Labor Law

The NLRB Strikes Again: When "Recommendations" = "Directed"

Earlier this fall, the National Labor Relations Board ("NLRB") decided that a company policy recommending that employees not discuss HR-related investigations with fellow employees was in violation of Section 8 of the National Labor Relations Act ("NLRA").  The NLRB strikes again

The background of the Boeing Co. case (No. 19-CA-089374) goes like this:  Boeing Co. had a policy that directed employees to not talk to colleagues about on-going HR investigations.  The NLRB said this was not appropriate based on the employees' right to engage in "protected concerted activity" under the NLRA's Section 7.  As part of the NLRB's enforcement powers, they required Boeing Co. to revise its policy to be in tune with the NLRA.  In response to this requirement, Boeing Co. revised the language to say it was "recommended" that employees not discuss on-going HR investigations with other employees.  The NLRB said this wasn't good enough because when it comes down to it, "recommend" and "direct" are the same thing.  

SIDE BAR: The NLRA applies to all employers (except State and Federal Governments) and all employees, even those that are not unionized. 

If this seems to be absurd, you are in good company.  Internal HR investigations are very, very, (VERY) important.  Whenever an employee files a formal complaint, no matter how benign, it is important that the employer launch an investigation- even if its a small one.  Part of these investigations is collecting testimony from witnesses, the accuser, and the accused.  As you can imagine, this information-gathering expedition can lead to the discovery of some highly sensitive information (think: sexual harassment investigations). Sometimes this sensitive information is private and sometimes it is very personal.  All the time, it should be treated as confidential which is why a policy directing employees to stay quiet about an on-going investigation not only makes sense but is sometimes important.  Now the NLRB says this is a disruption to the employee's right to engage in protected concerted activity and therefore a violation of an employee's rights under the NLRA.  I'm going to have to disagree*. 

So what do you do now? I have no clue.  My first suggestion would be to politely suggest that employees refrain from talking about an on-going HR investigation; however, the NLRB shot this down.  Now HR leaders everywhere are in an NLRB pickle:  Do you run the risk of a squabble with the NLRB? Do you continue to suggest-direct employees to refrain from talking about HR matters?  Or is there some magical word the NLRB finds appropriate?  IDK. 

I've thrown up my hands on this one.  If you have a policy that says something similar - which my guess is most of my readers do -  it may be worth a second glance to see if your wording is NLRB-friendly (or at least friendly-ish).  Otherwise, I simply give you the knowledge to make an informed decision based on calculated risk.  If you want to know more, just ask.  


[*]  Now for the editorial: I do not think asking for employee confidentiality during an HR investigation is in violation of the NLRA.  Protected concerted activity under Section 7 of the NLRA protects the employees' rights to engage in activities intended to benefit the "mutual aid or protection" of the workforce.  During an HR investigation, the information gathered is often personal, private, and specific to a complaint - not about mutual aid and protection of all employees.   Assuring confidentiality is one of the reasons a lot of employees come forward with complaints and that, to me, has far more value to the mutual aid and protection of the workforce.  

Urban Outfitters & the Great Volunteer Debate of 2015

Have you heard the one about that time Urban Outfitters looked up to its employees and shouted "Volunteer for us!" and the employees whispered "no?" [*]  

Last week, Urban Outfitter's parent company URBN had execs send an email to salaried employees offering the employees the golden chance to "volunteer" over a few weekends at a packing and shipment facility.  Unfortunately for Urban Outfitters, the Fair Labor Standards Act, every Federal Circuit, and the Supreme Court agree that a volunteer is not an employee and vice versa, leading me to think URBN could use a basic "employee vs. volunteer" refresher. 

As with many great employment law debates, there is no clear cut "test" to determine if a volunteer is truly a volunteer or riding the fine line to employee-status.  However, there are some widely recognized factors courts look to under the infamous "totality of the circumstances" test.  This means any employer (public or private) should also consider these factors BEFORE classifying someone as a volunteer.  Here are the factors:

1- No Expectation of Compensation.  

This one should be a no-brainer.  We volunteer our time to certain events, functions, and groups because of the personal fulfillment and not the $$$. If an employer even slightly alludes to the fact that compensation will be received in exchange for volunteer time, you may find yourself in a heated misclassification battle that rarely ends well.  On that note, it is not wise to "test drive" an employee by having them start as a volunteer.  If the court thinks you have used the volunteer time as a vessel to employment, that may be enough to tip the cards in favor of that volunteer actually being an employee (hint: this is not good). 

2- Immediate & Primary Benefit is to the Individual and NOT the Employer.

If the "volunteer" is receiving the primary benefit of his or her work (e.g. additional knowledge for school, experience for applications, fulfilling probation requirements, etc) then they are probably classified correctly.  If the employer is the primary beneficiary of the work, not so much.  Example: You are asked by a grocery store to volunteer by bagging groceries for paying customers.  Because the grocery store is the primary beneficiary (and the work is integral to the business- see factor #3), the "volunteer" may need to be compensated as an employee for his or her time (hint: this means minimum wage, overtime, etc). 

3- Whether the Work Performed is Integral to the Employer.  

Volunteers play benign, auxiliary roles in a business.  Employees perform essential work.  Recall that the FLSA was enacted in the 1930's to combat companies with an unfair advantage by paying employees substandard (read: really low) wages.  Not paying people for work that keeps the business alive would be counter to the entire purpose behind the FLSA. 

4- No Coercion or Pressure.  

Once again, should be a no-brainer.  You cannot "force" people to volunteer.  This means it cannot be a requirement, which in turn means the "volunteer" should have the freedom to come and go without major repercussion.  You can have "rules" but you cannot have "demands." 

5- Time of the Activity & Part-Time vs. Full-Time.  

Traditionally, courts like to see volunteering that takes place outside of the volunteer's "normal working hours."  Time spent "volunteering" during normal working hours may be construed as an employee-employer relationship.  Also, courts favor volunteer terms that equate to part-time work.  Volunteering full-time is possible but it is a factor often weighed in favor of the employee-employer relationship.  

6- Similarity to Job Duties.  

Based on recent Department of Labor opinions, you cannot volunteer to do the job you already have.  In other words, it is very, very, very, very rare that someone can safely be a volunteer for the same work they do as an employee.  If a volunteer does perform work he or she typically does at their job, the DOL would argue that the volunteer is really an employee at that point and needs to be paid for the time. 

7- Length of Relationship.  

Volunteers probably shouldn't last forever.  The longer the relationship, the more likely a court will consider the relationship that of employee-employer. 

8- Non-Profits vs. For-Profits.  

The FLSA accounts for public sector and non-profit volunteerism but does not mention private sector volunteerism.  THIS IS A TRICKY SITUATION.  Courts have not been very clear on this issue but it can be assumed that "volunteering" for a for-profit company may be risky and the presumption may favor the employee-employer relationship.  All the above factors would also apply.  

To briefly conclude, I find it absurd that URBN asked its salaried employees to "volunteer" on weekends in a packing and shipment facility.  From recent news reports of the scandal, it appears the URBN exec email stated that the volunteering would be "fun" and suggested it would be similar to a team-building experience.  Please.  Even without know all the specifics of the situation, I would strongly advise URBN against this scheme and would advise any of my readers with regular volunteers to run through the factors and make sure you don't get caught up in a similar media storm.  

Also, just as a side note- these same factors are applied to the infamous "unpaid intern."  Better round-up your college interns and apply these factors to their day-to-day work.  

[*] Borrowed from the greatest book of all time. You're welcome.

NLRB Creates Revised Joint-Employer Test; Franchisor-Panic Begins

I want to start this post by saying how much I adore the National Labor Relations Board ("NLRB").  This fantastic (read: fanatic) government agency is the panel that said AT&T service techs can make house-calls wearing inmate jumpsuits as a uniform (later overturned by the D.C. Circuit who aptly cited "commonsense" as one of their reasons for overturning).  The NLRB also introduced us to the NCAA athlete-employee who can unionize while playing college sports (also recently overturned, crushing college athlete dreams of fast cars, lots of money, and a Teamsters card).  The NLRB is entertaining, revolutionary, and they literally don't GAF. 

So what have they done now?  The NLRB has decided to redefine "joint employer" by changing a test that had been on the books (and in the courts) for over 30 years.  The three Democrats on the panel cheered while the minority Republicans shook their heads.  

Prior to this decision, "joint employer liability" was judged on the actual level of control the joint employer exerts over its employees. The control had to be both direct and immediate.  In other words, no actual/direct control = not a joint employer. 

The new test suggests that anytime an employer shares or co-determines matters governing the "essential terms and conditions" of the employment, the employer will be a joint employer.  "Essential terms and conditions" is inclusive of anything from hiring and firing to discipline, supervision, setting wages and hours, controlling work schedules, assigning work, and determining overtime.  In other words, mere possession of control (even if you don't use it) = joint employer. 

In the case at hand, the "joint employer" (Browning-Ferris Industries of California - a.k.a. "BFI")  used a staffing agency to employ over 200 workers in its California location.  The staffing agency directly controlled most aspects of the workers' employment including benefits, wages, scheduling, on-boarding, and job performance evaluations. BFI had some control and assigned limited tasks to workers, conducted required training sessions, and adopted a "wage ceiling" for employees hired through the staffing agency. Even though BFI's control over the staffing agency employees was minimal at best, it was enough to push them over the threshold into the joint employer zone under the newly revised joint employer test.  

What does this mean for you?  If you are a Franchisor, your liability may have increased exponentially.  If courts adopt this new joint employer test where "mere control" is enough, franchisors may be liable for their franchisee's employees - even if they never meet them, never know them, or never directly manage them.  If you are a contractor, the same may be true of your subcontractor relationships.  And finally, if you staff your company via a staffing agency, consider this NLRB opinion a new warning regarding employment liability.  No one is safe from this decision. 

Luckily, the NLRB is a government agency (read: not a court) and their opinions are not binding, nor are they legal precedent a court must follow.  However, their opinions are suggestions that do often turn into case law as the agency decisions bleed into the courts.  Once again, this is a cautionary tale and something I will be tracking carefully for all my clients.