12/30/2024: Non-Disparagement Rule in Severance Agreement Illegal
Class action employment lawsuits are protected activity.
Kirin Transportation Inc. d/b/a Kirin Transportation, 374 NLRB No. 4, 29-CA-270485 (Published Board Decision)
In November 2020, dispatcher Qian Wang and another employee filed a wage and hour lawsuit against Kirin Transportation, a company providing non-emergency transportation services to senior citizens. Other employees later joined the lawsuit.
On November 25, 2020, CEO Song called Qian Wang and her father Tiande Wang (a driver) into separate meetings. Song questioned them about the lawsuit and threatened retaliation if they did not withdraw it. Shortly after, the company suspended Qian Wang, claiming she made mistakes in her work. The day after Tiande Wang formally joined the lawsuit, the company suspended him as well.
In February 2021, two other drivers - Lu Yang and Ya Xu - joined the wage lawsuit. About a week later, the company fired them without explanation. In June 2021, the fired employees filed a second lawsuit alleging retaliation. Two weeks after that, Kirin Transportation filed a state court lawsuit against the employees.
Administrative Law Judge Green found that the employees were engaged in protected concerted activity when they filed the wage lawsuits. He determined that the timing of the suspensions and firings, combined with Song's direct threats about the lawsuit, showed the company took these actions to retaliate against the employees for their protected activity. The ALJ also found that portions of the company's state court lawsuit were baseless and retaliatory.
The NLRB affirmed most of Judge Green's findings but decided to sever and retain for further consideration the allegation about the retaliatory state court lawsuit. The Board determined the other violations warranted enhanced remedies, including:
Reinstatement and backpay for the suspended/fired employees
Compensation for job search expenses
A broad cease-and-desist order
A requirement that management read a notice about employees' rights to assembled employees
The Board found these enhanced remedies were warranted because the violations were particularly serious and showed a general disregard for employee rights.
Significant Cases Cited
Meyers Industries, 281 NLRB 882 (1986): Employees’ actions qualify as protected concerted activity if they act with mutual aid and protection in mind.
Cordua Restaurants, Inc., 368 NLRB No. 43 (2019): Filing a joint lawsuit to address unpaid wages is protected concerted activity.
Bill Johnson's Restaurants, Inc. v. NLRB, 461 U.S. 731 (1983): Lawsuits filed by employers against employees are unlawful if baseless and retaliatory.
The Atlanta Opera, Inc., 372 NLRB No. 95 (2023): Reinstated the standard for determining employee versus independent contractor status.
Pittsburgh Post-Gazette, JD-83-24, 06-CA-259157 (ALJ Decision)
This case concerns multiple allegations of unfair labor practices against PG Publishing Co., Inc. d/b/a Pittsburgh Post-Gazette. The central legal issues revolve around:
Unilateral Changes to Employment Terms: The company allegedly made unilateral changes to employment conditions, including altering a five-shift-per-week guarantee without bargaining to impasse.
Interim Health Insurance Agreement: Allegations include failure to bargain in good faith regarding health insurance benefits and imposing unilateral terms.
Bad-Faith Bargaining for a Successor Agreement: The employer is accused of bargaining without a genuine intent to reach an agreement, instead insisting on predictably unacceptable proposals.
Findings of the ALJ:
The ALJ dismissed the allegation regarding the unilateral change of the five-shift-per-week guarantee. This claim was subject to collateral estoppel because the Third Circuit had already rejected it.
The ALJ dismissed the allegation concerning bad-faith bargaining for an interim health insurance agreement, finding the Post-Gazette engaged in genuine negotiations on this issue.
The ALJ found that PG Publishing violated Section 8(a)(5) and (1) of the NLRA by bargaining in bad faith during negotiations for a successor collective-bargaining agreement.
Regarding the violation, between 2017 and 2023, the parties met sporadically for bargaining sessions. The Post-Gazette's proposals consistently included:
Allowing supervisors to perform union work
Company discretion over work hours and scheduling
Unilateral control over healthcare benefits
Broad management rights to outsource operations
Expanded no-strike provisions
These proposals would leave union with substantially fewer rights than law provides, an indicator of surface bargaining intended to frustrate agreement.
Significant Cases Cited
Sabine Towing & Transportation Co., 263 NLRB 114 (1982) - Established Board's recognition of collateral estoppel principles
Phillips 66, 369 NLRB No. 13 (2020) - Established that touchstone of bad faith is purpose to frustrate agreement
ICW Group Holdings, Inc., JD(SF)-40-24, 21-CA-329099 (ALJ Decision)
In late 2023, ICW Group Holdings, Inc., an insurance company in San Diego, laid off 10 employees. Each employee received an identical separation agreement. The agreement included two key provisions: a nondisparagement clause and a confidentiality requirement.
The nondisparagement provision prohibited employees from making any "derogatory, disparaging, critical, or negative statements" about ICW, including on social media. The confidentiality provision required employees to keep the agreement's terms strictly confidential.
James M. Ramsay, one of the affected employees, filed an unfair labor practice charge with the NLRB. The NLRB's General Counsel then issued a complaint alleging these provisions violated federal labor law.
Administrative Law Judge Mara-Louise Anzalone heard the case in July 2024. ICW defended its agreement by arguing that it lacked monetary penalties and included exceptions for certain protected activities. The company also pointed to various "savings clauses" in the agreement that attempted to preserve employee rights.
Judge Anzalone rejected these defenses. She found that the mere presence of broad restrictions on employee speech violated the National Labor Relations Act, regardless of whether penalties were specified. She also determined that the agreement's exceptions and savings clauses were insufficient because they required legal expertise to understand and didn't fully protect employee rights.
The judge ordered ICW to:
Stop using these provisions in separation agreements
Rescind the problematic language
Notify former employees that these provisions are void
Post notices about the violation
Distribute these notices electronically where appropriate
ICW was given 14 days to revise the agreements and 21 days to file certification of compliance with the Regional Director.
Significant Cases Cited
McLaren Macomb, 372 NLRB No. 58 (2023): Severance agreements that condition benefits on waiving statutory rights are unlawful unless narrowly tailored to preserve Section 7 rights.
Ingram Book Co., 315 NLRB 515 (1994): Savings clauses must be clear and unambiguous to be effective in preserving employees' rights.
Kelly Services, Inc., 368 NLRB No. 130 (2019): Restrictions on monetary relief in NLRB proceedings are unlawful as they undermine the enforcement of statutory rights.
Westinghouse Electric Corp., 240 NLRB 905 (1979): Overbroad language cannot be salvaged by vague savings clauses that require employees to understand nuanced legal terms.
NLRB v. Scrivener, 405 U.S. 117 (1972): Employees must have unrestricted access to the NLRB for the effective enforcement of their rights.
FVE Managers, Inc., 02-RC-319643 (Regional Election Decision)
On June 9, 2023, SEIU1199 filed a petition to represent non-professional employees at FVE Managers' Five Star Premier Residences of Yonkers, an assisted and independent living facility. The employer challenged several aspects of the proposed bargaining unit.
The first dispute concerned Licensed Practical Nurses (LPNs). The employer argued LPNs were both supervisors and professional employees. The Regional Director found LPNs were neither. The evidence showed LPNs lacked genuine supervisory authority - they didn't evaluate other employees, couldn't take corrective action, and weren't held accountable for others' work. Regarding professional status, their 1-2 year educational program and routine duties didn't meet the Act's requirements for "professional employees."
The second dispute involved whether certain employees should be excluded as business office clericals. The Regional Director found Concierges should be included in the unit because they worked in public areas, had frequent contact with other employees, and didn't perform typical business office functions like billing or Medicare processing. Similarly, Sales Counselors and Associates were included because they primarily conducted facility tours rather than clerical work.
The Regional Director also analyzed whether Lifestyle360 Program Associates shared a sufficient community of interest with other employees to be included. These employees plan resident activities and work closely with Resident Assistants and other staff. While they have distinct duties, their functional integration and frequent contact with other employees supported inclusion.
The Regional Director directed an election in a wall-to-wall unit of non-professional employees. The manual election will be held on January 9, 2025, with two voting sessions. Employees employed as of December 20, 2024 will be eligible to vote. The employer must post election notices and provide a voter list by December 27, 2024.
Significant Cases Cited
Oakwood Healthcare, Inc., 348 NLRB 686 (2006): Authority to assign or responsibly direct employees requires independent judgment, and accountability for the direction provided must be demonstrated.
Hillhaven Convalescent Center of Delray Beach, 318 NLRB 1017 (1995): LPNs with one-year accredited nursing programs and state licenses are considered technical, not professional employees.
Lincoln Park Nursing and Convalescent Home, 318 NLRB 1160 (1995): Receptionists and clericals without distinct business office functions are included in non-professional units.
Airco, Inc., 273 NLRB 348 (1984): Wall-to-wall units are presumptively appropriate, and the burden is on the employer to demonstrate otherwise.