On-site Work Stoppage Protected Despite Employer's "Open Door" Grievance Policy: NLRB

Practical Law Legal Update 4-570-3205 (Approx. 8 pages)

On-site Work Stoppage Protected Despite Employer's "Open Door" Grievance Policy: NLRB

by Practical Law Labor & Employment

Background

Fortuna Enterprises operates the Los Angeles Airport Hilton Hotel and Towers. In January 2006, a union began an organizing campaign. In May 2006, the employer suspended an employee after accusing him of theft. Employees who supported the union feared the suspension was due to his union activity and that they may also be targeted. Therefore, the employees held a work stoppage in the employee-only cafeteria. The following events then occurred:

When employees arrived at about 8:00 a.m., they asked a security guard to tell the general manager and food and beverage director that they wanted to meet with them.
About half-an-hour later, as instructed by the human resources manager, the housekeeping director entered the cafeteria and told the employees that they must return to work if they were not on break. One employee responded that they would not return to work until they spoke with senior management as had been requested.
A few minutes later, the housekeeping director again ordered the employees to return to work if not on break or clock out and go home.
At about 9:00 a.m., or one hour after the work stoppage began, the housekeeping director again ordered the employees to return to work or clock out and go home, else they would be suspended.
A few minutes later, again as instructed by the human resources manager, the housekeeping director began suspending employees.
Fortuna's security chief then threatened to call the police if the employees did not leave the hotel.
Despite their threats, both the housekeeping director and security chief promised the employees they would try to contact the general manager.
One of the employees tried to call human resources but failed to get through to speak with the director.
The employees waited until about 10:15 a.m. but received no response. They sent a delegation to the kitchen to tell the food and beverage director they wished to return to work, but were intercepted and suspended.
The employees went back to the cafeteria to inform the other employees.
By 10:30 a.m., about 2.5 hours after the work stoppage began, the employees all left the cafeteria.
By notice dated May 18, 2006, Fortuna informed the 77 employees that they were suspended for five days for:
- insubordination;
- failure to follow instructions; and
- refusing to return to work or clock out and go home.

On April 30, 2009, an NLRB administrative law judge (ALJ) found that:

The employee's activity remained protected.
Fortuna therefore violated Section 8(a)(1) of the NLRA by suspending 77 employees for participating in an on-site work stoppage.

The ALJ applied the ten factors set out in Quietflex, for determining the proper balance between employees' Section 7 rights and employer's private property rights in on site work stoppage cases. The ten Quietflex factors are:

Factor one. The reason the employees have stopped working (whether it concerned concerted activity about terms and conditions of employment).
Factor two. Whether the work stoppage was peaceful.
Factor three. Whether the work stoppage interfered with production or deprived the employer of access to its property.
Factor four. Whether the employees had adequate opportunity to present grievances to management.
Factor five. Whether employees were given any warning that they must leave the premises or face discharge.
Factor six. The duration of the work stoppage.
Factor seven. Whether the employees were represented or had an established grievance procedure.
Factor eight. Whether the employees remained on the premises beyond their shift.
Factor nine. Whether the employees attempted to seize the employer's property.
Factor ten. The reason for which the employees were ultimately discharged.

(344 N.L.R.B. 1055 (2005).)

A three-member panel of the Board:

Assumed the validity of the Quietflex multi-factor balancing test.
Agreed with the Board's application of most of the Quietflex factors.
Adopted and affirmed the ALJ's conclusions that:
- the work stoppage was protected; and
- the suspensions were unlawful.

(355 N.L.R.B. 602 (2010).)

Fortuna filed a petition for review of the Board's order in the US Court of Appeals for the DC Circuit and the Board cross-petitioned for enforcement. In December 2011, the DC Circuit:

Affirmed the Board's interpretation of Quietflex factors one, five, six, eight and ten.
Expressed concerns that the Board:
- did not ascribe weight to the factors; and
- factors two, three and nine overlapped.
Found that the Board misapplied Quietflex factors four and seven because Fortuna had an established "open-door" policy for addressing group grievances.
Remanded the case to the Board for it to rebalance the relevant employee and employer interests in light of the DC Circuit's determination that the employees had access to an established grievance procedure.

(Fortuna Enters., L.P. v. NLRB, 665 F.3d 1295 (D.C. Cir. 2011).)

In May 2012, the Board notified the parties that it had accepted the remand and requested statements of position. The General Counsel, Fortuna and the union filed position statements. The Board has delegated its authority in this proceeding to a three-member panel.

Outcome

A three-member panel (Chairman Pearce and Members Schiffer and Johnson) unanimously held:

Considering all the relevant factors, the work stoppage was protected for its entire duration.
The suspensions of the participating employees violated Section 8(a)(1) of the NLRA.

However, Member Johnson dissented from the majority's analysis.

The Board majority:

Accepted, as the law of the case, the DC Circuit's finding that the employees had access to an established procedure for resolving group grievances.
Rebalanced the relevant employer and employee interests in light of the DC Circuit's opinion.
Found that while the availability of an established grievance procedure (the open door policy) weighs against protection, factors four and seven were substantially outweighed by the other factors that favor finding the work stoppage protected.

The Board majority briefly reviewed each of the other factors as follows:

The work stoppage was to protest the discipline of a coworker, therefore the employees were engaged in protected concerted activity (factor one).
The work stoppage was peaceful and lasted less than one hour before the employees were suspended (factors two and six).
Employer did warn employees that they would be suspended if they did not go back to work or clock out and go home, but that warning came only one hour into the work stoppage, only waited a few minutes before it began suspending them (factor five).
None of the employees remained on Fortuna's property beyond their shift, or attempted to seize Fortuna's property (factors eight and nine).
The employees were suspended for insubordination because they did not follow the employer's instructions that they either return to work or clock out and go home (factor ten).

The Board majority therefore found that:

Factors one, two, six, eight and nine strongly support the conclusion that the employees were engaged in protected activity at the time they were suspended.
Factor five (Fortuna's warning to employees) is entitled to little weight because:
- although Fortuna warned the employees they would be suspended if they did not return to work or clock out, that warning came less than an hour into the stoppage; and
- Fortuna started to suspend employees right after issuing the warning, while employees were waiting in the cafeteria for a senior manager to come and hear their grievance.
Factor ten (the reason for the discipline, here insubordination) does not weigh against protection because the Board has held that employees may engage in peaceful work stoppage for a reasonable period of time, if there is not evidence that they are interfering with the work of nonstrikers (Cambro Mfg. Co., 312 N.L.R.B. 634 (1993)).

With regard to Quietflex factor three (the interference with production factor) the Board majority held that this factor weighs heavily in favor of protection because:

There is no suggestion that the striking employees attempted to prevent other employees from working.
The record does not show any evidence that the striking employees interfered with the work performance of nonstrikers.
Fortuna did not suffer any appreciable loss of production or disruption of services beyond the work the strikers themselves did not perform.

With regard to Quietflex factor four (sufficient opportunity to present grievances to management), the Board majority found that, even though the employer had a grievance procedure, this factor weighs slightly in favor of protection because the housekeeping director and other managers repeatedly assured the employees that they were trying to contact senior management on the employees' behalf. Therefore the employees reasonably believed that senior management would meet with them and hear their grievance. This belief influenced the employees' decision to persist in the work stoppage for as long as they did. When the employees finally realized that senior management would not meet with them, they promptly offered to return to work.

Finally, with regard to Quietflex factor seven (the established grievance procedure factor), the Board majority:

Accepted the D.C. Circuit's conclusion that the employees had access to an established "open door" policy for addressing group grievances.
Gave that factor due but not decisive weight.
Noted that in general, employees who strike in support of a workplace complaint need not exhaust a grievance procedure unilaterally adopted by their employer.
Noted that, although the Board has held that the existence of a grievance procedure goes against the justification for protection of on-the-job work stoppages, the NLRA protects employees who engage in peaceful work stoppages without first attempting to resolve their complaint through workplace channels, as that would allow employers to prevent the Section 7 right of employees to engage in peaceful on-site work stoppages by unilaterally adopting a grievance procedure.

Member Johnson dissented from substantial portions of the majority's analysis, finding that the majority improperly rebalanced the Quietflex factors by:

Counting factors one, two and nine as factors to weigh in favor of NLRA protection, when Board precedent used them as conditions precedent for balancing employee and employer interests using the other factors. If the activity were not protected and concerted, was violent, or damaged or converted employer property the on-site work stoppage would instantly lose NLRA protection.
Failed to give adequate weight to the open door policy as an alternative way in which the employees can express grievances. Board and court precedent emphasize the existence or absence of a grievance procedure above other factors. (Core Mills Corp. v. NLRB, 413 F.2d 445 (4th Cir. 1969).)
Conflated factors four and seven, while counting other factors supported by the same facts cumulatively.

Member Johnson noted in part that the employer undermined the weight that could have been applied to factors four and seven under Board and federal court precedent by providing mixed messages to striking employees about whether managers would meet to discuss their protests, likely causing employees to extend their protests and discount warnings about suspensions.

Practical Implications

Employers who are confronted with an on-site work stoppage should be aware that it is for a concerted protected purpose, is peaceful and if employees do not remove or damage employer property or interfere with the productivity of non-strikers, the majority is likely to find that the employees actions are lawful. The majority will likely discount grievance procedures, unofficially straying from precedent that gave greater weight to factors four and seven.

To increase the chance that the Board would find an on-site protest is unprotected, employees with grievance procedures should ensure that employees:

Know the procedures.
Are clearly warned about the consequences of continuing their protests rather than returning to work and using approved grievances procedures to address their concerns with management.

On-site Work Stoppage Protected Despite Employer's "Open Door" Grievance Policy: NLRB | Practical Law