07/23/2024: Confidentiality and Non-Disparagement Rule in Facebook Severance Agreement Illegal Despite Savings Clause
A 60 year old hot cargo provision ruled illegal.
United Food and Commercial Workers Union, Local 135, 373 NLRB No. 77, 21-CE-300089 (Published Board Decision)
The case concerns whether specific contract language between Ralphs Grocery Company and the United Food and Commercial Workers Unions is unlawful under Section 8(e) of the National Labor Relations Act (the Act). Section 8(e) prohibits unions and employers from entering agreements where the employer agrees to cease doing business with another person or employer.
Administrative Law Judge Amita Baman Tracy found that the contract provision in question, which has been largely unchanged since 1964, was unlawful under Section 8(e) of the Act. The provision required Ralphs to ensure that employees of leased departments (lessees, licensees, and concessionaires) are covered by the union agreement, effectively making it a union signatory clause. Specifically, this clause was found to extend beyond preserving unit work and instead aimed at regulating other employers' labor practices. Similar clauses have been previously ruled unlawful by the NLRB in four separate cases, most recently in 1984.
The NLRB reviewed and affirmed the ALJ's decision, finding that the contractual provision at issue violates Section 8(e) of the Act. The Board ordered the Unions to cease and desist from maintaining and enforcing the unlawful provision and to take affirmative actions to remedy the violation.
Key Cases Cited
Food & Commercial Workers Local 1442 (Ralph's Grocery II), 271 NLRB 697 (1984) - Found nearly identical contract language to violate Section 8(e) as an unlawful union signatory clause.
National Woodwork Mfrs. Assn. v. NLRB, 386 U.S. 612 (1967) - Established that work preservation clauses are lawful primary objectives under Section 8(e), while clauses with secondary purposes are prohibited.
Sheraton University City Hotel, 326 NLRB 1058 (1998) - Held that maintenance of a facially invalid clause violates Section 8(e) regardless of enforcement.
Meta Platforms, Inc., JD-42-24, 19-CA-312724 (ALJ Decision)
This ALJ decision addresses whether Meta Platforms violated Section 8(a)(1) of the NLRA by offering separation agreements containing overly broad non-disparagement and confidentiality provisions. The key points of the legal analysis are:
The ALJ applied the standard from McLaren Macomb, 372 NLRB No. 58 (2023), which held that severance agreements are unlawful if their terms have a reasonable tendency to interfere with Section 7 rights.
The ALJ found that the non-disparagement and confidentiality provisions were overly broad and would reasonably tend to chill Section 7 activity, even with a "safe harbor" provision.
The ALJ concluded McLaren Macomb should apply retroactively, as it would not cause manifest injustice under the factors from SNE Enterprises, 344 NLRB 673 (2005).
The ALJ rejected Meta's arguments that the provisions were lawful under both McLaren Macomb and the prior standard from Baylor University Medical Center, 369 NLRB No. 43 (2020).
The “safe harbor” provision, referred to as Section 4 ("Permitted Actions and Disclosures") in the separation agreement, stated:
Employees are free to initiate communication with, cooperate, and provide relevant information to (including information about the agreement) the NLRB.
Employees are free to participate, cooperate, testify, or otherwise assist in any action, investigation, or proceeding relating to a possible violation of the Act.
"Nothing herein is intended to limit the exercise of your rights under Section 7 of the [Act]."
Employees are permitted to disclose information regarding unlawful acts in the workplace, including sexual harassment, discrimination, or any other conduct they believe is unlawful.
Employees can initiate communications with, cooperate with, and provide information to other government authorities regarding possible legal violations.
The ALJ found that while these assurances went further than in previous cases, they still failed to adequately cure the overly broad nature of the non-disparagement and confidentiality provisions. The ALJ noted that the savings clause did not fully address the range of Section 7 rights, was too far removed from the restrictive provisions in the document, and did not sufficiently clarify what types of protected disclosures and commentary were permitted.
Key Cases Cited
McLaren Macomb, 372 NLRB No. 58 (2023) - Overruled prior precedent and held severance agreements are unlawful if their terms reasonably tend to interfere with Section 7 rights.
Baylor University Medical Center, 369 NLRB No. 43 (2020) - Held broad confidentiality and non-disparagement provisions were generally permissible absent additional violations (overruled by McLaren Macomb).
SNE Enterprises, 344 NLRB 673 (2005) - Set forth factors for determining if retroactive application of a new Board decision would cause manifest injustice.
First Transit, Inc., 360 NLRB 619 (2014) - Established criteria for determining if a savings clause adequately clarifies an otherwise unlawful rule or restriction.
Atlantic HVAC and Property Care, Inc., JD-45-24, 10-CA-301130 (ALJ Decision)
This ALJ decision addresses allegations that Atlantic HVAC and Property Care violated Section 8(a)(1) and (3) of the NLRA by refusing to hire or consider for hire two union-affiliated applicants and making unlawful statements. Key points of the legal analysis include:
The ALJ applied the framework from FES, 331 NLRB 9 (2000) for refusal-to-hire allegations, finding the General Counsel established a prima facie case and the employer failed to show it would not have hired the applicants absent their union affiliation.
For the refusal-to-consider allegations, the ALJ found the employer excluded the applicants from the hiring process due to union animus.
The ALJ found the employer's statements to applicants that it would not hire union-affiliated individuals violated Section 8(a)(1).
The ALJ granted the General Counsel's motion to amend the complaint during the hearing to allege ongoing violations.
The ALJ rejected some of the General Counsel's requested remedies, including a letter of apology and special hiring notices.
Key Cases Cited
FES, 331 NLRB 9 (2000) - Established the framework for analyzing refusal-to-hire allegations.
Toering Electric Co., 351 NLRB 225 (2007) - Modified FES to require that applicants have a genuine interest in employment.
Redd-I, Inc., 290 NLRB 1115 (1988) - Set forth factors for determining if untimely allegations are closely related to timely charges.
Oil Capital Sheet Metal, 349 NLRB 1348 (2007) - Established principles for determining backpay periods in salting cases.
Universal Protection Service, LLC d/b/a Allied Universal Security Services, 02-RC-333871 (Regional Election Decision)
The central legal issue in this case is whether the employees designated as "Supervisors" at Universal Protection Service, LLC are statutory supervisors under Section 2(11) of the National Labor Relations Act (the Act). If classified as supervisors, these employees would be excluded from the bargaining unit.
Supervisory Status under Section 2(11)
Under Section 2(11) of the Act, a supervisor is defined as any individual with the authority to perform at least one of twelve supervisory functions, including hiring, transferring, suspending, laying off, recalling, promoting, discharging, assigning, rewarding, or disciplining employees, or effectively recommending such actions, provided the exercise of such authority is not routine or clerical but requires independent judgment.
Employer's Burden of Proof
The burden of proof lies with the employer to demonstrate that the individuals in question are statutory supervisors by a preponderance of the evidence. This requires detailed and specific evidence that the individuals exercise independent judgment in performing supervisory functions.
Key Findings
Authority to Hire: There is no evidence that Allied Supervisors have effectively recommended hiring since Allied took over operations. The record lacks specific examples or evidence that supervisors participated in hiring under Allied.
Evaluations and Promotions: Supervisors at Allied have not performed evaluations or recommended promotions. The evidence from the predecessor (Sunstate) is insufficient to establish current authority under Allied.
Discipline and Discharge: The record does not show any instances of discipline or discharge recommendations by Allied Supervisors. The testimony provided was conclusory and lacked specific examples.
Assignment and Direction: The scheduling and assignment practices described involve routine and clerical tasks without independent judgment. The evidence did not demonstrate that supervisors possess authority to assign or responsibly direct employees with independent judgment.
Responsibility and Accountability: There is no evidence that supervisors are held accountable for the performance of tasks by other employees in a manner that would indicate responsible direction.
Conclusion
The evidence presented does not meet the burden of proof required to classify the disputed "Supervisors" as statutory supervisors under Section 2(11) of the Act. Therefore, the individuals with the classification of "Supervisor" are included in the petitioned-for bargaining unit.
Key Cases Cited
NLRB v. Kentucky River Community Care, Inc., 532 U.S. 706 (2001): Defines the criteria for supervisory status under Section 2(11) of the Act.
Oakwood Healthcare, Inc., 348 NLRB 686 (2006): Clarifies the definitions and standards for "assign" and "responsibly direct" in the context of supervisory authority.
DirecTV LLC, 357 NLRB 1747 (2011): Explains the requirements for an effective recommendation to qualify as a supervisory action.