Nlra Update

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NLRA Update

By Jeff Bosley

Jeffrey S. Bosley is a partner in the Labor and Employment Department of Davis Wright Tremaine LLP, and represents employers and management in labor and employment law matters. He can be reached by email at jeffbosley@dwt.com.

Regional Director Finds College Football Players Receiving Grant-in-Aid Scholarships Are University Employees

Northwestern Univ. and College Athletes Players Ass’n (CAPA), Case No. 13-RC-121359 (Mar. 26, 2014)

On March 26, 2014, Peter Sung Ohr, Regional Director of Region 13 of the National Labor Relations Board (Board), issued a decision and direction of election concerning scholarship football players at Northwestern University (Northwestern, or the Employer). Specifically, Regional Director Ohr ordered that an election be conducted in the following bargaining unit:

Eligible to vote are all football players receiving football grant-in-aid scholarships and not having exhausted their playing eligibility employed by the Employer located at 1501 Central Street, Evanston, Illinois, but excluding office clerical employees and guards, professional employees and supervisors as defined in the Act.

Northwestern is a private, nonprofit university. Northwestern consists of three campuses, including one located in Evanston, Illinois. It maintains an intercollegiate athletic program and is a member of the National Collegiate Athletic Association (NCAA). Northwestern is also a member of the Big Ten Conference, and its students compete against 11 member schools and non-conference opponents in various sports, including football.

The Regional Director found that the football team is comprised of about 112 players, of which 85 players receive grant-in-aid scholarships that pay for tuition, fees, room, board, and books. Since the 2012-13 academic year, Northwestern has offered its football players four-year scholarships, with an option for a fifth year. Athletes who accept a scholarship offer sign both a National Letter of Intent and an offer referred to as a "tender." The tender explains the scholarship can be reduced or cancelled for specified reasons, but not due to athletic ability or injury. Players on scholarship typically receive grant-in-aid tuition totaling $61,000 each academic year. No FICA taxes are withheld from scholarship monies, nor do athletes receive a W-2 tax form from Northwestern.

The Regional Director found that football players were subjected to special rules developed by the team and athletic department that were different from rules applied to students generally. These rules included strict drug and alcohol policies, and a requirement to sign a release permitting Northwestern and the Big Ten Conference to utilize their name, likeness, and image for any purpose. Players regularly spent 50 to 60 hours per week on football-related activities during training camp each summer, and 40 to 50 hours per week on football-related activities during the team’s fall season. This time included travel to and from scheduled games, practices, weight lifting, physical therapy, and medical treatment. In addition to mandated workouts, the Regional Director found that team members regularly held 7-on-7 drills and engaged in other voluntary activities outside the presence of coaches. A substantial number of hours considered football-related by the Regional Director were not considered "countable athletically related activities" or "CARA" under NCAA guidelines. However, the Regional Director found that this was because numerous activities required to participate on the team, including attending mandatory meetings, dining at the team’s "training table," medical check-ins, travel, and training tape review were not included as part of CARA. Also, the Regional Director compared voluntary conditioning to non-paid activities of an actor rehearsing lines or a musician practicing an instrument to improve his or her performance, and indicated these efforts made clear that scholarship players devoted the "bulk of their time and energy towards the football services they provided [Northwestern]."

The Regional Director found that the football team generated revenue for Northwestern in various ways, including ticket sales, television broadcast contracts, and the sale of football team merchandise. Northwestern reported to the Department of Education that its football team generated total revenues of $235 million and incurred total expenses of $159 million between 2003 and 2012. For the 2012 through 2013 academic year, Northwestern reported that its football program generated in excess of $30 million in revenue and incurred nearly $22 million in expenses. Profit realized from the football team’s annual revenue was utilized to subsidize the employer’s non-revenue generating sports. This revenue also assisted Northwestern in ensuring that it offered a proportionate number of men’s and women’s varsity sports in compliance with Title IX of the Education Amendments of 1972.

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The Regional Director determined that the players receiving scholarships to perform football-related services for Northwestern were "employees" as defined by the Act because they were under a contract for hire in return for compensation and were subject to Northwestern’s control. The Regional Director found that "walk-ons" were not employees under the Act. Contrary to scholarship athletes, the walk-ons did not receive compensation, nor did they sign a tender or otherwise enter into any type of employment contract. The Regional Director also found that walk-ons were allowed a greater amount of flexibility by football coaches concerning missing portions of practices and workouts during the football season if class schedules created a conflict. The Regional Director rejected Northwestern’s argument that excluding walk-ons from the unit would result in a fractured unit. Rather, he found that a fractured unit could not exist because the walk-ons were not employees under the Act.

Northwestern contended that the athletes were not statutory employees for the reasons articulated in Brown University, 342 NLRB 483 (2004). The Regional Director refused to find the Brown University decision controlling in this case. The Regional Director wrote that the Brown University test was inapplicable, "because players’ football-related duties are unrelated to their academic studies, unlike the graduate assistants [in Brown University] whose teaching and research duties were inextricably related to their graduate degree requirements[.]" The Regional Director also found, however, that even if the Brown University test was applied, his decision would not change. The Regional Director also rejected Northwestern’s argument that the athletes were temporary employees due to the finite nature of the relationship.

Finally, the Regional Director determined that the petitioning union, the College Athletes Players Association (CAPA), was a labor organization as defined by the National Labor Relations Act (Act). Because the scholarship football players were employees under the Act, and the unit sought was appropriate, the Regional Director directed an election. On April 24, 2014, the Board granted review of the Regional Director’s decision. While an election was held on April 25, 2014, the ballots from the election have been impounded (and will not be not counted) while the Board’s review is ongoing.

Board Finds Discipline for Mass Emails Violated the Act

California Inst. of Tech. Jet Propulsion Lab., 360 NLRB No. 63 (Mar. 12, 2014)

The Board adopted the findings of an Administrative Law Judge (ALJ) that the California Institute of Technology Jet Propulsion Laboratory (Caltech or JPL) unlawfully disciplined employees for sending mass emails regarding a Supreme Court decision affecting JPL’s employees.

On March 12, 2014, in response to exceptions filed by Caltech and the General Counsel, a three-member Board panel unanimously adopted the recommended order of ALJ William G. Kocol. The original charging parties were five of the twenty-eight JPL employees named plaintiffs in a class action challenging JPL’s background check procedures. Each of the employees was a senior scientist or engineer, including one who was the driver of the Mars rover. The background check requirements at issue were required by NASA for its contractors, including JPL. This process included a form that, according to the employees, required them to reveal "intimate details" of their private life, "including financial stability, sexual experience, and other morality judgments." In 2007, the employees filed a suit against NASA, the Department of Commerce, and others, and moved for a preliminary injunction preventing NASA from requiring them to complete the form by a deadline or be fired. The U.S. District Court denied the motion, but on appeal, the Ninth Circuit granted the injunction. On review, the Supreme Court reversed and remanded. NASA v. Nelson, 131 S. Ct. 746 (2011).

Following the Supreme Court’s decision, in January 2011, JPL’s Deputy Director sent an email announcing the decision to JPL employees and non-employees who work at the facility. In that email, JPL informed employees that they had an obligation to comply with the background checks in order to obtain a badge. In response, several of the plaintiffs from the lawsuit coordinated to send emails regarding their view of the impact of the case. Each of the five employees sent the same email, with variations, to employees in their division or work group through NASA’s computers and email systems. Some of the emails suggested that NASA could follow the approach of other federal agencies, like the U.S. Department of Energy, that did not require background checks of employees in low risk jobs. Some of the emails also accused the Solicitor General of providing false information to the Supreme Court during argument. The employees sent emails to over 7,000 recipients, including NASA managers and some other individuals outside the lab.

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In response to these emails, JPL issued warning letters to each of the employees in April 2011. The warnings asserted that the employees had misused computer and email systems by lobbying, making political statements, and spamming, in violation of JPL’s ethics and business conduct code.

The ALJ determined that the emails constituted concerted activity protected by § 7 of the Act. Recognizing that activity protected by § 7 can lose its protection under certain circumstances, the ALJ concluded that the emails maintained their protected nature. The ALJ also found that employees had been allowed to use email for other nonjob-related purposes, including selling Girl Scout Cookies and coupons for local restaurants. The ALJ found: "JPL has allowed use of its computers for a wide range of nonjob-related purposes, many of which were similar in kind, length, and scope of distribution as the messages sent by [the] five employees." For these reasons, the ALJ determined that the discipline violated § 8(a)(1) of the Act.

However, the ALJ also found that the policy under which the employees had been disciplined did not violate § 8(a)(1). The policy restricted employees from taking action that would "discredit" JPL. Relying on NLRB precedent that employees would not reasonably read the policy as forbidding activity protected by § 7, the ALJ found that the policy was lawful under the Act, and the Board agreed with this determination.

NLRB Denies Review of Regional Director’s Decision Finding Jurisdiction Over Charter School

The Pennsylvania Cyber Charter Sch., Case No. 06-RC-120811 (Apr. 9, 2014)

A split three-member panel denied review of the Regional Director’s decision to direct an election among the full-time and regular part-time virtual classroom instructors of The Pennsylvania Cyber Charter School. The School requested review, asserting that it was an exempt political subdivision under § 2(2) of the Act.

Under NLRB v. National Gas Util. Dist., 402 U.S. 600, 604-05 (1971), an entity is exempt if it is "either (1) created directly by the state, so as to constitute departments or administrative arms of the government, or (2) administered by individuals who are responsible to public officials or to the general electorate."

Members Hirozawa and Schiffer found that the Regional Director had correctly determined that no local or state official was involved in the selection or removal of any members of the School’s Board of Trustees, or in the hiring of the School’s staff, including its CEO. They further agreed that neither the School’s trustees nor its CEO were directly and personally accountable to any state or local public officials or to the general electorate.

The majority followed Chicago Mathematics & Science Academy, 359 NLRB No. 41 (2012), and concluded that these findings were dispositive of the School’s nonexempt status. The majority acknowledged, however, that there is not a "bright-line rule that the Board has jurisdiction over entities that operate charter schools, wherever they are located and regardless of the legal framework that governs their specific relationships with state and local governments."

Member Johnson dissented, stating that he would have granted review in order to develop the law on this issue and fully set forth the Board’s reasoning for asserting (or not asserting) jurisdiction. Johnson pointed to several facts which, in his view, supported a finding that the School may have been created by the state. Specifically, he referenced that the charter was originally granted by public officials, before any private entity was formed. He also pointed out that Pennsylvania law defines the School as a "public school"—an entity traditionally viewed as a political subdivision of the state. He noted that Pennsylvania classifies the School’s trustees as "public officials," and that the School can only exist if the charter is renewed by the Pennsylvania Secretary of Education.

Employer Violated Act by Disciplining Weingarten Representative and Requiring Employees to Sign Investigative Notes

Murtis Taylor Human Servs. Sys., 360 NLRB No. 66 (Mar. 25, 2014)

A three-member panel affirmed an ALJ’s rulings that Murtis Taylor Human Services Systems (Murtis Taylor) violated the Act by suspending a union delegate representing a fellow employee at an investigative interview and by requiring employees to sign notes from the interviews to attest to their veracity.

The case arose out of Murtis Taylor’s pre-disciplinary investigation into Medicaid billing and possible theft of time by a unit employee. Alton Hill served as the employee’s Weingarten representative at an interview on July 22, 2011. The company never informed Hill or the employee being investigated about the subjects of the investigation. During the course of the interview, Hill was confused about the reasons for the investigation and asked about the purpose of the questions, but the human resources representative only stated that they were investigating a "conflict of interest." Hill repeatedly asked for more information and stated that they would cooperate if it was provided. At various times, Hill advised the employee not to answer certain questions until Murtis Taylor provided clarification. Specifically, when the employee was asked whether or not she had another job, Hill said, "That’s none of his business what you do on your time." Hill used a loud voice during the interview. After the employee continued to refuse to say whether or not she had another employer, Murtis Taylor suspended her and she later resigned.

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On August 18, 2011, Murtis Taylor suspended Hill for ten days without pay, because he "obstructed an investigation by advising [the employee] to refuse to obey her supervisor’s orders to answer questions and cooperate with the investigation." Murtis Taylor’s representative testified that he intended to send Hill and the union "a message."

Applying the standard from Atlantic Steel Co., 245 NLRB 814 (1979), the ALJ found the suspension unlawful, because Hill’s conduct was not "so opprobrious or extreme as to lose the protection of the Act." Murtis Taylor contended that the ALJ erred in failing to define the limits of a Weingarten representative’s behavior more narrowly than when union representatives otherwise communicate with management, and that Hill had exceeded the limits and lost protection under the Act. The panel confirmed that serving as a Weingarten representative is protected activity and that assistance includes attempting to clarify issues being investigated and advising the employee not to answer questions. The panel further found that Hill did not impede the investigation, because Murtis Taylor was able to ask all of its questions and the employee could have answered if she had wanted. Because Hill’s conduct fell within the permissible bounds of a Weingarten representative and he was suspended for that conduct, the Board found that Murtis Taylor violated §§ 8(a)(1) and (3) of the Act by suspending him.

The second issue in the case involved Murtis Taylor’s requirement that an employee sign investigative interview notes to confirm their veracity. On March 12, 2012, Murtis Taylor’s Human Resource representative interviewed a unit employee, while other employees took notes. At the end of the interview, the representative told the interviewee to review the notes, make any necessary changes, and sign. The signature line included the following statement: "Refusal to acknowledge the veracity or to correct the statement in writing is equivalent to refusal to cooperate with the administrative investigation." The employee refused to sign the notes because he felt they were incomplete and inaccurate. Murtis Taylor suspended the employee until he signed the document. This was the first time that Murtis Taylor required an employee to attest to the veracity of investigative notes.

The ALJ found that Murtis Taylor violated §§ 8(a)(1) and (5) by implementing this requirement without bargaining. Murtis Taylor argued that the policy was permissible under the management-rights clause in the collective bargaining agreement, and that the union waived its right to bargain over this change. The Board, however, disagreed, and found that under the "clear and unmistakable waiver" standard, Murtis Taylor did not prove that the parties "unequivocally and specifically expressed their mutual intention to permit unilateral employer action with respect to a particular employment term." The Board, therefore, adopted the ALJ’s ruling that Murtis Taylor violated §§ 8(a)(1) and (5) by implementing the signature requirement.

Employer’s Policy Prohibiting "Negative Comments" and "Negativity" Violated the Act

Hills and Dales Gen. Hosp., 360 NRLB No. 70 (April 1, 2014)

Hills and Dales General Hospital (the Employer) is an acute care hospital located in Cass City, Michigan. At issue in this case was the facial validity of three paragraphs of the Employer’s Values and Standards of Behavior Policy (Standards). Specifically, paragraph 11 of the Standards stated that employees will not make "negative comments about our fellow team members," including coworkers and managers; paragraph 16 stated that employees will "represent [the Employer] in the community in a positive and professional manner in every opportunity"; and paragraph 21 stated that employees "will not engage in or listen to negativity or gossip." An ALJ found that paragraphs 11 and 21 violated § 8(a) (1) of the Act because employees would reasonably construe them to prohibit activity protected by § 7 of the Act. Although the ALJ found paragraph 16 did not violate the Act, two members disagreed and reversed the ALJ.

The Employer adopted the Standards in 2006 as part of an effort to change its culture. Among other measures, the Employer set up employee teams to address multiple issues, including standards and performance, employee recognition, continuous improvement, communication, and service. The standards and performance team developed a draft of the Standards, and then distributed the draft to all employees for review and comment. The Standards were adopted after several additional drafts had been circulated.

The Employer argued that the employees’ involvement in developing the Standards removed any impermissible ambiguity as to the meaning of the challenged paragraphs.

The Board disagreed, stating: "Employees might well endorse an unlawful rule, knowingly or not, but their consent or acquiescence cannot validate the rule." The Board further found that the record was unclear as to the extent of employee involvement in promulgating the Standards, and that there was no evidence that employees involved in creating the Standards were assured or reasonably believed that the final adopted versions would not interfere with the exercise of protected § 7 rights. The Board continued, "[n]or would the prior involvement of some employees have determined how other employees reasonably construed the rules, even if they were fully informed of the rules’ origins."

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The Board then affirmed the ALJ’s finding that the prohibition of "negative comments" and "negativity" in paragraphs 11 and 21 was unlawfully overbroad and ambiguous. The Board rejected the Employer’s argument that the Standards could not be found facially invalid in the absence of evidence of surrounding circumstances suggesting a linkage between the rules’ restrictions and protected concerted activity.

Contrary to the ALJ, a split panel found that paragraph 16’s requirement that employees "represent [the employer] in the community in a positive and professional manner" was also unlawfully overbroad and ambiguous. The majority wrote that paragraph 16 would be viewed as prohibiting employees from engaging in "any public activity or making any public statements (i.e., ‘in the community’) that are not perceived as ‘positive’ towards the respondent on work-related matters." The Board wrote that this would discourage employees from engaging in protected public protest of unfair labor practices, or from making statements to third parties protesting terms and conditions of employment because such activity may not be "positive" towards the employer.

Member Johnson dissented, and would not find that paragraph 16 was overbroad or ambiguous. He would have adopted the ALJ’s finding that paragraph 16 was lawful. Contrary to the majority, he found that there was no meaningful distinction between the rule requiring "positive and professional" behavior in this case, and the rule requiring "positive and ethical" behavior in Tradesmen Int’l, 338 NLRB 460 (2002). Although the majority argued that Tradesmen dealt with a conflict-of-interest provision, Member Johnson argued that in a hospital setting, the term "professional conduct" was appropriate.

Party’s Failure to Deliver Petition to Board Results in Transfer to Ninth Circuit

Remington Lodging & Hospitality, LLC v. NLRB, 747 F.3d 903 (D.C. Cir. 2014)

Remington Lodging and Hospitality, LLC (Employer) and UNITE HERE!, Local 878 (Union), both petitioned for review of the same Board order in different circuits. Recognizing that parties who are aggrieved by a single agency action might petition for review in different courts of appeals, Congress codified rules at 28 U.S.C. § 2112(a) for the consolidation of separate proceedings. Under 28 U.S.C. § 2112(a)(1)-(2), if within ten days of issuing an order, an agency "receives, from the persons instituting the proceedings," a petition for review that has been "stamped by the court with a date of filing," then the agency must file the relevant record in that court of appeals "notwithstanding the institution in any other court of appeals proceedings for review of that order[.]"

If within the ten-day period, the agency receives two or more court-and-date-stamped petitions relating to the same order filed in different courts of appeals then the Judicial Panel on Multi-District Litigation "shall, by means of random selection," designate in which court of appeals the agency must file the record. In either case, all other courts of appeals must then transfer related proceedings to the court in which the agency files the record.

The Union petitioned for review of the Board’s order in the Ninth Circuit; the Employer petitioned for review in the District of Columbia Circuit. The Union delivered a court-and-date-stamped copy of its petition to the Board within the ten-day period provided in § 2112(a). The Employer did not deliver a copy of its petition to the D.C. Circuit to the Board within that period. Instead, the clerk’s office submitted a notice to the Board under § 10(f) of the Act.

While the Board conceded that it received copies of both petitions within the ten-day period under § 2112(a), it disputed that the appeal was properly pending in the D.C. Circuit. Relying on the express language of 28 U.S.C. § 2112(a), the Board sought transfer of the appeal to the Ninth Circuit. A unanimous panel of the District of Columbia Circuit agreed. Judge Tatel wrote, "[c]ompliance with section 10(f) initiates judicial review of a Board order and notifies the Board that a petitioner seeks review. Compliance with section 2112(a) informs the Board that the petitioner seeks to take advantage of the optional procedure for preserving its choice of forum." The court continued, "[b]ecause every petitioner seeking review of a Board Order must comply with section 10(f), section 2112(a) can serve its separate notice function only if petitioners wishing to take advantage of that section’s forum selection procedure comply with it separately."

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1. 28 U.S.C. § 2112(a)(1),(3).

2. 28 U.S.C. § 2112(a)(5).