Joint Employer Standard Overturned!

December 26, 2017

The National Labor Relations Board (NLRB) rendered a great decision last week! It overturned its liberalized joint employment standard announced two years ago in Browning-Ferris Industries of Calif.

That decision overturned decades of precedent, and held that one does not only qualify as a joint employer by exercising actual control over the employees of another, but also by exercising indirect control or potential control. Many (including me) feared that if this standard survived judicial scrutiny, it could prove fatal to many small businesses, including franchisees.

That risk, however, is no more. In Hy-Brand Industrial Contractors, Ltd. the NLRB expressly overturned Browning-Ferris:

“We overrule Browning-Ferris and restore the joint-employer standard that existed prior to the Browning-Ferris decision. Thus, a finding of joint-employer status requires proof that the alleged joint-employer entities have actually exercised joint control over essential employment terms (rather than merely having “reserved” the right to exercise control), the control must be “direct and immediate” (rather than indirect), and joint-employer status will not result from control that is “limited and routine.”

Ironically, the Board concluded that two employers at issue in the case — a contractor and its sub — were joint employers because the general contractor exercised actual control over the essential employment terms of its sub’s employees.

These two issues were the bane of well-intentioned employers for the past few years. Boeing and Hy-Brand will make it significantly easier moving forward for all employers to manage their businesses via well-reasoned, facially neutral work rules, and via arms’-length dealings with other employers.

This is great news for employers!

Prohibiting the use of Cameras & Cellphones for Pictures/Videos at Work

December 17, 2017

Recently, the National Labor Relations Board (NLRB), in a 3-2 decision, issued its most significant decision yet under the Trump administration.  The Board overturned prior Board precedent established in Lutheran Heritage, 343 NLRB 646 (2004) regarding work rules and potential interference with section 7 rights (Union related).  The Trump NLRB reached its decision in Boeing Co. and Society of Prof. Eng. Employees Local 2001, establishing a new standard while noting, “Paradoxically, Lutheran Heritage is too simplistic at the same time it is too difficult to apply . . . producing rampant confusion for employers.”

Under the new standard the Board majority held that, “when evaluating a facially neutral policy, rule or handbook provision that, when reasonably interpreted, would potentially interfere with the exercise of NLRA rights, the Board will evaluate two things: (i) the nature and extent of the potential impact on NLRA rights, and (ii) legitimate justifications associated with the rule.”  As the Board applies this test moving forward, it will classify the rules it analyzes into one of three categories.  Generally, those categories are: 1 – lawful; 2 – warranting individualized scrutiny; and, 3 – unlawful. The Board indicated that the category of lawful rules will include those that “have a reasonable tendency to interfere with Section 7 rights, but the risk of such interference is outweighed by the justifications associated with the rules.”

The Board majority applied this new standard to Boeing’s rule prohibiting employees from using cameras or cell phones to take photos or video in the workplace without a valid business need and prior approval.  It held that this rule was lawful and was justified by important national security concerns.  Board Members Pearce and McFerran each issued their own separate dissenting opinions.

This decision will broaden employers’ ability to implement sensible and neutral rules on security, social media, confidentiality, investigation of complaints and other areas without material concern that the Board might stretch their meaning or scope to find that they are a violation of the NLRA because they could be interpreted in a way that results in an infringement on employees’ Section 7 rights.  We expect further guidance from the Board in this area as more decisions are issued applying section 7 to neutral employer policies and rules.

This decision was very favorable for employers! A neutral policy prohibiting employees from taking pictures and videos without prior permission is huge especially in light of how easy it is to do so with cellphones.


Attractiveness can be a Protected Condition? Maybe!

December 12, 2017

Another day, another celebrity figure accused of harassment. Or worse. When does this get to be too much!

Many of the accounts reveal the abuse of power and the lack of respect shown to women.  A recent case adds another aspect to the ways in which harassment or discrimination against women may occur.

The basic facts:

  • A chiropractor hired an attractive yoga and message therapist to his office staff.
  • While he oversaw the medical aspects of the business, his wife served as the chief operating officer.
  • During the therapist’s six months of employment, she described her relationship with the doctor as professional.
  • His wife, however, was disturbed by her presence.
  • Within 3 months, the chiropractor commented to the therapist that she might be “too cute” and his wife may become jealous.
  • Three months later, the wife texted the therapist that she was no longer welcome at the office and she “should stay the @#%* away from my husband.”
  • Later that day, the chiropractor fired the therapist.

So, what happened next?

Perhaps not surprisingly, the therapist filed a gender discrimination claim.

She said her firing was motivated by sexual attraction and as such was unlawful gender discrimination.

She did not claim that she was actually harassed, but argued that it could be inferred that the discharge resulted from the chiropractor’s desire to appease his jealous wife and therefore the motivation was sexual in nature.

The discharge allegedly occurred for reasons of jealousy, not because the employee had a consensual affair with her boss.

This case was not based on the employee’s conduct, but because the therapist was sexually distracting to the doctor and disturbing to his wife.

While this case originally was dismissed, the appellate court decided to allow the therapist to pursue her claim.

The court explained that what potentially made the discharge unlawful was not that the wife had urged the firing, but the reason she urged her husband to do it and his compliance.

The therapist had not done anything inappropriate and had allegedly performed her work satisfactorily.  She now has an opportunity to overcome her status an at-will employee to prove that the motivation of the chiropractor and his wife was sexual in nature.

The court made clear that a spouse can urge a husband to fire an employee, but what makes it unlawful is the basis for the firing.  In this case, there are allegations of a gender-based motivation, which was sexual in nature.

What the court ruling suggests is that attractiveness can be a protected condition … if the person is singled out because of his/her appearance. It’s not always going to be the case, but at least here, the allegations are enough to let the case proceed.

The motivation to fire someone due to his/her appearance can be viewed as sexual in nature and therefore discriminatory.  In light of the headlines on sexual harassment, this decision adds a new dimension and another source of problems at work.

Court Upholds a Termination While on Medical Leave but…!

December 4, 2017

This is one of the few federal cases that supports terminating an employee while on a leave of absence however watch for the twist at the end! The employee applied for, and was granted, an initial 21-day FMLA leave, and an intermittent leave thereafter upon his return to work. Thereafter his medical issue continued and ultimately, he decided to take short-term disability leave, which he intended to roll over into long-term disability and retirement.

Prior to leaving the company, the employer discovered that he had “removed” a plethora of computer assets from his workplace. According to the police report, he took four laptops, one iPad, three hard drives, one portable DVD-R/RW and RAM Drive, one mouse, and an AC adapter for one of the laptops. The company also discovered that he had used unauthorized third-party software to overwrite more than 27,000 files on the one hard drive he left at his desk. Needless to say, the employer cut the employee’s retirement plans, and terminated his employment. It also emailed one of its computer vendors to advise that it had “launched an internal investigation to determine if the employee had been operating a side business performing computer support while on the clock for the employer.

The Court had little difficulty concluding that employee’s disability played no role in the termination decision. The court reasoned that it was no surprise that the removal of the employer’s property without authorization could lead to the employee’s termination especially since the employer has an anti-theft policy. In addition, they were able to support their decision because they had video of the theft.

Furthermore, according to the facts, the employee had removed two hard drives from the desktop computer, took them home then used an unauthorized program to overwrite over 27,000 files from his workstation’s computer.

As a result, the former employee lost his disability discrimination, and FMLA interference and retaliation claims.

However, note this. The employer was not able to convince the court to dismiss the former employee’s defamation claim resulting from the post-termination comments made to its computer vendor regarding the reason the former employee was terminated.

What lessons can we learn from this case?

Employers must tread very carefully when communicating personnel decisions, or the facts underlying them, to third parties. The employer really did not have a compelling need to disclose its beliefs about their former employee’s wrongdoing. And I’m not sure it disclosed anything untruthful (at least as the facts are presented in the case). But the court was not necessarily convinced, and held that issue over for trial.

In other words, be careful what you communicate about employees and their terminations. Sometimes (most times), less is very much more.