Employer Did Not Violate NLRA by Prohibiting Clothing with Insulting Message: DC Circuit | Practical Law

Employer Did Not Violate NLRA by Prohibiting Clothing with Insulting Message: DC Circuit | Practical Law

In Medco Health Solutions of Las Vegas, Inc. v. NLRB, the US Court of Appeals for the District of Columbia Circuit held that an employer did not violate the National Labor Relations Act (NLRA) by prohibiting an employee from wearing a shirt with a written message that mocked an employer-sponsored employee recognition program.

Employer Did Not Violate NLRA by Prohibiting Clothing with Insulting Message: DC Circuit

by PLC Labor & Employment
Published on 17 Dec 2012 • USA (National/Federal)
In Medco Health Solutions of Las Vegas, Inc. v. NLRB, the US Court of Appeals for the District of Columbia Circuit held that an employer did not violate the National Labor Relations Act (NLRA) by prohibiting an employee from wearing a shirt with a written message that mocked an employer-sponsored employee recognition program.

Key Litigated Issues

On December 14, 2012, the US Court of Appeals for the District of Columbia Circuit issued an opinion in a case involving an employer's right under the NLRA to determine employees' work apparel. In Medco Health Solutions of Las Vegas, Inc. v. NLRB, the key litigated issues were whether the employer, Medco Health Solutions of Las Vegas, Inc., violated the NLRA by:
  • Ordering an employee to remove and never wear a T-shirt that disparaged Medco's employee recognition program.
  • Refusing to bargain with a union representing some of its employees regarding a change in Medco's dress code policy.

Background

Medco's employee recognition program is known as the "WOW program." This program was instituted in the summer of 2009. Employees who win a "WOW Award" at weekly events do not receive additional monetary compensation and are not entitled to receive promotions (although their underlying conduct could lead to one). Recent winners of the WOW Award are listed on the "Wall of WOW" in the employee cafeteria.
Medco instituted this program to boost employee morale, and show customers and potential customers, who are given tours of the Medco premises, Medco's commitment to service. Close to 100 tours are given each year, and the WOW program is discussed in the slide show viewed by tour participants.
Medco changed its dress code policy for employees of the pharmacists unit, requiring pharmacists to wear lab coats during working hours and dress in business casual on scheduled tour days. When the pharmacists' union discussed the change with Medco, Medco refused to alter its position, arguing that the dress code was not a mandatory subject of bargaining. The change took effect shortly thereafter.
Early in 2012, one of Medco's employees in its pharmacy unit wore a T-shirt to work with the union logo on the front and the message, "I don't need a WOW to do my job," on the back. He wore it the same day that Land O'Lakes Company, a Medco customer, was touring the Medco facility. Later that day, the employee's supervisor called the employee to a private meeting, and demanded that he remove the T-shirt because it was "insulting" to Medco. The supervisor also told the employee that if he disagreed, "there were plenty of jobs out there." The employee complied with the request and never wore the shirt again.
The employee's union filed an unfair labor practice (ULP) charge, alleging that:
  • Medco's action regarding the pharmacist violated his rights under Section 8(a)(1) of the NLRA.
  • Medco unlawfully failed to bargain about the dress code.
In support of its actions, Medco invoked the dress code then in effect, which it claimed lawfully banned "Phrases, Words, Statements, pictures, cartoons or drawings that are degrading, confrontational, slanderous, insulting or provocative." An NLRB administrative law judge (ALJ) held that:
  • By wearing the T-shirt, the employee engaged in a union-supported protest of a working condition protected by Section 7 of the NLRA, and that Medco unlawfully invited the employee to quit employment because of a lawful protest of working conditions.
  • Medco's application of its ban on insulting language to the T-shirt was an unlawful restriction of employees' Section 7 rights under Section 8(a)(1) of the NLRA.
  • Medco's ban on "provocative" and "confrontational" dress was overly broad, because employees could reasonably understand the code to restrain protected activity, in violation of Section 8(a)(1) of the NLRA.
The panel heading the NLRB's judicial functions (Board) affirmed the ALJ's decision (Medco Health Solutions of Las Vegas, Inc.).
Although the Board did not reach the merits of the ALJ 's finding that the employees would reasonably read the dress code to restrict Section 7 activity, the Board ordered Medco, among other things, to cease enforcing and to rescind the ban on "provocative, insulting, or confrontational" statements. The Board also found that Medco unlawfully failed to bargain with the union before implementing its changes to the dress code.
Medco petitioned the DC Circuit to review the Board's order in both matters, and the NLRB cross-petitioned the court for enforcement of the order.

Outcome

On December 14, 2012, the DC Circuit issued an opinion in Medco. The court set aside the Board's determination that Medco committed a ULP by ordering the employee to remove his shirt and by banning insulting, provocative and confrontational expressions on clothing. However, the court denied Medco's petition to review the Board's determination that Medco committed a ULP by refusing to bargain on its amendment of the pharmacists' dress code. The court granted the Board's cross application for enforcement on this issue.

Clothing Ban

The court found that the employee who wore the controversial T-shirt did engage in concerted activity, even though he did not discuss the T-shirt with his co-workers, because other Medco employees had worn the same T-shirt in at least one other Medco location (see Citizens Investment Services Corp. v. NLRB).
However, the court accepted Medco's argument that wearing the T-shirt potentially affected Medco's relationship with its current and potential customers, and in such "special circumstances," the company's response was justified. The court found that:
  • The WOW program is an important part of Medco's presentation to customers and prospects.
  • Medco assigns a full-time employee to manage the program.
In light of the importance that Medco gives to the program, the Board was incorrect to conclude that Medco had presented no evidence that the T-shirt could possibly harm Medco's relationship with customers.
The court found that in prior Board cases where employees displayed pro-union or controversial messages, the Board did not require evidence other than the message itself:
  • In Pathmark Stores, Inc., the Board held that a grocery store could prohibit its employees from displaying the message, "Don't Cheat About the Meat!", in protest of the store's use of prepackaged meat products, because of its "legitimate interest in protecting its customer relationship."
  • In Noah's New York Bagels, Inc., the Board upheld a ban on T-shirts that stated, "If its [sic] not Union, its [sic] not Kosher."
The court noted that in neither case did the "Board require the employer to offer additional evidence beyond a relationship between its business and the banned message" (Pathmark).
Relying on Pathmark and Noah’s New York Bagels, the court:
  • Found that:
    • an employee's speech can harm his employer's customer relations by "belittling or critiquing other aspects of the employer's operations;"
    • employee attitudes can be an especially important part of customer relations for businesses that sell services; and
    • while employers cannot suppress all employee speech expressing viewpoints and grievances, they can prohibit slogans that customers and other outsiders could interpret as signs of resentment.
  • Held that:
    • the Board did not adequately explain why Medco's claim of harm to customer relations required additional evidence of harm, while similar claims by employers in Noah's New York Bagels did not; and
    • that the Board could not adequately distinguish Pathmark and Noah's New York Bagels by interpreting the NLRA as prohibiting only disparagements of an employer’s merchandise.
The court also vacated the Board's order that Medco "[r]escind the overly broad work rules that prohibit employees from wearing clothing with messages that are provocative, insulting, or confrontational." Although the Board did not offer an explanation for this ruling, it implicitly held that Medco's ban was overly broad. The court chided the Board for abandoning the framework it established in Lutheran Heritage Village-Livonia (which was adopted after the court's decision in Adtranz ABB Daimler-Benz Transp., N.A. v. NLRB). In Lutheran Village, the Board held that an employer's rule that neither expressly nor inherently restricts protected activity violates the NLRA only if:
  • The rule was promulgated in response to union activity.
  • A reasonable employee would construe the rule to prohibit protected conduct.
Neither factor from Lutheran Village was met here. The court remanded the case to the NLRB for further proceedings.

Changes to the Dress Code

The court upheld the Board's determination that Medco committed a ULP by unilaterally changing the pharmacists' dress code and refusing to bargain over that change.
Medco did not argue before the court that the dress code was not a mandatory subject of bargaining under the NLRA, but that the union agreed that a management rights clause from an expired contract with a predecessor union would remain in effect while the current union negotiated a new collective bargaining agreement with Medco. Medco argued that the management rights clause entitled the company to unilaterally change the dress code for the bargaining unit if the union failed to challenge that change within a certain limited time period after it was announced. The ALJ refused to accept Medco's testimony supporting the alleged agreement regarding the management rights clause. The Board accepted the ALJ's holding, and Medco did not present evidence to the court that would allow it to overturn the Board's credibility finding.
Finally, Medco argued in the alternative that the totality of its conduct showed that it made a good-faith effort to bargain with the union, despite its statements that it would not bargain. The court rejected this argument as well.

Practical Implications

Employers that want to control the apparel worn by their unionized employees may do so if the clothing displays a confrontational or insulting message, especially if the employer can show special circumstances for limiting clothing-related speech, such as when the clothing's message could harm customer relations. However, before prohibiting clothing with messages, employers should:
  • Verify whether special circumstances, including potential harm to an employer's relationship with its current and future customers, warrant a ban.
  • Be mindful of the factors established in Lutheran Village.
  • Bargain with any unions representing their employees before unilaterally altering the dress code of unionized employees, because that is a mandatory subject of bargaining (Yellow Enter. Sys.).

Court Documents