Legally Speaking: HR Policies/Practices Under New Attack by NLRB
Employers’ HR policies and practices are under serious attack currently by the National Labor Relations Board. The NLRB regulates private sector workplaces – union and non-union alike. It is attempting to make numerous dramatic changes on how employers much conduct themselves. Here are some of the changes you need to know to avoid costly claims.
Non-Competes in Employment Agreements to End
The head attorney for the NLRB, Jennifer Abruzzo, has issued Memorandum GC 23-08 contending that most non-compete agreements, frequently used to protect businesses from having their current and former employees work for competitors, violate the National Labor Relations Act (“NLRA”). These agreements are lawful in most states and are governed by state law – at least for now. But, Abruzzo asserts that non-competes violate federal law by discouraging employees from threatening to resign to improve working conditions or to obtain other employment. While the NLRB’s current position has not yet been tested in litigation, it is soon to come. In addition, President Biden has urged the Federal Trade Commission to declare non-competes to be in restraint of trade thereby violating federal anti-trust laws. Will your company be the first to be investigated by the NLRB for attempting to enforce a non-compete agreement?
Disturbing Employee Workplace Behavior and Remarks Now Permissible
Employers and fellow employees must now tolerate a variety of offensive rhetoric, behavior and abuse without recourse. To the extent that these things occur during employee NLRA protected activities of “speaking out regarding conditions of employment,” the NLRB has recently ruled that these employees are protected from discharge or even discipline. The case is Lion Elastomers LLC II, 372 NLRB No. 83 (2023), and it makes it much harder for an employer to protect itself and its employees from vile, disturbing, racist, sexist and insulting attacks. Employers are now left wondering how to maintain peace and civility in their workplaces and escape claims of harassment and discrimination as the “four letter words” and threats fly. Employers now much proceed cautiously when disciplining disruptive employees for conduct previously considered unacceptable in the workplace – context now counts!
Electronic Monitoring of Employees and Workplaces Presumed to Violate the Law
The NLRB’s General Counsel has also issued GC Memorandum 23-02 targeting employers’ use of electronic monitoring technology and other surveillance equipment which may “have a tendency to interfere with” employee rights. Most employers now have cameras in and around the workplace and have GPS devices to track the movements of their employees and vehicles during the work day – all to protect the workplace and detect inappropriate conduct. Throughout our daily lives, we are being monitored with almost every step we take. But, the NLRB General Counsel would outlaw certain monitoring on the basis that such has a tendency to violate employee rights – a “chilling effect” – and she is urging the NLRB to limit the use of these employer tools and to require employers to disclose the use of these technologies and the purpose for using them. Your company may be the first “test case” filed by the NLRB for having cameras in the workplace.
Independent Contractor Test Toughened
The NLRB has revised what it takes to be an independent contractor and has given itself much latitude in how to consider the various factors of “independent-contractorNESS” when making a ruling. The case is the Atlantic Opera, Inc., 372 NLRB No. 95 (2023), and it determined that certain workers have been misclassified as independent contractors. Importantly, for those employers classifying workers as independent contractors, the NLRB now has deemphasized one of the traditional critical elements in the test – “entrepreneurial opportunity” – the ability of the workers to get their own work from various sources and has “muddied” the test to allow for more workers to be considered employees subject to a myriad of employment laws and taxes.
Confidentiality and Non-Disparagement Clauses in Severance Agreements Unlawful
The NLRB has ruled that merely presenting to an employee a proposed severance agreement containing broadly worded clauses requiring the departing employee to keep the terms of the severance agreement confidential and not to “bad-mouth” the company and its people violate the NLRA. McLaren Macomb, 372 NLRB No. 58 (2023). Even maintaining or enforcing these provisions in agreements executed before the law changed on 2/21/23 is considered unlawful. GC Memo 23-05. The General Counsel has declared that other typical severance agreement clauses such as non-solicitation, no-poaching, covenants not to sue, post termination cooperation and broad liability releases could be unlawful as well. While severance agreements remain enforceable many of the typical clauses now have questionable enforceability.
Action to be Taken
Only time will tell whether the NLRB’s General Counsel’s attacks on employers’ traditional HR policies and practices will survive federal appellate court review. But, in the meantime, the pro-employee NLRB is issuing case decisions consistent with her wishes to have nearly 40 previous rulings overturned. And, for now, employers need to rethink how they are applying their policies and practices and have such activities reviewed by experienced labor and employment law counsel. Employers can still weave their way through most of these current obstructions with the right advice and counsel.
For more information, contact Bob Dunlevey, Board Certified Specialist in Labor and Employment Law, Taft Law, (937) 641-1743.
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DRMA members are eligible to receive one free legal consultation per month from employment law attorney Bob Dunlevey. If you need legal advice concerning labor, safety, real estate, or other business issues, give Bob a call at (937) 641-1743. Be sure to identify yourself as a DRMA member.