Restatement of Property Destruction Rule a ULP; Johnnie's Poultry Assurances Did Not Immunize Coercive Interview: NLRB

Practical Law Legal Update 6-521-7459 (Approx. 7 pages)

Restatement of Property Destruction Rule a ULP; Johnnie's Poultry Assurances Did Not Immunize Coercive Interview: NLRB

by PLC Labor & Employment

Key Litigated Issues

In General Die Casters, Inc., key litigated issues included whether an employer committed unfair labor practices (ULP) when it:

Circulated a memorandum stating that an employee handbook rule that prohibited destruction of company property encompassed defacement of company property such as the placement of stickers.
Unilaterally withheld discretionary merit wage increases for unit employees.
Interrogated an employee, under implied threat of retaliation, regarding the employee's testimony in an NLRB unfair labor practice investigation.

Background

In late 2007, several of General Die Casters' employees met with a union representative to discuss organizing the two locations. The NLRB held an election in March 2008 in which a majority voted in favor of the union. The NLRB overruled the company's objections and the union was certified as the bargaining representative for full-time and production and maintenance employees.

After the certification, the employer engaged in several actions later alleged to constitute ULPs, including:

Before the certification, the company maintained an employee handbook that included a provision prohibiting the destruction of company property. The provision did not specify that posting personal items on company property was prohibited, and employees previously posted stickers featuring phrases from the Bible, jokes and sports emblems on company property without incident. In April 2009, without bargaining with the union, the company circulated a memorandum explaining that destruction of company property included the placement of any personal items, including stickers, on company property. In September 2009, the company terminated employee Kevin Maze for placing union stickers on a coffee machine and on other equipment.
In 2009, the company also decided, again without bargaining with the union, to withhold unit employees' merit wage increases for the year. Prior notice was not given to the union, according to company management, consistent with a past practice of freezing or delaying increases at time of adverse economic conditions.
In April and May 2010, the company sent "Notification Updates" to unit employees expressing the company's opinion that the union should be decertified and urging employees to sign a "decertification petition." At the same time, company supervisors threatened employees with plant closure and job loss if the union continued to represent them.
In 2009, the plant manager told employee Emil Stewart that the company needed a union representative to attend a November OSHA meeting during working hours. Stewart agreed to attend, but the time spent attending the meeting was later deducted from his pay.
During a meeting held in September 2011 regarding ongoing ULP investigations, the company's attorney interrogated employee Jerome Ivery after a statement from Ivery's supervisor that he did not know what his other superiors might do to Ivery if he did not agree to meet with the attorney. The attorney solicited questions about Ivery's subjective state of mind regarding statements he made in NLRB affidavits after he told his superiors that some of those statements were not accurate. However, at the meeting, the attorney provided Ivery with a list of assurances required by the NLRB's decision in Johnnie's Poultry Co.

The NLRB Acting General Counsel issued a complaint against General Die Casters, alleging that the company's series of actions constituted ULPs, plus an allegation that the company failed to provide information regarding laid-off employees. An NLRB administrative law judge (ALJ) held that each of the actions constituted a violation of the NLRA. General Die Casters filed exceptions with the four-member panel (Board) heading the NLRB's judicial functions, appealing these and other ULP determinations.

Outcome

On September 28, 2012, a three-member panel of the Board issued an opinion in the case, affirming five of the ALJ's findings of unlawful conduct while reversing the conclusion that the company failed to provide required information.

Rule Changes to the Employee Handbook

The Board first found that the company committed ULPs when it:

Circulated the memorandum regarding the destruction of company property.
Discharged Maze for violating the policy specified in the memorandum.

The Board affirmed the ALJ's finding that, based on the Board's decision in Toledo Blade Co., an employer has an obligation to provide both notice and an opportunity to bargain with a union regarding work rules, particularly those rules involving discipline. The defacement rule set forth in the memorandum was a clear change from the previous definition for destruction of company property. By failing to provide the required notice and chance to bargain for this rule change, the Board held, the company committed a ULP.

The Board rejected the company's argument that the memorandum merely provided examples of conduct already forbidden by the employee handbook, finding that the company's conduct before the memorandum demonstrated that it did not consider placing stickers on company property to violate the handbook rule regarding destruction of company property. For instance, the Board noted that, before Maze's termination, the company never disciplined or terminated any employee for placing stickers on company property.

Member Hayes dissented, asserting that the memorandum simply clarified that destruction of company property included defacement. In support of this argument, Hayes noted that as early as November 2008, six months before the memorandum, the company removed stickers from employee lockers and other places and warned at least some employees that they could be disciplined for placing new ones. However, Hayes agreed that Maze's termination constituted a ULP.

Withholding of Merit Wage Increases

The Board affirmed the ALJ's holding that the company's withholding of merit wage increases in 2009 was unlawful since it was no longer permitted to exercise unilateral discretion over merit increases once a bargaining agent had been selected. Instead, the company was required to engage in bargaining with the union before withholding merit increases.

The Board rejected the company's defense that it had a past practice of freezing wages when economic conditions required, finding that the company failed to show, as required by Eugene Iovine, Inc.:

The specific circumstances of the practice.
That the practice occurred with such regularity and frequency that employees could reasonably expect the practice to continue on a regular and consistent basis.

Although the company stated that it had withheld merit increases in 1995, 2000 and 2007, the Board found that these instances were insufficient to provide a reasonable expectation of withholding of wage increases to employees. Member Hayes dissented, finding that the evidence showed that the company's past practice was to grant merit wage increases when economic conditions allowed, and to withhold them when they did not.

Alleged Violation of Johnnie's Poultry Requirements Surrounding Employee Interrogation

The Board upheld the ALJ's conclusion that the company's attorney unlawfully interrogated Ivery when it failed to satisfy the requirements of the NLRB's holding in Johnnie's Poultry Co.

Although employers are generally permitted to interrogate employees on matters involving their Section 7 Rights, this right is limited to fact-finding in preparing a defense against a complaint, and must be exercised in compliance with Johnnie's Poultry Co., which requires that, among other things:

The employee's participation must be obtained voluntarily.
The employer's questioning must occur in a context free from employer hostility to union organization.

For more information about employers' requirements under Johnnie's Poultry, see Standard Document, Unionized Employee Interview Statement (Johnnie's Poultry Statement).

Before and during the meeting with Ivery regarding the pending unfair labor practice charges, the Board found that the company violated both of these requirements by:

Long's statement to Ivery that he did not know what other supervisors would do to Ivery if he did not agree to the interview with the attorney, which the Board found to constitute a threat of retaliation, rendering the interrogation non-voluntary.
The questioning having occurred in the context of numerous, pervasive and substantial ULPs, which included expressions of hostility by the company toward union activity and the company's employees. Some of these expressions, moreover, were committed by the company's CEO.

Member Hayes dissented, noting that the company's attorney furnished Ivery with the assurances required by Johnnie's Poultry Co. Hayes also found that:

The Board majority's conclusion regarding a context of hostility would lead to the result that only innocent employers, and those few whose violations target only concerted but not union activity, can interview employees in preparing a defense.
Long's implied threat was too mild to negate the attorney's subsequent assurances to Ivery that he was free to decline the interview.

Other Holdings

In its decision, the Board also held that:

The company's "Negotiation Updates" were unlawful because they solicited employees to sign a decertification petition tainted by the company's threats of plant closure and layoffs, and would reasonably be viewed by employees as part of the company's campaign to push for decertification of the union. Member Hayes concurred in the judgment, but rejected any implication in the Board majority's decision that employers may not communicate with their employees regarding certain aspects of collective-bargaining negotiations, or to express disapproval of unionization.
The company's refusal to pay Stewart for his time spent attending the OSHA meeting was unlawful, since the company failed to show that its failure to pay was consistent with its practice of not compensating employees who engage in voluntary union business during working time. Although the company argued that Stewart's attendance was voluntary, as he was asked, rather than required, to attend, the Board rejected this argument, finding that the company had in fact required that at least one union representative attend, even if it had not specifically required Stewart's attendance. Member Hayes dissented, stating that:
- Stewart's own testimony showed that he attended voluntarily;
- Stewart and other employee had not been compensated for an earlier OSHA plant walkthrough in which they served as union representatives; and
- in spite of the employer's desire that a union representative attend the meeting, there was no evidence that the meeting could not have been postponed if neither Stewart nor anyone else had attended.
The ALJ erred in holding that the company unlawfully failed to provide the union with names of terminated non-unit employees, finding that the record showed that the company had in fact provided this information to the union in August 2009.

Practical Implications

The Board's decision demonstrates the Board majority's view that where a new policy, even if intended as an illustration of a current rule, has not been previously enforced or specifically announced, it may be construed as a change to existing rules requiring both notice an opportunity for union bargaining.

The decision sets a high bar for employers relying on the past practice exception to justify changes in merit wage increases, indicating that intermittent interruptions of an otherwise consistent policy will not be deemed sufficient to give employees an expectation of future changes or disruptions to the policy. Executive testimony without documentary support will not suffice.

The decision also shows that the mere provision of a list of Johnnie's Poultry assurances to an interviewee will not necessarily suffice to defeat a ULP challenge. Where an employer has committed pervasive ULPs, or where comments by supervisors toward an employee can at all be construed as threatening, employers may be found to have committed an ULP in interviewing that employee.

The majority's approval of a standard that Johnnie's Poultry assurances will not protect an employer conducting an interview if there are pervasive ULPs makes it increasingly difficult for employers to safely interview union representatives to prepare for ULP proceedings.

Finally, the decision highlights the majority's broad understanding of "subjective state of mind" and near-absolute prohibition on employers inquiring about employees' subjective state of mind. An employer asking an employee to confirm his unsolicited statements that his previous NLRB affidavits were inaccurate and that his asserted ULPsdid not occur was held to commit a ULP in part because the employee said in a new affidavit that he did not believe he was treated unfairly rather than saying he was not treated unfairly. The hypertechnical analysis will make it difficult for employers to record employees recanting their prior statements to the NLRB.

Restatement of Property Destruction Rule a ULP; Johnnie's Poultry Assurances Did Not Immunize Coercive Interview: NLRB | Practical Law