11/12/2024: Employers Can No Longer Lie About Effect of Unionizing on Employee-Employer Relationship
Board prospectively overrules Tri-Cast.
Siren Retail Corp. d/b/a Starbucks, 373 NLRB No. 135, 19-CA-290905 (Published Board Decision)
During mandatory meetings at Starbucks' Seattle Reserve Roastery, a manager told employees that if they wanted to maintain a direct relationship with leadership, they should vote against unionization. The manager also said that if something wasn't in a union contract, it wouldn't be a topic for discussion with leadership. The Administrative Law Judge found these statements lawful under Tri-Cast, Inc., and the Board unanimously agreed with this result.
However, while affirming the outcome, the Board majority announced it would prospectively overrule Tri-Cast. Under Tri-Cast, the Board had consistently found that employer statements about changes in the employee-employer relationship after unionization were lawful, regardless of their specific content or context. The majority found this categorical approach problematic.
The Board explained that Tri-Cast conflicted with the Supreme Court's decision in NLRB v. Gissel Packing Co., which requires employer predictions about unionization's effects to be based on objective facts beyond the employer's control. The majority also noted that Tri-Cast failed to account for Section 9(a)'s proviso, which explicitly preserves employees' right to present grievances directly to their employer even after unionization.
Going forward, the Board will analyze such statements case by case, considering their specific content and context. Employers will need to ensure their statements about post-unionization changes are based on objective facts and accurately reflect legal requirements. The new standard will be similar to how the Board analyzes employer statements about striker replacements under Eagle Comtronics.
This decision represents a substantial change in how the Board will evaluate employer statements about post-unionization changes in the workplace relationship, requiring more careful attention to specific facts and circumstances rather than applying Tri-Cast's broad protection of such statements.
Significant Cases Cited
NLRB v. Gissel Packing Co., 395 U.S. 575 (1969): Employer predictions about unionization must be based on objective facts about consequences beyond their control.
Tri-Cast, Inc., 274 NLRB 377 (1985): The Board previously held that employer statements about the effect of unionization on individual employee relations are lawful.
Eagle Comtronics, 263 NLRB 515 (1982): Employers may tell employees about striker replacements without fully detailing their legal rights, but cannot make statements that threaten employees with the loss of rights in a manner inconsistent with the law.
Davis Defense Group, Inc., 373 NLRB No. 132, 10-CA-284049 (Published Board Decision)
In 2021, Shannon Webster worked as a Logistician 3 for Davis Defense Group (DDG), a federal contractor providing services to the Navy at the Naval Information Warfare Center. Webster engaged in numerous email exchanges with government officials and her employer about work schedules and "core hours" requirements. These communications led to a reprimand on September 1, 2021, and her discharge on September 27, 2021.
Administrative Law Judge Robert A. Giannasi heard the case and dismissed all allegations. He found Webster's communications were not protected concerted activity because they represented personal rather than group concerns, contained incorrect information about core hours applying to contractors, and lacked authorization from other employees. He determined that even if the activity had been protected, the discipline was motivated by legitimate concerns about chain of command violations and government client complaints.
The NLRB panel largely agreed with the ALJ but made one significant reversal. The Board found that the September 1 reprimand letter violated Section 8(a)(1) of the National Labor Relations Act by requiring supervisor approval before employees could email coworkers and third parties about workplace concerns. This restriction, the Board majority concluded, would reasonably be understood to limit employees' Section 7 rights to discuss terms and conditions of employment.
Significant Cases Cited
Wright Line, 251 NLRB 1083 (1980) - Established framework for analyzing dual-motive discrimination cases
Meyers Industries, 281 NLRB 882 (1986) - Defined test for determining when individual employee's conduct is "concerted"
Advanced Marine Concepts, LLC d/b/a Atlas Docks, JD--69-24, 14-CA-326677 (ALJ Decision)
The case arose when Advanced Marine Concepts LLC d/b/a Atlas Docks fired employee Logan Linker shortly after another employee reported to management that Linker was discussing wages with coworkers. On the morning of September 27, 2023, employee Dusty Roberts told owner Matthew Hasselbring that Linker was discussing his wages with other employees. Within five minutes, Hasselbring called Linker into a meeting and terminated him.
The ALJ analyzed the termination under Wright Line, finding the General Counsel established its prima facie case through evidence of protected activity (wage discussions), employer knowledge (Roberts' report to management), and animus (immediate timing of termination and direct statements during the termination meeting). The employer's defense that it fired Linker for attendance issues was found pretextual, particularly given the lack of any recent attendance problems and departure from normal progressive discipline practices.
Regarding handbook provisions, the ALJ applied the Stericycle framework, which examines whether rules would reasonably tend to chill Section 7 rights from the perspective of an economically dependent employee. The confidentiality provisions were found unlawful because they broadly prohibited discussing "internal business affairs" and financial information, which could reasonably be interpreted to restrict wage discussions.
The ALJ also applied the Stericycle framework to a non-compete clause. The caluse stated:
As terms of employment, no employee shall seek employment with another dock, dock Service Company, or provide services in direct competition of the Company or attempt to solicit business or services from customers of the Company, for a period of three years after separation from Company.
The General Counsel argued these provisions could chill protected activity by:
Preventing concerted threats to resign for better conditions
Restricting employees from accepting work with competitors as part of protected activity
Limiting ability to solicit coworkers to work elsewhere as protected activity
Constraining multi-employer organizing efforts
The ALJ rejected these arguments, finding the non-compete provisions lawful because:
It only restricted work for direct dock-building competitors
Employees remained free to use their skills (welding, carpentry, labor) in other industries
The provisions were narrowly tailored to protect legitimate business interests
Given employees' broad skill sets, the restrictions did not materially limit their employment opportunities
The three-year duration and scope were reasonable given the specialized nature of dock construction
Earlier this year, a different NLRB ALJ found that a non-compete clause did violate Section 8(a)(1) of the NLRA. The Board has yet to decide a case on the question.
Significant Cases Cited
Wright Line, 251 NLRB 1083 (1980): Established framework for analyzing discriminatory motivation in employment actions
Stericycle, 372 NLRB No. 113 (2023): Established current test for analyzing facially neutral work rules
Double Eagle Hotel & Casino, 341 NLRB 112 (2004): Found confidentiality rules prohibiting sharing of employee information violate the Act
MCPC Inc., 360 NLRB 216 (2014): Ruled overbroad confidentiality rules restricting discussion of financial information are unlawful
Trader Joe’s East, JD-70-24, 01-CA-296847 (ALJ Decision)
On May 14, 2022, employees at the Trader Joe's store in Hadley, Massachusetts presented a letter announcing their desire for union representation. The Union won the election in July 2022, making Hadley the first unionized Trader Joe's store. Multiple unfair labor practice charges followed, primarily concerning four categories of conduct.
First Category - Union Insignia Restrictions: During a two-week period from May 30 to June 11, 2022, store management repeatedly restricted employees from wearing union buttons. Supervisors initially told employees to remove union buttons or go home. When employees refused, two were sent home early. Management then changed tactics, warning that wearing buttons would violate dress code and could affect performance reviews. The ALJ found these restrictions violated Section 8(a)(1), applying the Tesla framework that interference with union insignia is presumptively unlawful. The ALJ rejected the company's argument that the conduct was de minimis, noting the number of violations and lack of effective repudiation.
Second Category - Retirement Benefits: On December 2, 2022, Trader Joe's and the Union reached an agreement to provide unionized employees the same retirement benefits as non-union employees. However, in January 2023, the company implemented less favorable benefits for union employees. The ALJ found this violated Section 8(a)(5) as an unlawful contract modification. Despite disputed acceptance terms, the ALJ found a valid agreement existed, applying contract formation principles from Bath Iron Works. The company's provision of lesser benefits to union employees constituted an unlawful modification of that agreement.
Third Category - Employee Discipline: The case included several allegations of discriminatory discipline. For employee Arthur Hoagland, the ALJ found his written warning and negative appraisals violated Section 8(a)(3), as they were motivated by his union activity. For employee Stephen Andrade, the ALJ found his negative appraisal unlawful as it was based on protected concerted activity of raising group complaints about working conditions. However, the ALJ found Andrade's ultimate discharge lawful, as it was based on repeated failures to follow supervisory instructions rather than protected activity.
Fourth Category - Social Media Policy: The ALJ analyzed Trader Joe's social media policy under the new Stericycle framework. The policy restricted employees' social media posts that could be "inaccurate, confidential, or injurious to our brand" and directed employees to raise workplace concerns with management rather than posting online. The ALJ found this would reasonably tend to chill Section 7 rights and rejected the company's argument that a savings clause made the policy lawful.
Additional Violations: The ALJ found several other 8(a)(1) violations, including threats about:
Negative appraisals for wearing union buttons
Wage freezes during negotiations
Worsening working conditions if employees chose union representation
Implied threats in communications about bargaining
Remedy: The ALJ ordered:
Rescission of unlawful policies and disciplinary actions
Backpay for employees sent home for wearing union buttons
Make-whole relief for retirement benefit differences
Standard notice posting requirements
The ALJ dismissed several allegations seeking changes in Board law, noting his obligation to apply existing precedent. He also denied the company's motion for sanctions related to document production issues, finding the requested sanctions too severe and no showing of prejudice.
Significant Cases Cited
Tesla, Inc., 371 NLRB No. 131: Established that interference with union insignia is presumptively unlawful
Wright Line, 251 NLRB 1083: Created framework for analyzing discriminatory motivation in employment actions
Stericycle, 372 NLRB No. 113: Established new test for analyzing facially neutral work rules
First Transit, 360 NLRB 619: Set standards for evaluating savings clauses in workplace policies
Bath Iron Works, 345 NLRB 499: Established framework for analyzing contract modification violations