Discussing Wages with Fellow Employees is Inherently Concerted Activity: NLRB | Practical Law

Discussing Wages with Fellow Employees is Inherently Concerted Activity: NLRB | Practical Law

In Alternative Energy Applications Inc., the National Labor Relations Board (NLRB) held that an employer violated Section 8(a)(1) of the NLRA by telling an employee not to discuss wages, threatening to discharge him if he did and unlawfully terminating him because it believed that he had discussed his wages with other employees. The NLRB deemed the employee's alleged individual gripes to other employees, which were not to initiate or support group action, "inherently concerted" because they concerned wages.

Discussing Wages with Fellow Employees is Inherently Concerted Activity: NLRB

Practical Law Legal Update 6-594-2865 (Approx. 8 pages)

Discussing Wages with Fellow Employees is Inherently Concerted Activity: NLRB

by Practical Law Labor & Employment
Law stated as of 31 Aug 2023 • USA (National/Federal)
In Alternative Energy Applications Inc., the National Labor Relations Board (NLRB) held that an employer violated Section 8(a)(1) of the NLRA by telling an employee not to discuss wages, threatening to discharge him if he did and unlawfully terminating him because it believed that he had discussed his wages with other employees. The NLRB deemed the employee's alleged individual gripes to other employees, which were not to initiate or support group action, "inherently concerted" because they concerned wages.
In a decision dated December 16, 2014, in Alternative Energy Applications Inc., a three-member delegation of the panel (Board) heading the NLRB's judicial functions unanimously affirmed an NLRB administrative law judge's (ALJ) ruling that the employer violated Section 8(a)(1) of the NLRA by telling an employee not to discuss wages and threatening to discharge him if he did so. A majority of the Board panel (Members Hirozawa and Schiffer) reversed the ALJ's dismissal of an allegation that the employer unlawfully terminated the employee. The majority deemed the employee's alleged individual gripes to other employees, which were not to initiate or support group action, "inherently concerted" because they concerned wages. The majority then relied on an OSHA position statement filed by counsel discussing several reasons why the employee was terminated, including his lowering of morale by among other things griping about his wages, as strong probative evidence of an unlawful motive. (361 N.L.R.B. slip op. 139 (Dec. 16, 2014).)

Background

Alternative Energy Applications Inc. (AEA) hired David Rivera-Chapman in July 2011. Almost immediately after starting, Rivera-Chapman requested and received an hourly rate raise. According to Rivera-Chapman, when his supervisor told him about the raise, the supervisor said, "I do not want you talking to anyone else about this because we have fired employees in the past for talking about their wages." Rivera-Chapman was a poor employee and AEA discharged him two months later. Rivera-Chapman filed an OSHA complaint alleging he was retaliated against for reporting safety concerns. Counsel for AEA submitted a position statement to OSHA noting that he was not retaliated against for reporting safety issues but rather for decreasing morale by not performing his work, reportedly disclosing his higher rate of pay to others (causing a mother of another employee to complain to the company) and using company time to seek other employment.
On January 9, 2012, Rivera-Chapman filed an unfair labor practice (ULP) charge against AEA alleging he was unlawful terminated because he discussed his wages with coworkers. On February 2, 2012, Rivera-Chapman amended his charge to also allege that he was unlawfully instructed not to discuss his wages.
AEA argued at trial that Rivera-Chapman was terminated because he did not fit the company's philosophy and because fellow employees complained about working with him and that the General Counsel failed to satisfy the prima facie case for unlawful discipline in mixed motive cases under Wright Line (251 N.L.R.B. 1083 (1980), enfd. on other grounds, 662 F.2d 899 (1st Cir. 1981)). In its post-hearing brief, AEA argued that the six-month statute of limitations under Section 10(b) of the NLRA on the supervisor's alleged instruction and threat about discussing wages had run before Chapman-Rivera amended his charge to include that allegation (see 29 U.S.C. § 160(b)).
The ALJ:
  • Rejected AEA's 10(b) argument because it was untimely raised.
  • Found that the supervisor's statement violated Section 8(a)(1) of the NLRA because the Board has long held it unlawful for employers to blanketly prohibit employees from discussing wages amongst themselves (Waco, Inc., 273 N.L.R.B. 746, 747-48 (1984)).
  • Recommended that Rivera-Chapman's discharge allegation be dismissed after finding that:
    • there was no direct evidence that Rivera-Chapman engaged in protected concerted activity, such as discussing wages with other employees to initiate, support or encourage group action; and
    • AEA provided credible evidence that it had legitimate reasons for discharging Rivera-Chapman, including that he was "not a good fit" for the company.
AEA and the NLRB's General Counsel each filed exceptions to the ALJ's findings with the Board.

Outcome

The Board panel (Members Miscimarra, Hirozawa and Schiffer) unanimously:
  • Rejected AEA's Section 10(b) defense about the supervisor's statement as untimely raised.
  • Affirmed that the employer unlawfully blanketly instructed and threatened the employee not to discuss his wages with other employees.
The majority (Members Hirozawa and Schiffer):
  • Noted that when applying the Wright Line mixed motive analysis:
    • the General Counsel initially needed to show that Rivera-Chapman engaged in protected activity, AEA knew about that protected activity and AEA had animus;
    • after the General Counsel made the initial showings, AEA needed to show that it would have discharged Rivera-Chapman in the absence of his protected conduct;
    • the General Counsel would need to show that the employer's reason for the discharge was pretextual;
    • the Board treats evidence that an employer believed that an employee engaged in protected concerted activity as it would evidence that an employee actually engaged in protected concerted activity and that the employer knew about that protected activity (U.S. Service Indus., 314 N.L.R.B. 30, 31 (1994)); and
    • the NLRA protects all employees, not just exemplary employees, from adverse action by an employer based on their protected activity.
  • Found that:
    • the employer's position statement to OSHA indicating that AEA discharged Rivera-Chapman in part because a mother of a co-worker complained to AEA about Rivera-Chapman discussing his wages and in several ways undercutting morale was an admission against AEA's interests. It indicated that protected activity was a motivating factor for the discharge;
    • the supervisor's unlawful instruction and threat to Rivera-Chapman about discussing his wages with co-workers was additional evidence of AEA's motive for discharging Rivera-Chapman;
    • there was no need for the General Counsel to show that Rivera-Chapman's wage discussions were undertaken in contemplation of group action because wage discussions are inherently concerted and therefore protected even if an employee undertakes them without the object of initiating group action (Automatic Screw Prods. Co., 306 N.L.R.B. 1072, 1072 (1992));
    • although there were lawful grounds for AEA to discipline Rivera-Chapman, AEA failed to show that it would have disciplined Rivera-Chapman absent its belief that he had discussed wages with other employees; and
    • even if AEA did not discharge Rivera-Chapman for his protected conduct, the evidence showed that it discharged him to prevent his engaging in protected activity. The majority could consider this unalleged and unlitigated ULP liability theory because it was closely related to the tried allegations. (Parexel Int'l, LLC, , 356 N.L.R.B. slip op. 82 at 3 (Jan. 28, 2011).)
  • Held that the General Counsel showed that AEA's belief that Rivera-Chapman engaged in protected wage discussions was a motivating factor in the decision to discharge him.
Member Miscimarra, in partial dissent, noted that:
  • AEA did not violate the NLRA by terminating Rivera-Chapman because:
    • there was no uncontroverted evidence showing that he engaged in protected concerted activity with fellow employees relating to the discussion of wages. Rivera-Chapman testified that he did not discuss wages with fellow employees;
    • there was no evidence that Rivera-Chapman ever said or did anything "looking toward group action," or that AEA believed he did;
    • there was no evidence that AEA believed that Rivera-Chapman engaged in protected concerted wage discussions;
    • the muddled evidence suggested that any discussions between Rivera-Chapman and his co-worker were "mere griping," that, under Board precedent, would not qualify as protected concerted activity;
    • the majority improperly used evidence of general animus rather than particularized animus when applying Wright Line;
    • the majority erred by re-adopting the "inherently concerted" analysis that appellate courts have criticized (for example, see NLRB v. Aroostook Cnty. Regional Ophthalmology Ctr., 81 F.3d 209, 214 (D.C. Cir. 1996) (inherently concerted theory is facially "limitless and nonsensical") and citing the enforcement of Automatic Screw to support applying the theory despite that case being enforced after the employer defaulted at the Sixth Circuit (NLRB v. Automatic Screw Prods., Inc., , 977 F.2d 528 (6th Cir. 1992) (unpublished)). There is no basis for the Board to presume that all discussions of wages are likely to lead to group activity; and
    • the majority erred by applying Parexel which runs against earlier Board precedent by proscribing preemptive strikes against future concerted activity. Also that theory of liability was not alleged or litigated in this case.

Practical Implications

Employers should expect the current Board majority to rely on this decision to permit the General Counsel to rely on inferences and presumptions when the types of evidence traditionally required under Wright Line are lacking.
As Member Miscimarra noted in his dissent:
  • The General Counsel was not required to show AEA had particular animus against employees engaging in wage discussions to spur on group action.
  • The majority was willing to infer that the employer believed that an employee engaged in concerted protected wage discussions based on recitation of hearsay from the mother of a co-worker that the employee discussed his wages. The General Counsel was not required to introduce evidence about the nature or content of the underlying discussion.
  • The "inherently concerted" theory was applied to render wage discussions automatically concerted, even when evidence suggested that discussions were prompted by individual gripes without contemplated group action.

UPDATE:

The current Board majority noted its interest in reconsidering cases like this one deeming conversations about certain topics to be "inherently concerted" (Alstate Maint., LLC, 367 N.L.R.B. No. 68, slip op. at 1, n.2 (Jan. 11, 2019); see Legal Update, NLRB Clarifies Analyses of Concerted and Protected Activities).

UPDATE:

In a decision issued August 31, 2023 and dated August 25, 2023, the NLRB overruled Alstate Maintenance. The NLRB held that Alstate Maintenance improperly restricted the Meyers I and II analyses rather than looking at the totality of the record evidence. It also held that the NLRB erred by overruling WorldMark by Wyndham. (Miller Plastic Prods., Inc., 372 N.L.R.B. No. 134 (Aug. 25, 2023); see 2023 Traditional Labor Law Developments Tracker: Section 8(a)(1): Employer Interference with Employees' Exercise of Section 7 Rights.)