Wyche at Work: August 2014 Employment Update

Prepared by Wyche attorney Ted Gentry
August 2014

Handbook Series: Communication System Policies and the Blurred Line between Personal Space and the Workplace

In a previous edition of Wyche at Work’s handbook series, we highlighted a difficult question facing many employers today: where does the workplace end and an employee’s personal life begin? This boundary is easily transgressed when employers have to manage issues such as social media and bring your own device (BYOD) policies. This month we will focus on communications system policies, which can further blur the lines between working life and life outside of work.

Employers routinely provide employees with access to a wide range of communications equipment to use while at the workplace or for work-related purposes. For example, providing employees with e-mail and internet systems, laptops, tablets, computers or smartphones and/or otherwise allowing employees to access company information and perform company business on their own devices can increase productivity and communication while at the office, in the field, or at home.

There are obvious costs with such choices. In addition to the hard cost of acquiring, maintaining and distributing company equipment, providing employees with company equipment may:

  • increase the likelihood that employees, either purposefully or accidentally, access, disseminate or misappropriate sensitive company information, including confidential information and trade secrets;
  • make it easier for employees to harass fellow employees by using company computer equipment and networks to send derogatory or inappropriate comments about or explicit pictures to a co-worker;
  • increase the cost of discovery and “relevant information” in subsequent litigation;
  • decrease productivity as employees spend company time and resources to access non-work-related sites while on company time; and
  • lead to overtime and other compensation liability when “work” is done during “non-work” hours for non-exempt employees.

Employers need to address the usage and ownership of company networks and communications systems with well-crafted policies. Such policies should, at a minimum, include provisions:

  • prohibiting employee misconduct (including sexual harassment and discrimination) while using company equipment;
  • limiting the amount of time or proscribing appropriate times during which employees can use company equipment for non-work related activity;
  • reminding employees not to distribute sensitive information to third parties;
  • requiring data encryption or password protection in order to log in or access company information;
  • reserving the right of the company to monitor employee activity on company equipment;
  • authorizing the company to wipe data from devices in which company business is transacted when equipment is lost or the employee is terminated;
  • obligating employees to notify the company when equipment containing company information is lost, stolen or compromised; and
  • affirming clearly that employees have no right or expectation of privacy while using company equipment.

Well-crafted policies should avoid overbreadth, which can decrease morale, run afoul of the National Labor Relations Act, or potentially violate employees’ privacy rights. Do not hesitate to contact Wyche for assistance in establishing, reviewing, or implementing your company equipment policy.

National Labor Relations Board Update

NLRB Broadens Its Reach as It Takes Steps to Expand the Definition of Joint Employer

In a recent brief press release, the NLRB announced that the McDonald’s corporation will be named as a joint employer in all pending cases involving its franchisees. This press release could have tremendous consequences for McDonald’s and other employers across the country because of (i) the responsibilities of joint employers under the National Labor Relations Act, and (ii) the NLRB’s attempts to expand the definition of joint employer.

Under the National Labor Relations Act, an employer will be both (i) held liable for another entity’s violations of the NLRA, and (ii) obligated to collectively bargain with that entity’s unionized employees if the two parties are found to be joint employers.  Currently, the NLRB will find that two or more parties are joint employers if they share or co-determine employees’ essential terms and conditions of employment.  Put another way, joint employers each have the authority to or exercise the right to hire, fire, discipline, supervise, and/or direct the same group of employees.

Because of the narrow meaning of joint employers under the current definition, many if not most franchisors did not have to worry about being categorized as joint employers until recently. However, in a May 13, 2014 press release, the NLRB signaled its intent to revisit the current definition as it asked interested parties to submit briefs on whether or not to change the definition.  The General Counsel for the NLRB, not surprisingly, attempted to expand the definition of joint employer to include any entities demonstrating an economically dependent relationship such that a joint employer relationship could be assumed.  The NLRB has not yet decided, through case law or otherwise, whether or not to retain or expand the definition of joint employer.

Despite the fact that the NLRB has yet to make a decision, the McDonald’s press release does send a strong signal that the joint employer definition could be expanded soon.  If this is the case, many employers around the country could be affected.  Franchisors as well as companies with employees retained or leased through third parties may soon find themselves facing unfair labor practice charges based on their franchisees and/or third-party employee staffing/leasing companies’ behavior.

Stay tuned for Wyche at Work for updates on the NLRB’s stance on joint employers.

Two NLRB Decisions Remind Employers What Not to Do

In previous editions of Wyche at Work, we have discussed the NLRB’s increasing influence on the non-unionized workplace. Moreover, we’ve highlighted the NLRB’s increased insistence on transforming seemingly innocuous and conventional employer policies to unlawfully restrict employees’ right to discuss the terms and conditions of employment. In our March 2014 employment update, however, we highlighted a decision which seemingly reversed this trend. This month we will focus on two recent cases that suggest that the NLRB is again aggressively enforcing the NLRA.

  • Fresh & Easy Neighborhood Market, 361 NLRB 8 (2014). Fresh & Easy involved an employer policy which required employees to “keep customer and employee information secure” and reminded employees that “information must be used fairly, lawfully, and only for the purpose for which it was obtained”. The NLRB found that this language could reasonably be read to prohibit employees from exercising their NLRA-protected rights. More specifically, the NLRB found that the policy could be read to “prohibit discussion and dissemination of information about other employees, such as wages and terms and conditions of employment”. In doing so, the NLRB noted that the policy was overbroad and may have been lawful had it been limited to discussions of confidential information, sensitive intellectual property right matters, and/or trade secrets. As a result of the violation of the NLRA, the Board ordered the employer to stop using the policy and place a NLRB form notice in the workplace for sixty days to alert employees to their NLRA rights and the employer’s violations of those rights.
  • Hitachi Capital America Corp., 361 NLRB 19 (2014). Hitachi dealt with a seemingly innocuous situation: an employer dealing with severe weather. In order to safely deal with severe weather, Hitachi instructed its employees to arrive at 11:00 a.m. for work instead of the usual 7:30 a.m. start time. A couple of employees, however, chose to arrive and begin to work at 7:30 a.m. Hitachi, per a newly adopted policy, only compensated those employees for the time spent working after 9:00 a.m. One of the employees complained about the policy in a series of emails, and, at one point, sent an email to HR stating “I am not here to work for free, and to take risks to come to work for nothing.” Hitachi found that the complaint contained language that violated a company policy prohibiting “inappropriate behavior while on company property.” Accordingly, Hitachi formally warned the employee that her behavior violated company policy and could lead to termination if repeated in the future. After the employee reacted poorly to being reprimanded, Hitachi decided to terminate her employment. The NLRB found that the employee’s email complaints were NLRA-protected activity and that Hitachi terminated her for exerting her NLRA-protected rights. The NLRB also noted that Hitachi’s policy was applied in a way that prohibited NLRA-protected rights. Accordingly, the NLRB ordered Hitachi to reinstate the discharged employee with backpay, stop using the policy, and place a NLRB form notice in the workplace for sixty days to alert employees of their NLRA rights and Hitachi’s violations of those rights.

As these cases show, the NLRB routinely strikes down seemingly straight-forward policies as unlawful restrictions of employees’ rights.  Please let us know if we can help you draft, review, and implement NLRA-compliant workplace policies.

On the Road with Wyche at Work:  Agencies Join Forces to Improve Anti-Retaliation Provisions

On the Road with Wyche at Work reports that the Federal Motor Carrier Safety Administration (“FMCSA”) and the Occupational Safety and Health Administration (“OSHA”) have signed a Memorandum of Understanding (“MOU”) “to facilitate coordination and cooperation” between the two agencies concerning the anti-retaliation and anti-coercion provisions of the Surface Transportation Assistance Act (“STAA”).  In addition, the MOU will facilitate the exchange of information when safety and health allegations received by one agency are under the authority of the other agency.

The MOU provides that when an individual notifies FMCSA of alleged retaliation because the individual engaged in certain activity protected by the STAA, the FMCSA shall inform the individual that a personal remedy for retaliation is available through OSHA.  In turn, OSHA agrees to notify FMCSA of all complaints filed alleging retaliation under the STAA. The agencies will also exchange annual reports summarizing STAA complaints.

This latest joint effort continues a trend among federal agencies.  As we reported earlier, the National Labor Relations Board (“NLRB”) and OSHA formed a cooperative effort to exchange information and refer whistleblower claims between the two agencies. In addition, the NLRB and Department of Justice announced an agreement to coordinate efforts on employment-related claims that fall under the authority of each agency.

Reminders for Upcoming Deadlines

Applications for Training Program Funds are Due September 15.  The State Workforce Investment Board, tasked with creating a competitive workforce advantage for South Carolina, has made Incumbent Worker Training (“IWT”) program funds available statewide.  Each local Workforce Investment Board will receive a portion of monies allocated for the statewide program; the Greenville County Workforce Investment Board received around $78,400 for this application round.  The IWT program provides funding for training needed due to expansion, new technology, retooling, new services/product lines and new organization structuring or as part of a layoff avoidance strategy.  If interested in applying, you will find guidelines, application forms and other information on the GCWIB website.  The deadline to apply is 3 p.m. on September 15, 2014.

EEO-1 Reports are Due September 30.  It is time for our yearly reminder that employers who are required to file the Employer Information Report EEO-1 must do so by September 30, 2014.  The 2014 EEO-1 Survey website has updated FAQs and forms, as well as important notices for first-time and returning filers.  If you are not sure if your company is required to file the EEO-1, or if you have questions regarding the data to be reported, please let us know.

If you have any questions about these or other workplace law topics, please contact Ted Gentry.

This update is provided by Wyche for educational and informational purposes only and is not intended and should not be construed as legal advice.

Picture of J. Theodore (Ted) Gentry

J. Theodore (Ted) Gentry

Ted Gentry focuses his practice on counseling colleges and universities and on appellate litigation. Ted’s career handling complex litigation gives him valuable insights into the ways that today’s decisions affect tomorrow’s disputes.

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