NLRB Judge Rules that Employer Violated Federal Labor Law by Firing Employee for Profanity-Laced Derogatory Comment about a Customer

March 2016
By James B. Sherman, Esq.

Employers are likely to put this recent decision in the ever growing category of unthinkable rulings coming from the National Labor Relations Board (NLRB) these days. An employee of Quicken Loans commented to a co-worker during a conversation that took place in a restroom, that a customer needed to “call a client care specialist and stop wasting my [f-ing] time.” When a manager later learned of this the employee believed to have made the comment, was summarily discharged. Management declared that the offending employee was terminated to uphold a company culture where all employees are expected at all times to display the utmost degree of professionalism and integrity. However, as is becoming more and more common these days, even for those who are not represented by a union, the employee went to the NLRB to file an “unfair labor practice,” or ULP charge. Following an investigation the NLRB’s General Counsel issued a complaint against Quicken Loans and the matter went to a full evidentiary hearing. Following the hearing, Administrative Law Judge (ALJ) Dickie Montemayor ruled in the employee’s favor. Notwithstanding the employee’s use of a vulgarity in reference to a customer, the ALJ determined the profane comment nevertheless amounted to “concerted activity” worthy of protection under Section 7 of the National Labor Relations Act. The ALJ therefore ruled that Quicken Loans violated federal labor law and ordered the firm to: (1) rehire the employee; (2) pay him for all lost earnings and otherwise make him “whole”; and (3) eliminate any work rules that “unlawfully restrain … employees’ rights to discuss working conditions.” In other words, Quicken Loans’ expectations for employees to at all times display professionalism, integrity, etc. interfered with this employee’s “protected right” to refer to its customer using profanity and, therefore, was deemed an unlawful policy that could not be maintained!

Section 7 of the NLRA prohibits employers from unlawfully interfering with or restraining employees’ rights to engage in “concerted activity” for the purpose of “mutual aid and protection” in regards to terms and conditions of employment. For decades in the past, in order for conduct to be protected as “concerted” the NLRB has required that an employee must have acted on behalf of more employees than just himself or herself. However, in the Quicken Loans case the employee’s comment clearly was directed to a co-worker, complaining about a customer. How, you ask, can this have been found to involve mutual aid and protection for others? The ALJ somehow concluded that the employee’s profanity was a “preliminary action” necessary to “lay the groundwork for group activity.” Really? The ALJ appears to have used pure speculation to conclude that the employee’s f-bomb was used to cause the other employee to voice support for his complaints. Again, really?

The ALJ’s decision in Quicken Loans, if it stands, drastically broadens the scope of protected concerted activity to include individual actions or comments that do not involve other employees, and have little or nothing to do with mutual aid or protection. Many employers will no doubt be deeply troubled that this decision found that disciplining an employee for derogatory and vulgar comments aimed at his employer’s customers, was against federal labor law. However, the Quicken Loans decision could be opening a much larger “Pandora’s Box” of problems for employers. By defining concerted/group activities to include individual comments based on an NLRB judge’s unproven assumptions that an employee appearing to be acting alone, may have been “laying the groundwork” for concerted activities at some future point in time, concerted employee activities protected by federal labor law effectively would be without limitation.

Quite understandably, a spokesperson for Quicken Loans called the decision “ridiculous.”

Questions? Contact Attorney James Sherman in our Minneapolis office at (952) 746-1700 or jasherman@wesselssherman.com.

Scary Stuff: Individual Liability for FMLA Violations. HR Directors Beware!

March 2016
By Alan E. Seneczko, Esq.

You go to work. Agonize over the interpretation of the FMLA. Make a tough decision. Frustrating, for sure, but at the end of the day, do you expect to be sued individually for the decision you made? On March 17, 2016, the Second Circuit Court of Appeals said you can.

In Graziadio v. Culinary Inst. of Am., an HR Director became embroiled in a dispute with an employee over the sufficiency of her medical certification and continued absence to care for her two ailing sons, eventually terminating her employment. The employee then sued both the company and the HR Director personally for interfering with her FMLA rights, and the Second Circuit allowed the claim against the HR Director to proceed.

Under the FMLA, an individual may be held liable if she qualifies as an “employer,” which is defined as encompassing “any person who acts, directly or indirectly, in the interest of an employer to any of the employees of such employer.” (Apparently, the fact that the employer must also employ 50 employees is meaningless.) To determine whether an individual meets this test, the courts have applied the “economic reality” test utilized under the Fair Labor Standards Act. Under that test, a number of factors are considered to examine the extent to which the individual possessed the power to control the work in question, including whether she 1) had the power to hire and fire; 2) supervise and control work schedules and conditions of employment; 3) determine rate and method of pay; and, 4) maintain employment records.

Applying these factors, the court found that while HR Director did not make the final decision to discharge the employee, she played an important role in it and conducted the investigation. Another important consideration was the fact that she controlled the employee’s rights under the FMLA. Evidence of the other two factors was not as strong, but the court still determined that enough evidence existed for a jury to find that the director exercised enough control over the worker’s employment to subject her to individual liability.

Although the U.S. Supreme Court and Seventh Circuit (which governs Wisconsin, Illinois and Indiana) have not directly addressed this issue, some federal courts in the Northern District of Illinois have, finding that individuals can be held liable under the FMLA (using a slightly different test). Assuming this trend continues, it is difficult to fathom how an HR director (or someone similarly situated) can avoid a finding that she has the power to control an employee’s work (and the various factors), since someone has to do it. After all, decisions are not made by machines. 

At the end of the day, what is still most important is that any individual responsible for administering the FMLA have a good, working understanding of the law and its many difficult and frustrating nuances, and avoid the prospect of ever being found liable for having violated it.

Want more information about the FMLA, intermittent leave and medical certifications? Be sure to attend “10: A Day of Lists,” where Attorney Seneczko will be addressing this issue. 

Questions? Please contact Wessels Sherman Attorney Alan E. Seneczko at (262) 560-9696, or email alseneczko@wesselssherman.com.

Unionized Employers, Particularly Those that are Newly Organized, Must Know When it is Necessary to Bargain over Layoffs/Closings/Other Business Actions

Recently, the U.S. Court of Appeals in Chicago enforced a decision by the National Labor Relations Board (NLRB) which had found AutoNation, Inc. unlawfully laid off some of its unionized technicians in Florida.  What made the company’s actions unlawful (besides the fact that the employees had recently joined a union) was that the layoffs were done without first bargaining with the employees’ union. The company claimed that dire economic circumstances during the Great Recession, made the layoffs inevitable and, thus, negotiating with the union would have been a waste of time.  The NLRB disagreed, finding that AutoNation was required to negotiate with the International Association of Machinists (IAM) before it could lay off any employees. Because the layoffs were found to be unlawful and the court has now enforced the Board’s findings, the next step will be for the NLRB to fashion a standard “make whole” remedy for the laid off workers. Ultimately, back pay for the employees may be huge since the case is many years old due to the fact that prior rulings of the NLRB were invalidated as a result of the Supreme Court’s ruling in Noel Canning, which found that President Obama’s interim appointments were unlawful.

This case serves as a reminder to employers with unions: negotiating a contract, or “collective bargaining agreement” (CBA) may not be the only occasion where union negotiations are mandated by federal labor law. This may be so even where management has reserved decision-making authority in a CBA (e.g. a well written management’s rights clause providing that management has discretion to decide layoffs, etc.).  Depending on the circumstances, there still may be an obligation to negotiate “effects” of some decisions if not the decisions themselves.  The stakes can be quite high.  Failing to negotiate with a union where required by law, can result in an employer being ordered to pay back pay or in some instances, to reopen a closed facility.

For guidance on issues of “effects bargaining,” “decision bargaining,” and other union negotiation issues, contact Attorney James Sherman at (952) 746-1700 or email jasherman@wesselssherman.com. 

8th Circuit Court of Appeals Approves of NLRB’s Micro Unit Analysis

In FedEx Freight v. NLRB, the 8^th Circuit Court of Appeals (which covers Minnesota, Iowa, and a handful of other nearby states) weighed in for the first time and determined that the analysis under the NLRB’s controversial 2011 Specialty Healthcare decision is acceptable under the National Labor Relations Act.  Under this analysis, unions have the ability to organize small “micro units,” rather than larger bargaining units encompassing all or a large portion of an employer’s workforce.  For example, if the unit meets the test in the Specialty Healthcare decision, a union could organize a small unit of 6 out of an employer’s 106 employees—or multiple unions could each organize units of 6 employees each, and cause the employer to bargain individually with each bargaining unit!  Unions like these micro units because they are often easier to organize, and provide a way to divide and conquer a larger workforce, while employers are more likely to prefer to deal with an entire workforce as a whole or, a large segment thereof. 

Based on this analysis, the NLRB will first determine whether a bargaining unit proposed by the union is appropriate because it consists of employees who are “readily identifiable as a group (based on job classifications, departments, functions, work locations, skills, or similar factors)” and who “share a community of interest.”  Then, if the proposed unit is appropriate under this test, the employer can challenge the unit by showing that there are additional employees who need to be included in the unit to be appropriate—this is a high standard, and merely showing that another unit would be more appropriate is not sufficient.

This analysis is problematic for employers, because it gives unions the ability to pick and choose small groups of supporters to organize, and get a foot in the door to non-unionized employers, and then use these “insiders” to organize another group, and so on.  Additionally, bargaining with multiple different groups of employees is time consuming and leads to inconsistent labor relations.  However, the NLRB is already using this 8^th Circuit decision to support extending its analysis to other circuits.  For assistance in dealing with a union organizing campaign in your workplace, contact Wessels Sherman attorneys at (952) 746-1700 or email

jasherman@wesselssherman.com.

NLRB Judge Rules that Employer Violated Federal Labor Law by Firing Employee for Profanity-Laced Derogatory Comment about a Customer

Employers are likely to put this recent decision in the ever growing category of unthinkable rulings coming from the National Labor Relations Board (NLRB) these days.  An employee of Quicken Loans commented to a co-worker during a conversation that took place in a restroom, that a customer needed to “call a client care specialist and stop wasting my [f-ing] time.” When a manager later learned of this, the employee believed to have made the comment was summarily discharged.  Management declared that the offending employee was terminated to uphold a company culture where all employees are expected at all times to display the utmost degree of professionalism and integrity.  However, as is becoming more and more common these days, even for those who are not represented by a union, the employee went to the NLRB to file an “unfair labor practice,” or ULP charge. Following an investigation the NLRB’s General Counsel issued a complaint against Quicken Loans and the matter went to a full evidentiary hearing. Following the hearing, Administrative Law Judge (ALJ) Dickie Montemayor ruled in the employee’s favor. Notwithstanding the employee’s use of a vulgarity in reference to a customer, the ALJ determined the profane comment nevertheless amounted to “concerted activity” worthy of protection under Section 7 of the National Labor Relations Act.  The ALJ therefore ruled that Quicken Loans violated federal labor law and ordered the firm to: (1) rehire the employee; (2) pay him for all lost earnings and otherwise make him “whole”; and (3) eliminate any work rules that “unlawfully restrain … employees’ rights to discuss working conditions.”  In other words, Quicken Loans’ expectations for employees to at all times display professionalism, integrity, etc. interfered with this employee’s “protected right” to refer to its customer using profanity and, therefore, was deemed an unlawful policy that could not be maintained!

Section 7 of the NLRA prohibits employers from unlawfully interfering with or restraining employees’ rights to engage in “concerted activity” for the purpose of “mutual aid and protection” in regards to terms and conditions of employment. For decades in the past, in order for conduct to be protected as “concerted” the NLRB has required that an employee must have acted on behalf of more employees than just himself or herself. However, in the Quicken Loans case the employee’s comment clearly was directed to a co-worker, complaining about a customer.  How, you ask, can this have been found to involve mutual aid and protection for others?  The ALJ somehow concluded that the employee’s profanity was a “preliminary action” necessary to “lay the groundwork for group activity.” Really? The ALJ appears to have used pure speculation to conclude that the employee’s f-bomb was used to cause the other employee to voice support for his complaints. Again, really? 

The ALJ’s decision in Quicken Loans, if it stands, drastically broadens the scope of protected concerted activity to include individual actions or comments that do not involve other employees, and have little or nothing to do with mutual aid or protection.  Many employers will no doubt be deeply troubled that this decision found that disciplining an employee for derogatory and vulgar comments aimed at his employer’s customers, was against federal labor law.  However, the Quicken Loans decision could be opening a much larger “Pandora’s Box” of problems for employers. By defining concerted/group activities to include individual comments based on an NLRB judge’s unproven assumptions that an employee appearing to be acting alone, may have been “laying the groundwork” for concerted activities at some future point in time, concerted employee activities protected by federal labor law effectively would be without limitation. 

Quite understandably, a spokesperson for Quicken Loans called the decision “ridiculous.”

Questions? Contact Attorney James Sherman in our Minneapolis office at (952) 746-1700 or jasherman@wesselssherman.com.

Court of Appeals Upholds NLRB Decision Backing Employee Posters Aimed at Damaging their Employer’s Business During Union Organizing

The Eighth Circuit Court of Appeals has upheld a determination by the National Labor Relations Board which held that a Minnesota Jimmy John’s franchise violated federal labor law during a union attempt to organize its employees.  What did the employer do to get in such trouble with the NLRB, you ask?  MikLin Enterprises Inc., the franchisee, was found guilty of removing posters placed near its restaurant entrances by certain pro-union employees and terminating the employees responsible for the postings.  Why would an employer get so upset about a poster, you ask?  The posters in this case complained that employees were not paid sick leave and, therefore, implied that Jimmy John’s sandwiches were being prepared by sick employees who might get customers sick.  Specifically, the posters stated to potential customers approaching the restaurant: “We Hope Your Immune System Is Ready Because You’re About To Take the Sandwich Test ...” Clearly, the posters were deliberately designed to drive customers away and harm the Jimmy John’s franchise’s reputation and business.  The case raises the question: Just how far can employees go in the name of promoting a union?  The answer from the NLRB and, on appeal, the 8^th Circuit?  Pretty far!  At least one appellate judge dissented, arguing that such “damaging disparagement” crossed the line of what federal labor law ought to protect as “concerted activity” in support of a union.  Many employers and people in general, probably agree with the dissenting judge!

Questions? Contact Attorney James Sherman at (952) 746-1700 or jasherman@wesselssherman.com. 

Minnesota Employee Handbook Updates for 2016

An employee handbook needs to be a living document that is continually reviewed and updated to reflect the rapidly changing state, federal and local laws, as well as changes that new technology brings to the way workplaces operate.  There are many reasons you may wish to revise your handbooks if you have not done so within the past few years, including new laws that require specific handbook provisions, new or revised clauses that may be advisable due to new laws or agency actions, or increased agency scrutiny of certain types of clauses.

The following is a discussion of several types of clauses that should be reviewed for one or more of these reasons.

1.  Accommodation policy that includes making accommodations for pregnant employees

• As part of the Women’s Economic Security Act (WESA) Minnesota passed a law that specifically requires providing reasonable accommodations for eligible pregnant workers, even beyond those that may be required under the ADA.  Such accommodations may include providing additional break time, seating, changes to facilities, equipment or furniture, providing a leave of absence even after 12 weeks of FMLA leave, light duty, acquiring/modifying equipment or devices, job restructuring, part-time or modified work schedules, or reassignment to a vacant position.
• Additionally, employers are required to provide reasonable break time and a private place to express breast milk at work.
• In connection with these policy changes, managers should be trained on these accommodation requirements so they don’t illegally refuse to provide accommodations.

2.  Make sure FMLA policies do not exclude same-sex spouses in the definition of a spouse

• Under the Supreme Court’s rulings, same-sex spouses are entitled to the same legal protections as opposite-sex spouses, including FMLA leave to care for a spouse with a serious health condition, etc.

3.  Medical marijuana

• Minnesota employers may not discriminate against or penalize an employee or applicant based on the person’s status as a legal medical marijuana user or for a legal medical marijuana user’s positive drug test for medical marijuana, unless the individual used, possessed, or was impaired by medical marijuana on the premises of the place of employment or during the hours of employment. 

4.  The NLRB’s scrutiny of policies

The National Labor Relations Board (NLRB) in particular has taken a special interest in handbook provisions over the past several years.  The NLRB invalidates policies that explicitly prohibit employees from engaging in protected activities under Section 7 of the National Labor Relations Act (NLRA); i.e., “concerted activity” for the purpose of collective bargaining or other mutual aid or protection.  In other words, if employees work together to try to address or complain about their wages, hours, or any other terms and conditions of employment, that activity will generally be legally protected as concerted activity.  In addition, even if a policy does not explicitly prohibit this activity, today’s NLRB will still find it to be unlawful if:

• Employees would in it its opinion “reasonably construe the rule to prohibit  concerted activity;
• The rule was enacted in response to concerted activity; or
• The rule was actually applied to restrict concerted activity.

Policies that have come under fire for these reasons include confidentiality policies; policies regarding employee conduct toward the company and supervisors; policies regarding employee conduct towards co-workers; policies regarding third party communications; policies restricting use of company logos, copyrights, and trademarks; policies restricting photography and recording; policies restricting employees from leaving work; conflict of interest rules; and social media policies.

5.  Wage disclosure protection

As part of the WESA, Minnesota passed a new law that prohibits employers from:

• Requiring nondisclosure by an employee of his or her wages as a condition of employment;
• Requiring an employee to sign a waiver or other document which purports to deny an employee the right to disclose the employee’s wages; or
• Taking any adverse employment action against an employee for disclosing the employee’s own wages or discussing another employee’s wages which have been disclosed voluntarily.

Employers are required to include in their handbooks a clause laying out employees’ rights and remedies under this law.

6.  No fault attendance policies

• Certain laws, such as the FMLA and the ADA can provide legal protection for certain employee absences, so no fault attendance policies that penalize employees after a certain number of absences, no matter what the reason, may need to be modified to allow for exceptions for legally-protected absences.

If your business has not updated its handbook within the past few years, it should be a top priority for 2016.  For a free quote to update your handbook, contact Wessels Sherman attorneys in our Minnesota office at (952) 746-1700 or email jasherman@wesselssherman.com.

Legislative Update: Illinois Private Employers Can Now Legally Give Preference to Certain Veterans

March 2016
Anthony J. Caruso, Jr.

Patriotism lives in Illinois. Companies can now support our troops returning from active duty by providing them jobs. A new Illinois law allows private employers to give preference to these veterans.

The Veterans Preference in Private Employment Act became effective January 1, 2016.

What EMPLOYERS are covered under the law?

Any private (non-public) employer employing one or more employees within Illinois.

What VETERANS are covered under the law?

1.  One who has served in the armed forces of the United States for a period of more than 180 days and who was discharged or released from active duty under conditions other than dishonorable;
2. One who was discharged or released from active duty with the armed forces because of a service-connected disability; or,
3. One who was a member of the Illinois National Guard who has never been deployed but separated under conditions other than dishonorable.

 What does a VETERANS PREFERENCE EMPLOYMENT POLICY mean?

It is a private employer’s voluntary preference in hiring, promoting or retaining a veteran over another equally qualified applicant or employee.

How does a private employer ADOPT a Veterans Preference Employment policy?

1. Policy is in writing (i.e., employee handbook);
2. Policy is publicly posted at the place of employment or on company website;
3. Job application informs all applicants of the Veterans Preference Employment Policy and where the policy may be obtained; and,
4. Employer applies the policy uniformly for employment decisions (hiring, promoting, and retention).

 Under this new law, Illinois private employers now have a legal basis to give preference to veterans without the risk of an alleged discriminatory policy. Employers should record and document the veteran’s preference when hiring, promoting or retaining employees.

Questions? Contact Anthony J. Caruso, Jr. of Wessels Sherman’s St. Charles office at (630) 377-1554 or via email at ancaruso@wesselssherman.com.