Our colleague Steven M. Swirsky, a Member of the Firm at Epstein Becker Green, has a post on the Management Memo blog that will be of interest to many of our readers in the retail industry: “Federal Appeals Court Sides with NLRB – Holds Arbitration Agreement and Class Action Waiver Violates Employee Rights and Unenforceable.

Following is an excerpt:

The US Court of Appeals for the Seventh Circuit in Chicago has now sided with the National Labor Relations Board (NLRB or Board) in its decision in Lewis v. Epic Systems Corporation, and found that an employer’s arbitration agreement that it required all of its workers to sign, requiring them to bring any wage and hour claims that they have against the company in individual arbitrations “violates the National Labor Relations Act (NLRA) and is unenforceable under the Federal Arbitration Act FAA).” …

The decision of the Seventh Circuit, finding that the Board’s view was not inconsistent with the FAA, sets the ground for continued uncertainty as employers wrestle with the issue.  Clearly, the question is one that is likely to remain open until such time as the Supreme Court agrees to consider the divergent views, or the Board, assuming a new majority appointed by a different President, reevaluates its own position.

Read the full post here.

Imagine that an employee asks to come to your office to address concerns about workplace harassment. Pursuant to the company’s open door and non-harassment policies, you promptly schedule a meeting. When the employee arrives, she sits down, sets her smartphone on the desk facing you, and turns on the video camera before beginning to speak. Can you instruct her to turn off the recording device? Can you stop the meeting if she refuses? Would the answer change if the recording was surreptitious?

The answer to questions like these have become more blurry since the decision last year by the National Labor Relations Board (“Board”) in Whole Foods Market, Inc.[1] Conventional wisdom before Whole Foods supported the view that, as a general rule, employers were on safe ground prohibiting audio or video recording in the workplace. In Whole Foods, however, the Board held that an employer may not lawfully adopt a work rule prohibiting employees from workplace recording, if the employees are acting in concert for mutual aid and protection and the employer cannot demonstrate an overriding business interest.

According to the Board, it is unlawful for an employer to prohibit employees from recording images of protected picketing and documenting unsafe equipment or workplace conditions. Similarly, an employer may not prohibit an employee from recording discussions with others about terms and conditions of employment or documenting inconsistent application of employer rules. Perhaps most troubling, even if the conversation or event that the employee wishes to record is not legally protected, the Board has ruled that an employee may record evidence to preserve for later use in administrative or judicial forums in employment-related actions. Get the picture?

Presently, the Whole Foods decision is on appeal before the U.S. Court of Appeals for the Second Circuit. Until then, employers have a few options to address recording devices in the workplace:

  • End the meeting. Employers that do not want conversations with their employees recorded could simply decline to participate in any conversation in which an employee is knowingly recording. This option, however, has several risks, particularly in a harassment scenario where the employer’s liability hinges on whether it took prompt remedial measures that were reasonably calculated to stop the allegedly unlawful conduct.
  • Narrowly tailor the rule. An employer can ensure that its ban on workplace recording is not so overly broad that employees would reasonably construe it to prohibit protected concerted activity. For example, the recording prohibition could be limited to legitimate business interests, such as recording trade secrets, proprietary processes, confidential technology, medical privacy, and information about vendors, customers, and suppliers.
  • Carve out “two-party consent” states. Some states, such as California, Florida, Massachusetts, Pennsylvania, and Washington, require the consent of both parties to a conversation before recording. Those states potentially could be carved out with a revised narrow rule prohibiting workplace recording.
  • Say “cheese” (but not much more). Perhaps the least risky option might be to rescind all rules prohibiting recording in the workplace, assume that everything is being recorded at all times, and act accordingly. If a workplace recording situation arises, an employer could address it on a case-by-case basis and determine whether the conduct violated another existing policy (e.g., anti-harassment) and whether the recording was otherwise protected by law. Another approach that an employer should consider is, in meetings, giving employees an opportunity to say what they wish to say while recording but keeping its own remarks to a minimum. An employer should take the comments under advisement and then respond in writing.

A version of this article originally appeared in the Take 5 newsletter Five New Challenges Facing Retail Employers.”

[1] See Clare O’Connor, Does Jimmy John’s Non-Compete Clause For Sandwich Makers Have Legal Legs? Forbes (Oct. 15, 2014), http://www.forbes.com/sites/clareoconnor/2014/10/15/does-jimmy-johns-non-compete-clause-for-sandwich-makers-have-legal-legs/; see also Steven Greenhouse, Noncompete Clauses Increasingly Pop Up in Array of Jobs, New York Times (June 8, 2014) http://www.nytimes.com/2014/06/09/business/noncompete-clauses-increasingly-pop-up-in-array-of-jobs.html?_r=0.

Maxine NeuhauserIn a decision with ramifications for employers in health, retail, hospitality and other industries serving the public, on October 22, 2015 in a decision, Marina Del Rey Hospital, 363 N.L.R.B. No. 22, 2015 BL 347693, the NLRB confirmed the legality of policies barring employees from the premises when not on duty, which contain an exception permitting off-duty employees to be on the premises as members of the public, e.g., as a patient or a visitor.  The Board found, however, that enforcement of the facially neutral policy to certain employment restrict protected activity constitutes an unfair labor practice. The decision addressed the policy stated in the Marina Del Rey Hospital’s employee handbook stating:

Off-duty employees may access the Hospital only as expressly authorized by this policy. An off-duty employee is any employee who has completed or not yet commenced his/her shift.

An off-duty employee is not allowed to enter or re-enter the interior of the Hospital or any Hospital work area, except to visit a patient, receive medical treatment, or conduct hospital-related business. “Hospital related-business” is defined as the pursuit of an employee’s normal duties or duties as specifically directed by management.

An off-duty employee may have access to non-working, exterior areas of the Hospital, including exterior building entry and exit areas and parking lots.

Any employee who violates this Policy will be subject to disciplinary action up to and including termination.

The record before the Board established that the hospital permitted off-duty employees on premise for non-union, employment-related activities such as picking up paystubs, submit­ting scheduling requests, applying for a transfer, and at­tending social events, e.g. retirement parties and wed­ding and baby showers. On at least two occasions, however, the hospital applied the off-duty access policy to prevent or curtail off-duty employees from meeting with union representatives in the hospital cafeteria. The Board found that this disparate enforcement of the otherwise facially lawful constituted an unfair labor practice in violation of employees’ Section 7 rights.

While at first blush the decision appears to favor a policy permitting carve outs, as a practical matter, the problematic examples of employee off-duty conduct, e.g., picking up pay stubs, applying for and the like, that the Board found problematic point to the difficulty employers are likely to have in maintaining a no access rule with carve-outs.

My colleague Steven M. Swirsky at Epstein Becker Green published a Management Memo blog post concerning U.S. District Judge Amy Berman Jackson granting summary judgment in favor of the NLRB – “Washington Court Dismisses Challenge to NLRB’s Ambush Election Rules.”

Following is an excerpt:

U.S. District Court Judge Amy Berman Jackson on Wednesday issued a 72 page opinion (PDF) rejecting each of the arguments raised by the U.S. Chamber of Commerce, the National Retail Federation and other business groups and found that the Amended Election Rules adopted by the National Labor Relations Board in December 2014, which took effect in April 2015, in an action that argued that the Board had exceeded its authority, violated the Administrative Procedures Act and that the Amended Rules were unconstitutional.

Read the full original post here.

On January 5, 2015, less than one month after the National Labor Relations Board (NLRB) voted to adopt a Final Rule to amend its rules and procedures for representation elections, a lawsuit has been filed in the US District Court for the District of Columbia, asserting that the Board exceeded its authority under the National Labor Relations Act (Act) when it amended its rules for votes on union representation and that the new rule in unconstitutional and violates the First and Fifth Amendments of the US Constitution.

The suit was filed by the Chamber of Commerce of the United States, Coalition for a Democratic Workplace, National Association of Manufacturers, the National Retail Federation and the Society for Human Resources Management.  It seeks an order vacating the Final Rule, declaring the Final Rule to be contrary to the Act and in excess of the Board’s statutory jurisdiction and authority and to violate the First and Fifth Amendments.

The claims raised in the suit are essentially the same as those which were raised by in an action filed in the same court in 2012, in response to the NLRB’s December 2011 adoption of a very similar set of changes to its representation election procedures.  That action also challenged the Board’s action based on what it found to be the Board’s lack of a quorum at the time it adopted those rule changes in 2011. Because the Court found that the Board lacked a quorum at that time, it found it unnecessary to address the substantive arguments about the changes in the election rules that are the essence of the new lawsuit.

While the Complaint does not indicate that the plaintiffs are seeking an order enjoining the Board from implementing the new election procedures under the Final Rule while the case is litigated, the plaintiffs are likely to request such an order as the Final Rule’s effective date of April 15th nears.  In the earlier challenge to the Board’s 2011 rulemaking, the Court granted an injunction in April 2012 enjoining the Board from putting the new rules and procedures into effect, while it considered the merits of the challenge.

While Republican members of Congress have with increasing frequency indicated their desire to reign in the Board in a variety of areas where they have seen it as exceeding its mandate or moving in directions that they do not agree with, it is almost certain that President Obama would veto such legislation and it is not likely that the sufficient support would be present to override a veto. Thus as the New York Times observed  earlier this week, those who oppose administrative actions such as this are turning increasingly to the courts in hopes of relief.

We will continue to monitor and report on developments in this closely watched case.

Our colleagues Adam Abrahms, Steven Swirsky, and Martin Stanberry at Epstein Becker Green have a Management Memo blog post that will be of interest to many of our readers: “NLRB Issues 13 Complaints Alleging McDonald’s and Franchisees Are Joint-Employers.”

Following is an excerpt:

While the General Counsel’s actions are alarming, particularly for businesses that rely upon a franchise model, the issuance of these complaints comes as little surprise because, as we reported in July of this year, the General Counsel had previously announced the decision to take this action and pursue claims of joint-employer liability. What is somewhat surprising about the announcement is its timing because the Board has not yet issued its decision in Browning-Ferris, 32-RC-109684, where the Board invited interested parties to opine in amici briefs on the benefits and drawbacks of the current standard relied upon by the Board to determine if two employers are a joint-employer and to propose a new standard and factors the Board should consider in such cases. Similar to its recent repudiation of Register Guard, the Board may use Browning-Ferris to moot the thirty years of joint-employer case law that followed TLI, Inc. 271 NLRB 798 (1984).

On the Wage & Hour Defense Blog, coauthor Steven Swirsky comments:

The National Labor Relations Board continues to focus on the changes in the nature of the employer-employee relationship, and the question of what entity or entities are responsible to a company’s employees for compliance with the range of federal, state, and local employment laws, including wage payment and overtime laws.

The Board’s General Counsel has now taken another big step in his effort to broaden the definition of “employer,” issuing a series of 13 complaints alleging that McDonald’s shares responsibility for franchisees’ employees. At the same time, the Board is poised to answer the question of whether the long standing test that the NLRB has relied on for more than 30 years to determine joint employer status should be replaced with a broader definition, and if so what it should be.

Read the full original post here.

Our colleague Steven Swirsky at Epstein Becker Green wrote an advisory on an NLRB ruling that affects all employers: “NLRB Holds That Employees Have the Right to Use Company Email Systems for Union Organizing – Union and Non-Union Employers Are All Affected.” Following is an excerpt:

In its Purple Communications, Inc., decision, the National Labor Relations Board (“NLRB” or “Board”) has ruled that “employee use of email for statutorily protected communications on nonworking time must presumptively be permitted” by employers that provide employees with access to email at work.  While the majority in Purple Communications characterized the decision as “carefully limited,” in reality, it appears to be a major game changer.  This decision applies to all employers, not only those that have union-represented employees or that are in the midst of union organizing campaigns.

Under this decision, which applies to both unionized and non-union workplaces alike, if an employer allows employees to use its email system at work, use of the email system “for statutorily protected communications on nonworking time must presumptively be permitted . . . .” In other words, if an employee has access to email at work and is ever allowed to use it to send or receive nonwork emails, the employee is permitted to use his or her work email to communicate with coworkers about union-related issues.

Read the full advisory here.

On Epstein Becker Green’s Management Memo blog, our colleague Jill Barbarino reviews the National Labor Relations Board’s ruling in Murphy Oil that revisited and reaffirmed its position that employers violate the National Labor Relations Act by requiring employees covered by the Act (virtually all non-supervisory and non-managerial employees of most private sector employees, whether unionized or not) to waive, as a condition of their employment, participation in class or collective actions despite rejection by federal courts.

Click here to read the Management memo blog post in its entirety.


On Epstein Becker Green’s Management Memo blog, I review New Jersey U.S. District Court’s ruling in Naik v. 7-Eleven that four franchise owner-operators may pursue overtime and minimum wage claims against franchisor 7-Eleven under both the federal Fair Labor Standards Act (“FLSA”) and the New Jersey Wage and Hour Law (“NJWHL”).

Following is an excerpt from the blog post:

On July 29, 2014 the NLRB’s General Counsel announced a decision to treat McDonald’s, USA, LLC as a joint employer, along with its franchisees, of workers  43 McDonald’s franchised restaurants with regard to unfair labor practices charges filed by unions on behalf of the  workers and authorized charges against of both the franchisees and McDonalds. (See our July 30 blog post  and Aug. 14 blog post)

To access the full blog post, please click here.

The issue of joint-employer status has become a prominent issue of concern for retailers, many of which are comprised of franchises or include independent boutiques and counters in their stores. As the NLRB moves towards a broader definition of joint employer status, the  NLRB’s General Counsel’s position in a series of cases involving McDonald’s and numerous franchisees across the country appears to foreshadow the NLRB’s new, more aggressive position on what factors establish the joint employer relationship.

On Epstein Becker Green’s Management Memo blog, Steven M. Swirsky discusses this issue and the following is an excerpt from the blog post:

NLRB General Counsel Richard Griffin announced on Tuesday July 29th that he has authorized issuance of Unfair Labor Practice Complaints based on 43 of 181 charges pending against McDonald’s, USA, LLC and various of its franchisees, in which the Board will allege that the company and its franchisees are joint-employers. If the General Counsel prevails on his theory that McDonalds is a joint employer with its franchisees, the result would be not only a finding of shared responsibility for unfair labor practices, but could also mean that the franchisor would share in the responsibilities of collective bargaining if unions are successful in organizing franchisors’ workers.

To access the full blog post, please click here.