07/19/2024: Retail Employer Was Too Small For NLRB to Assert Jurisdiction
Also, tips do not count as employer revenue for the NLRB's revenue thresholds.
Tipsy Foods Inc., JD-44-24, 18-CA-315934 (ALJ Decision)
This decision involves unfair labor practice charges filed against Tipsy Foods, Inc. by former employee Dawn McCurdy. The key issues are whether Tipsy Foods unlawfully disciplined and terminated McCurdy for engaging in protected concerted activity, and whether it unlawfully prohibited employees from discussing wages and working conditions.
The ALJ found that McCurdy engaged in protected concerted activity when she complained to coworkers about her hours being cut and her resulting financial difficulties. The ALJ concluded that discussions about hours and pay are inherently concerted activities protected under Section 7 of the NLRA, even without an express intent to engage in group action, citing North Mountain Foothills Apartments, LLC, 373 NLRB No. 26 (2024).
The ALJ determined that Tipsy Foods was aware of McCurdy's protected activity based on statements in her disciplinary warnings about "unproductive conversations" and "damaging morale," as well as testimony from the owner about McCurdy's complaints.
The ALJ found direct evidence of unlawful motive in Tipsy Foods' disciplinary actions against McCurdy, including admissions in its position statement that she was fired because her complaints were "forced on others." The ALJ concluded this made the discipline unlawful without need for further Wright Line analysis.
Nevertheless, the ALJ also analyzed the case under Wright Line, 251 NLRB 1083 (1980), which requires the General Counsel to show protected activity, employer knowledge, and animus, after which the burden shifts to the employer to prove it would have taken the same action regardless of the protected activity. The ALJ found the General Counsel met its initial burden based on:
Statements reflecting animus, like putting McCurdy on probation for her "attitude" after she complained about hours.
The timing of discipline immediately after protected activity.
Failure to investigate allegations against McCurdy before disciplining her.
Shifting and exaggerated reasons for the discipline, including claims about uniform violations not mentioned in her termination notice.
Disparate treatment compared to disciplinary actions against managers.
The ALJ concluded Tipsy Foods failed to meet its Wright Line burden because its stated reasons for disciplining McCurdy were pretextual and unsupported by evidence.
The ALJ also found that Tipsy Foods unlawfully prohibited employees from discussing wages and working conditions by warning McCurdy about having "unproductive conversations" with coworkers instead of bringing concerns to management. The ALJ cited Valley Hospital Medical Center, 351 NLRB 1250 (2007), which held it unlawful to require employees to take concerns through an internal process instead of to coworkers.
As a remedy, the ALJ ordered Tipsy Foods to offer McCurdy reinstatement, make her whole for lost earnings and benefits, remove references to the unlawful discipline from her file, and post a notice. The ALJ also ordered a notice reading, finding it appropriate given the small size of the business and involvement of owners/managers in the violations.
Key Cases Cited
North Mountain Foothills Apartments, LLC, 373 NLRB No. 26 (2024) - Held that discussions about wages are inherently concerted protected activities.
Wright Line, 251 NLRB 1083 (1980) - Established the framework for analyzing alleged discriminatory discipline cases under the NLRA.
Valley Hospital Medical Center, 351 NLRB 1250 (2007) - Held it unlawful to require employees to take concerns through an internal process instead of discussing with coworkers.
Thryv, Inc., 372 NLRB No. 22 (2022) - Established that make-whole remedies should include compensation for direct or foreseeable pecuniary harms.
DIY Bar, 19-RC-345216 (Regional Election Decision)
This regional election decision concerns a petition filed by the Craft Tenders Union to represent employees of DIY Bar, a craft and alcohol service establishment. The key issue is whether the NLRB has jurisdiction over DIY Bar based on its revenue.
The Regional Director dismissed the petition, finding that DIY Bar does not meet the NLRB's jurisdictional standards for retail businesses. The legal analysis focuses on the following key points:
NLRB Jurisdiction: The NLRB has statutory jurisdiction over enterprises affecting interstate commerce, subject to a de minimis rule. However, the Board has discretionary standards limiting its jurisdiction to businesses with a substantial effect on commerce.
Retail Business Standard: For retail businesses, the Board only asserts jurisdiction over those with gross annual revenue of at least $500,000. The Regional Director determined DIY Bar is a retail business based on its direct sales to consumers.
Interstate Commerce: DIY Bar meets the minimal interstate commerce requirement by purchasing $5,000 in goods from outside Oregon.
Revenue Calculation: DIY Bar's gross revenue for both the 2023 calendar year ($487,421) and the past 12 months ($442,900) falls below the $500,000 threshold.
Exclusion of Cash Tips: The Regional Director excluded cash tips from the revenue calculation, citing Board precedent that tips paid directly to employees do not count toward an employer's gross revenue.
The Regional Director emphasized the importance of "bright-line jurisdictional standards" to avoid protracted litigation over preliminary jurisdictional matters. Because DIY Bar's gross revenue fell below the $500,000 threshold, the Regional Director dismissed the petition without addressing other issues raised by the employer, such as whether the petitioned-for unit still existed after recent layoffs.
Key Cases Cited
Carolina Supplies & Cement Co., 122 NLRB 88 (1959): Established the $500,000 gross annual revenue standard for retail businesses.
Jonbruni, Inc. d/b/a Temptations, 337 NLRB 376 (2001): Held that tips paid directly to employees do not count toward an employer's gross revenue for jurisdictional purposes.
NLRB v. Fainblatt, 306 U.S. 601 (1939): Established that the NLRB's statutory jurisdiction extends to all enterprises affecting interstate commerce, subject to a de minimis rule.
Roland Electrical Co. v. Walling, 326 U.S. 657 (1946): Defined retail sales as those made to satisfy personal wants, as opposed to wholesale sales to trading establishments or commercial users.