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NLRB Is Emphatic: Employers Can’t Ban Negativity!

[April 14, 2014] Employers often think, quite reasonably, that they may lawfully require employees to be positive at work.  Indeed, why shouldn’t employees be required to be positive with colleagues and represent the company in a professional manner?  Unfortunately, the National Labor Relations Board (“NLRB”) disagrees.  Repeatedly, the NLRB has concluded that such “no negativity” policies violate workers’ rights, whether union or non-union.

For example, on April 1, 2014, the NLRB held that a Michigan hospital’s work rules banning negativity and gossip violated the National Labor Relations Act (“NLRA”).  (This was not an April fool’s joke.)  The work rules contained in the hospital’s Values and Standards of Behavior Policy required employees to:

  • avoid “negative comments about … fellow team members,” including managers;
  • “represent [the hospital] in the community in a positive and professional manner in every opportunity”; and
  • “not engage in or listen to negativity or gossip.”

The NLRB concluded that the rules were too broad and could be interpreted by employees as prohibiting activity protected by Section 7 of the NLRA, which gives employees the right to engage in concerted activity.  The NLRB also rejected the hospital’s argument that the rules were lawful because employees participated in drafting them.  As a remedy, the NLRB ordered the hospital to immediately cease and desist from maintaining the challenged rules, give all current employees policy inserts reflecting the revisions, and post and distribute a notice to all employees about the ruling.

The next day, on April 2, 2014, the NLRB struck down similar rules in the employee handbook of a nationwide transportation management company.  That company’s rules prohibited employees from:

  • “discourteous or inappropriate attitudes or behaviors to passengers, other employees, or members of the public;”
  • participating in “outside activities that are detrimental to the Company’s image or reputation”; and
  • “conducting oneself during nonworking hours in such a manner that the conduct would be detrimental to the interest or reputation of the Company.”

The NLRB explained that employees could reasonably construe the rules as limiting their communications concerning employment, despite the presence of another provision in the handbook that notified employees of their union rights.  Unfortunately, the NLRB noted that the “savings” clause was not sufficiently “prominent” in the employee handbook or located in close proximity to the challenged rules.  As with the hospital case above, the NLRB ordered the employer to rescind the policies, provide handbook inserts to current employees to replace the policies, and distribute a notice about the ruling to all employees.

Many employers maintain social media and other policies similar to the policies at issue in these cases.  In light of the NLRB’s continuing focus on such policies, employers (whether unionized or not) should consult with experienced counsel to review their policies and consider whether any changes may be appropriate.

EEOC Continues Assault On Severance Agreements

[March 28, 2014] Continuing its crusade against common provisions in severance agreements, the Equal Employment Opportunity Commission (“EEOC”) filed a suit in February against CVS Pharmacy, Inc. (“CVS”) in an Illinois federal district court.  The EEOC claims that a severance agreement used by CVS violates Title VII because it is “overly broad, misleading and unenforceable.”

Specifically, the EEOC claims that CVS’s severance agreement interferes with employees’ rights to file charges with the EEOC and other agencies or to cooperate with an investigation.  The EEOC seeks, among other relief, reformation of the agreement and additional time for employees who signed the agreement to file administrative charges.

The challenged provisions of CVS’s agreement include:  a notification clause (requiring the employee to notify CVS of any investigation by a state or federal agency); a non-disparagement clause (prohibiting the employee from disparaging CVS); a covenant not to sue clause (prohibiting the employee from filing any charge); and a confidentiality clause (prohibiting the employee from disclosing confidential information without CVS’s consent).

The EEOC is challenging the agreement despite language in the covenant not to sue paragraph stating that nothing in the provision shall interfere with an employee’s right to participate in a proceeding with any agency or to cooperate in any investigation.   Noting that the agreement is five pages long and that the reservation of employee rights is only one sentence, the EEOC contends that this language is not sufficient.

This action follows the EEOC’s filing of a lawsuit in May 2013 challenging severance agreements obtained by Baker & Taylor, Inc.  That suit was resolved by a consent decree in which the company agreed to specify, in future release agreements, that the release did not limit the employee’s right to file a charge with the EEOC or state agency, to participate in any such action, or notably, to recover any appropriate relief.  While the consent decree is not binding on other parties, it reveals the broad language the EEOC favors.

In light of the EEOC’s recent litigation activity, we recommend that employers review their severance agreements and consider whether to strengthen language concerning the employee’s right to file administrative charges and participate in agency investigations.  For example, employers may wish to clearly state, in a separate provision of the agreement, perhaps highlighted in bold, that nothing in the agreement interferes with the employee’s right to participate in or cooperate with any proceeding or investigation.

Obamacare Delayed Again: Medium-Sized Employers Not Required To Provide Health Coverage Until 2016

[February 14, 2014]  Employers with 50 to 99 full-time workers now have an additional year to “play or pay” under the Patient Protection and Affordable Care Act (“ACA”), i.e., to offer health insurance to full-time workers or pay a fee.  Newly issued final rules require these mid-size employers to offer coverage by 2016, instead of 2015.  To be eligible, an employer must certify to the U.S. Treasury Department that it has not laid off employees in order to fall below the 100-employee threshold.  Although not required to provide coverage in 2015, mid-sized employers must still comply with reporting requirements in 2015.

Employers with 100 or more full-time equivalent employees are still required to provide coverage no later than January 1, 2015, or the start of their plan year in 2015 (for non-calendar year plans).  However, to avoid paying a penalty, such larger employers must offer coverage only to 70% of their full-time workers in 2015.  Beginning in 2016, employers must offer coverage to at least 95% of full-time workers.

In order to prepare for 2015, larger employers may use a look-back period during 2014 to determine whether an employee is a full-time employee under the ACA, i.e., works 30 hours or more per week.  (While there are bills pending in Congress that would change the ACA’s definition of full-time employee from the current 30-hour per week rule to a 40-hour rule, the bills have little Democratic support.)  Although it may be tempting to wait and see what further delays or changes may come, larger employers should begin now to prepare for 2015.

E-Cigarettes Reignite Questions About “Smoking” At Work

[January 30, 2014] In light of the increasing popularity of electronic cigarettes (“e-cigarettes”), employers must consider whether to allow employees to use e-cigarettes at work.

E-cigarettes contain liquid nicotine and are battery-powered.  When a user inhales on an e-cigarette, the nicotine is converted into a vapor that the user then breathes out, i.e., “vapes.”  While e-cigarettes are marketed as a healthier tobacco alternative, the potential harms are still unknown.  The Food and Drug Administration (FDA) has not yet regulated e-cigarettes, but is expected to issue rules on marketing, online sales, and minimum age for use soon.

Most states and cities have not addressed the use of e-cigarettes.  Only three states – New Jersey, Utah, and North Dakota – have banned the use of e-cigarettes in the workplace.  More than 100 cities, including New York City and Chicago, have banned the use of e-cigarettes indoors.  Massachusetts has a pending House bill, which has been referred to committee, that would classify e-cigarettes as nicotine products and ban their use in the workplace.

In the absence of statutory and other legal requirements, employers are free to decide whether to allow employees to use e-cigarettes at work.  Employers who permit use point to the positive effect on productivity (because employees can “vape” without taking breaks), the fact that using e-cigarettes may help employees quit smoking traditional cigarettes, and the absence of definitive research showing negative health effects of secondhand exposure to vapor.

On the other hand, some employers are prohibiting vaping at work, likely because some public health officials and health advocacy groups contend that secondhand vapor can cause negative health effects.  In this regard, the FDA’s much anticipated rules may provide important information about whether e-cigarettes are considered to be harmful or not.

While keeping an eye out for new laws regulating e-cigarette use at work, employers should determine whether to prohibit e-cigarettes in their workplace and revise existing smoking policies appropriately. Whether or not an employer decides to ban e-cigarettes from the workplace, any applicable policy should be clear, consistently applied, and communicated effectively to employees.

Senator Warren Introduces Bill Banning Credit Checks Of Job Applicants

[January 8, 2014]  At this time of year when visions of credit card bills dance in our heads, Senator Elizabeth Warren (D-Mass.) has introduced a bill that would ban employers from checking the credit of applicants during the hiring process.  The Equal Employment for All Act would prohibit employers from using credit reports for employment purposes, unless for a national security position or otherwise required by law.

In her floor speech supporting the bill, Senator Warren explained that a bad credit rating is often the result of a personal crisis, and she pointed to research demonstrating that a person’s credit rating has little to no correlation to his or her ability to succeed at work or likelihood to commit fraud.  Other supporters of the bill have argued that credit checks are discriminatory, pointing out that African Americans and Hispanics have considerably lower credit scores than non-Hispanic Whites.

Is this a solution without a problem?  A 2012 survey by the Society for Human Resource Management found that less than half of employers (47 %) conduct employment credit checks.  Only 13% of employers conduct credit checks on all job candidates.  The remaining 34% of employers conduct credit checks only on those candidates applying for sensitive positions, including positions with financial responsibilities, senior executive positions, and positions with access to highly confidential employee information.  For employers who conduct credit checks, most do so only after making a contingent job offer.

If you are in the minority of employers conducting credit checks, we recommend that you stay tuned to this bill, which appears to coincide with the Obama Administration’s renewed focus on income inequality.  We also recommend that you take this opportunity to review your credit-check policy and other background-check practices.