06/27/2024: An Illegal Nondisparagement and Confidentiality Clause in a Severance Agreement
Another application of McLaren Macomb.
Prime Communications, LP, JD(SF)-19-24, 16-CA-309916 (ALJ Decision)
This decision by Administrative Law Judge Eleanor Laws concerns the alleged violation of Section 8(a)(1) of the National Labor Relations Act (NLRA) by Prime Communications, LP. The charge stemmed from the Respondent's issuance and maintenance of severance agreements containing overly broad nondisparagement and confidentiality provisions.
Legal Analysis
The ALJ's legal analysis hinges on the landmark NLRB decision in McLaren Macomb, 372 NLRB No. 58 (2023). This case overruled prior precedent, returning to the pre-Baylor standard for evaluating severance agreements that potentially restrict Section 7 rights. The key takeaway from McLaren is that the Board will now prioritize the language of the agreement itself and its tendency to coerce, rather than the specific circumstances surrounding its proffer.
Application of McLaren Macomb
The ALJ found that the nondisparagement and confidentiality provisions in the severance agreements at issue mirror those deemed unlawful in McLaren. Both cases involved overly broad language that could potentially chill employees' ability to engage in protected activities under Section 7, including:
Nondisparagement: The agreements prohibited employees from making any disparaging remarks about the company, its employees, or its business, even in connection with a pending legal action. This overly broad language, the ALJ found, could prevent employees from disclosing potential NLRA violations or assisting fellow employees in labor disputes.
Confidentiality: The agreements prevented employees from disclosing the existence or terms of the agreements to anyone except their spouse, tax advisor, or attorney. The ALJ determined that this provision could deter employees from filing unfair labor practice charges or assisting Board investigations, fearing potential penalties for disclosure.
Holding and Remedy
Based on the similarities between the agreement language in McLaren and the agreements at issue, the ALJ concluded that the Respondent's actions violated Section 8(a)(1) of the NLRA. The ALJ ordered Prime Communications to:
Cease and desist from issuing and maintaining severance agreements with the overly broad provisions.
Rescind the unlawful language in the nondisparagement and confidentiality sections of the agreements.
Notify former employees in writing that the unlawfully broad provisions will not be enforced.
Post a notice in conspicuous places at its facility explaining the NLRB's decision and outlining employees' rights.
The ALJ's decision emphasizes the importance of narrowly tailoring severance agreement provisions to avoid restricting employees' Section 7 rights. It also showcases the Board's commitment to upholding the NLRA by applying the McLaren Macomb standard retroactively to agreements proffered both before and after the decision.
Trustees of the University of Pennsylvania, 04-RC-327396 (Unpublished Board Decision)
This unpublished NLRB decision denies Kantaphon Suddhapas' Requests for Review of the Regional Director's Order Dismissing Objections and Certification of Representative in a case involving the Trustees of the University of Pennsylvania and GETUP-UAW.
Key legal analysis:
The Board agreed with the Regional Director's finding that Suddhapas lacked standing to file objections.
The decision cites two reasons for Suddhapas' lack of standing: a) He is not a party to the proceedings within the meaning of Sec. 102.69(a)(8) of the Board's Rules and Regulations. b) He did not meet the requirements for intervention as described in Secs. 11023.3 and 11023.4 of the Board's Casehandling Manual, Part II, Representation Proceedings.
The Board denied Suddhapas' requests for review on the grounds that they raised no substantial issues warranting review.
A request for a stay of the election was denied as moot.
No specific cases were cited or applied in this brief decision. The Board relied on its own Rules and Regulations and Casehandling Manual to support its decision.
This decision emphasizes the importance of proper standing in NLRB proceedings and the strict adherence to the Board's rules regarding who can file objections or intervene in representation cases.
Centerra Group, LLC, 05-RC-313581 (Regional Election Decision)
This Regional Election Decision of the NLRB concerns the petition filed by the International Union, Security, Police and Fire Professionals of America (SPFPA) to represent a unit of Lieutenants and Captains employed by Centerra Group, LLC. Centerra Group provides security services to the USPTO at multiple locations. The employer argued that the petitioned-for Lieutenants and Captains are statutory supervisors under Section 2(11) of the NLRA and therefore ineligible for union representation. The petitioner argued the opposite.
The Regional Director concluded that the Employer has met its burden of proving the Lieutenants and Captains are statutory supervisors, dismissing the petition.
Legal Analysis:
The Regional Director's analysis is based on the following key points:
Section 2(11) of the NLRA: This section defines a "supervisor" as an individual who possesses the authority to engage in at least one of twelve supervisory functions, including assigning, directing, rewarding, disciplining, and effectively recommending such actions.
Independent Judgment: To be a supervisor, an individual must exercise independent judgment when performing these functions, meaning their actions are not merely routine or clerical but involve "discerning and comparing data" and forming an opinion or evaluation.
Burden of Proof: The burden of establishing supervisory status rests with the party asserting it. Lack of evidence is construed against the party making the assertion.
Specific Findings:
The Regional Director found that the Lieutenants and Captains had authority to perform several supervisory functions, including:
Assignment: They assigned PSOs to specific posts, shifts, and overtime periods. However, the Regional Director found the record insufficient to demonstrate they exercised independent judgment in making these assignments. They were bound by the USPTO contract's requirements for staffing levels and relied heavily on seniority and rotation when making assignments.
Responsible Direction: The Lieutenants and Captains monitored PSO performance, conducted post inspections and guard mounts, and corrected deficiencies. But, the Regional Director found insufficient evidence that they were held accountable for the performance of the PSOs, as required by the "responsible direction" function. There were no documented instances of Lieutenants and Captains being disciplined for failing to properly direct PSOs.
Discipline: The Lieutenants and Captains initiated all disciplinary actions under the Employer's progressive discipline policy, from verbal warnings to suspensions and terminations. While the Regional Director recognized that the Employer's progressive discipline policy could be considered "detailed instructions" and limit independent judgment, they found sufficient evidence that the Lieutenants and Captains exercised some discretion in applying the policy, particularly in choosing to not document certain offenses or to issue lesser forms of discipline than the policy would otherwise require. They found that the Employer's progressive discipline system was sufficiently "fixed" to establish the authority to discipline as a supervisory function.
Secondary Indicia of Supervisory Status:
The Regional Director also considered secondary indicia of supervisory status, such as the employee-to-supervisor ratio, the Lieutenants' and Captains' attire and training, and their role as conduits of information to the PSOs. While they noted that secondary indicia are insufficient to establish supervisory status without evidence of a primary supervisory function, they ultimately found these factors reinforced the conclusion that Lieutenants and Captains were statutory supervisors.
Key Cases Applied:
Oakwood Healthcare, Inc., 348 NLRB 686 (2006): Established the requirement of independent judgment for supervisory functions under Section 2(11) and defined the meaning of "responsible direction."
Kentucky River Community Care, 532 U.S. 706 (2001): Confirmed that the burden of proving supervisory status lies with the party making the assertion.
Veolia Transportation Services, Inc., 363 NLRB 902 (2016): Clarified that for disciplinary authority to constitute a supervisory function, it must lead to personnel action without independent investigation by upper management.
Centerra Group, LLC, 05-RC-313970 (Regional Election Decision)
This regional election decision by the NLRB addresses a petition by Federal Contract Guards of America (FCGOA) seeking to represent a unit of lieutenants and sergeants employed by Centerra Group, LLC, a security services provider for the Department of Energy (DOE). Centerra argued these employees are statutory supervisors under Section 2(11) of the National Labor Relations Act (NLRA) and thus ineligible for union representation. The decision concluded that Centerra failed to meet its burden of proving supervisory status for the lieutenants and sergeants, leading to a directed election for the petitioned-for unit.
The legal analysis focused on the 12 supervisory functions defined in Section 2(11) of the NLRA. The decision assessed the specific evidence presented regarding each function, including:
1. Assignment: While lieutenants and sergeants assigned officers to posts and approved shift changes, the decision found their actions were based on factors like officer preference, seniority, and rotation systems, lacking the required independent judgment.
2. Responsible Direction: Lieutenants and sergeants evaluated officers' "fitness for duty," conducted post audits, approved shift swaps and time off, and scheduled breaks. However, these actions were deemed routine, ministerial, and controlled by checklists or superiors, failing to demonstrate independent judgment and accountability.
3. Discipline: Lieutenants and sergeants issued verbal and written warnings, but evidence showed they adhered to a pre-determined disciplinary matrix, lacking discretion and independent judgment. Recommendations for discipline were also subject to independent investigation and review by higher-ranking officers.
4. Hiring: The Employer claimed lieutenants and sergeants participated in "hiring boards" with equal input. However, limited participation by sergeants and conflicting testimony from a lieutenant about their role raised doubt about their authority and independent judgment.
5. Secondary Indicia: The decision did not rely on secondary indicia like supervisor-to-employee ratios, CBA language, or supervisory training because the lack of evidence on primary functions was sufficient.
Conclusion: Based on the totality of the evidence, the decision concluded that lieutenants and sergeants did not exercise independent judgment in any of the 12 supervisory functions. Therefore, they were not statutory supervisors under Section 2(11) of the NLRA and were eligible for union representation. The decision directed a mail-ballot election for the unit of lieutenants and sergeants to determine whether they would be represented by FCGOA.
Significant Cases:
Oakwood Healthcare, Inc., 348 NLRB 686 (2006): This case defines the "independent judgment" requirement for supervisory functions under Section 2(11) and clarifies that "routine or clerical" actions do not suffice.
Kentucky River Community Care, 532 U.S. 706 (2001): This Supreme Court case establishes that the burden of proving supervisory status lies with the party asserting it.
Veolia Transportation Services, 363 NLRB No. 188 (2016): This case clarifies that effective recommendations for discipline must be free from independent investigation or review by superiors.