, and the EEOC to treat franchisors as joint employers with their franchisees.

The Agreement, which among other things commits Subway to working with both the DOL and Subway’s franchisees to develop and disseminate wage and hour compliance assistance materials and to work directly with the DOL to “explore ways to use technology to support franchisee compliance, such as building alerts into a payroll and scheduling platform that Subway offers as a service to its franchisees.”

Employers advised to review the full range of their operations and personnel decisions, including their use of contingent personnel supplied by temporary and other staffing agencies to assess their vulnerability to such action and to determine what steps they may take to better position themselves for the challenges that are likely coming.

Employers should also carefully evaluate their relationships with suppliers, licensees, and others they do business with to ensure that their relationships, and the agreements, both written and verbal, governing those relationships do not create additional and avoidable risks.

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.

OK to Ask Employee to Delete Tweets per NLRB

The NLRB found a fast food restaurant in Pennsylvania did not violate federal labor law when it asked a worker to delete certain Twitter postings, including one with “cheap #labor.” The Board’s ruling comes after an Administrative Law Judge found among other things, that the company violated the employee’s right to discuss wages and working conditions when it requested he delete a handful of postings from his Twitter account.

The employee wrote “nothing is free, only cheap #labor. Crew members only make $8.50hr how much is that steak bowl really?” Another tweet, referencing that the company charged for guacamole, said “it’s extra not like #Qdoba, enjoy the extra $2.”

Per the NLRB, these tweets did not constitute concerted activity because they did not address a term or condition of employment and were not made on behalf of a group of employees. Rather, they were a single worker’s gripe. Savvy workers have, in the past, made similar gripes but gratuitously referenced concerted activity or union organizing at the end which made them activity protected by the National Labor Relations Act.

The NLRB also upheld the ALJ’s finding that an outdated social media policy that prohibited employees from posting “incomplete, confidential, or inaccurate information” and making “disparaging, false, or misleading statements” violated the NLRA.

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.

Responding to Questions About the Future of Joint Employment and the NLRB

Many businesses have recently asked me how they can defend against the NLRB’s Browning Ferris and Miller & Anderson rulings, should they be aware of other cases that may extend these holdings into previously unregulated relationships, and generally, what should companies do to comply with the new laws. Here are some answers:

Before Browning Ferris, companies were joint employers only if each one exercised direct and immediate control over the employees. Now, the NLRB may find a company to be a joint employer even if it does not exercise control in a direct and immediate way. The NLRB may also find a company to be a joint employer if in practice it does not exercise any authority at all, as long as it possesses the authority to control employees.

These are still live issues. The D.C. Circuit is currently considering an appeal of the NLRB’s Browning Ferris decision. Miller & Anderson will also likely by appealed to the federal courts.

Future NLRB cases will likely apply the joint employer doctrine to other forms of business relationships. Joint employment can come in many forms, including temporary agencies and other staffing and subcontracting arrangements, and, as the NLRB argues in the McDonald’s case, franchising. The NLRB is looking at a wide range of business relationships and using the joint employer doctrine as a way to apply the NLRA to any sort of arrangement where more than one entity has control over employees.

As it stated in Miller & Anderson, “to the extent that multiple employers will be required, as a practical mater, to cooperate or coordinate in bargaining, that is a function of the freely chosen business relationship between user and supplier employers that defines all joint employer situations.”

Many employers are not waiting to re-examine their business relationships. In response to McDonald’s arguments to the NLRB that it should not be considered a joint employer with its franchises, many companies are working to distance themselves from their partners who they fear could be considered joint employers.

There is no consensus on a single strategy employers should use in light of the changes to the joint employer doctrine. What many employers do have in common is that they are proactively re-examining business relationships in which more than one entity has the authority to exercise some control over employees, regardless of whether the entities involved are currently unionized or not. Some employers are determining that they must make changes now, despite the uncertainty in the joint employment doctrine. Others re not making immediate changes, but are actively strategizing for the future – whatever it may hold.

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.

NLRB Says a Corporate Seller’s Conduct Can Prevent a Buyer from Setting Initial Terms of Employment

The law surrounding a purchaser’s obligations to the seller’s union is complex. When structured accordingly, purchasers can set initial terms of employment while bargaining a new collective bargaining agreement. Until now, only the purchaser could bind itself to additional obligations to the seller’s union. Now, though, the seller can obligate the purchaser to inherit the seller’s union and seller’s collective bargaining agreement unbeknownst to the purchaser.

The National Labor Relations Board relied on the parties’ Purchase and Sale Agreement stating that the employees would be offered “(i) a base salary or wages no less favorable than those provided immediately prior to the Closing Date and (ii) other employee benefits, variable pay, incentive or bonus opportunities…substantially comparable in the aggregate” to those provided by the seller. The Board also focused on the seller’s communications, rather than the buyer’s, with the employees. For example:

  • On November 7, an email from seller’s president was delivered via hard copy to the employees stating, “We anticipate approximately 2,000 [Seller Company’s] employees will transfer to the new business.”
  • On November 8 an employee Q&A was posted on the intranet and the bulletin board stating, “Under the terms of the agreement, for at least 18 months following closing, the newly independent company is required to provide to each transferred employee, base salary and wages that are no less favorable than those provided prior to closing; and other employee benefits that are substantially comparable in the aggregate to compensation and benefits [currently enjoyed].

The Board’s reliance on these communications completely disregarded the buyer’s later statements, which made it clear that any continued employment would be under new and different terms and conditions. The purchaser’s statements included the following:

  • On February 16, the purchaser met with the union business agent and provided a draft copy of an offer letter to be distributed to the employees. The letter stated, “We think you should know that [Purchaser] has not agreed to assume any of [Seller’s] collective bargaining agreements. We have chosen not to adopt, as initial terms and conditions of employment, any of the provisions contained in any current or expired collective bargaining agreement…”
  • On February 17, the purchaser mailed the offer letters to the employees along with a document called “You New Benefits at a Glance,” which detailed the changes to the employee’s health insurance, life insurance, and retirement benefits should they accept the offer.

In relying so heavily on the seller’s statements, the NLRB blurred the identity of the speaker and the time at which the buyer’s responsibility for communication kicks in. It held that the seller’s statements to the employees may be imputed to the purchaser for purposes of the “perfectly clear successor” analysis, a stark departure from the Board’s previous requirement. Now, the purchaser’s obligation to notify the union of a change in terms and conditions may be triggered simultaneously with the seller’s effects bargaining obligation.

In the meantime, potential successors contemplating purchases from unionized sellers should:

  1. Carefully review purchase agreements for any language that could trigger a perfectly clear successor obligation under the Board’s new standard including obligations to provide similar or comparable wages and benefits to the seller’s employees.
  2. Negotiate strict limitations on the seller’s ability to communicate the terms of the deal to its employees or the ramifications of the deal on their continued employment.
  3. Recognize that although the seller has an effects bargaining obligation, the purchaser may want to consider insisting that any communications by the seller to the employees be coupled with affirmations that any continued employment with the buyer will be under different terms and conditions of employment.
  4. Potentially require that a decision on the initial terms and conditions of employment be made prior to execution of a purchase agreement including the terms of any communications regarding those initial terms.

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.

NLRB Says Loud, Profane, Obnoxious, Stalking Employee Discipline was Unlawful

Cheryl Walton, an employee of the United States Postal Service was, for lack of a better term, a troublemaker. She was loud, aggressive, confrontational, and had a reputation for regularly using profanity. During a meeting with her supervisor she became agitated and cut the meeting short. Upset, Walton shook her finger and yelled, “I can say anything I want. I can swear if I want. I can do anything I want.”

Afterwards, Walton started showing up at her supervisor’s office, calling her from the lobby and demanding to see her. Walton even began “closely watching” her supervisor as she arrived for her shift. Walton ultimately received a warning letter for her behavior.

The Board rejected the administrative law judge’s conclusion that Walton had lost protection under the NLRA with a “disturbing pattern of conduct.” The NLRB majority said Walton didn’t lose protection under the National Labor Relations Act despite acting in a way that was “loud, profane, disrespectful, and obnoxious.” “In these circumstances,” the board wrote, “we find that the nature of Walton’s outburst weighs, albeit not by much, in favor of finding that she retained protection of the NLRA.”

In his dissent, Member Miscimrra said the NLRA doesn’t “give an employee carte blanche to invoke the act’s protection, on the one hand, while physically threatening another person, literally, with the other.” “Nor should the board give its own cloak of approval to such conduct, which goes way beyond what anyone would reasonably deem acceptable in a civilized work setting,” he wrote.”

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.