The NLRB's New Holding On Private Sector Free Speech (And What It Means For The Public Sector)

Last month, the National Labor Relations Board, the federal agency overseeing private sector labor relations, issued its much anticipated decision in Karl Knauz Motors, Inc dba Knauz BMW and Robert Becker ("Knauz BMW"). The Board held that the BMW dealership's "courtesy" rule, which among other things prohibited employees from making remarks that were "disrespectful" to the dealership, was an invalid restriction on what could constitute employee "concerted activities" for their "mutual aid or protection." Section 7 of the National Labor Relations Act ("NLRA") prohibits employers from improperly restricting such employee concerted activities, including employee speech and discussion that meets the statutory definition, i.e., that addresses qualifying workplace issues. As described below, Knauz BMW considers "concerted activities" in the rapidly developing context of social media.

The NLRA was passed in the midst of the Great Depression as part of Franklin D. Roosevelt's New Deal. The NLRA gave essentially all private sector workers in the country the right to have labor unions as their bargaining representatives and governed the bargaining relationship between unions and management. But the Act also gave some substantial protections to employees who worked in non-union environments. Section 7 of the Act gives private sector employees in general the right to engage in "concerted activities for the purpose of collective bargaining or other mutual aid or protection." Since its creation, Section 7 has provided employees with rights in some unique situations. In 1962, for example, in NLRB v. Washington Aluminum Co., the U.S. Supreme Court considered the case of employees in a Baltimore machine shop who had made the collective decision to walk off the job because, as one described, it was "too damned cold to work" in their facility. (The high that day was 22 degrees, the low was 11 degrees, and the facility's chief source of heating had broken.) There was testimony that part of the reason for the walk-out was to protest the conditions in the hope management would improve them. The Supreme Court concluded that the employees' spontaneous decision as a group to walk out constituted protected concerted activity under Section 7, so that the employer had acted in violation of the Act in subsequently firing them. The employer had to reinstate all the employees.

Courts have subsequently held that this "concerted activity" for "mutual aid or protection" extends not just to employee action, but to employee discussions and speech that relate to workplace issues within the scope of the statute. Section 7 thus creates a free speech right, of a limited sort, for private sector employees as against their employers. Its appearance over the decades in the non-unionized workplace has been sparse in the case law, possibly because the Section 7 rights cannot be asserted by trial lawyers in traditional court proceedings. Instead, they must be asserted through unfair labor practice charges instituted through the NLRB. Also, in workplaces without unions (which is much of the nation's private sector today), few employees know about these Section 7 rights.

In recent years, however, the NLRB has brought about a resurgence in this area of the law, targeting non-unionized workforces. First, the NLRB has made an effort to advise all private sector employees of their NLRA rights, by attempting to put in place a requirement that employers – even if non-unionized – put up posters advising employees of their NLRA rights. (Some federal courts found this poster requirement to be outside the scope of the NLRB's power, and the requirement has been stayed pending further judicial determination.)

In addition, the NLRB has aggressively enforced Section 7 in the new area of social media. Starting in the last several years, NLRB regional offices across the country have begun issuing complaints in response to unfair labor practice charges by employees who allege they were terminated for harsh, joking, or critical comments about their employers made on their Facebook pages or other social media sites. Our blog has covered these cases extensively. Examples of these cases are Hispanics United of Buffalo, which involved termination of employees who had posted on Facebook criticisms of workload and staffing decisions of their employer, and American Medical Response of Connecticut, Inc., in which an ambulance company employee was terminated for posting on Facebook vulgar and negative comments about her supervisor.

Knauz BMW was one of these early social media cases. It happens to be the first involving an actual firing based on social media posts to be heard by the full NLRB in Washington D.C. In Knauz BMW, a sales employee at a BMW dealership in Illinois, Robert Becker, posted on Facebook (1) remarks critical of his dealership's choice of food and beverage for an event to celebrate a new car line (hot dogs from a cart and 8-ounce water bottles), and (2) remarks and photographs that made light of an accident at a Land Rover dealership also owned by his employer, in which the underage son of a customer drove a vehicle into a pond. Management learned of these posts, and directed that the employee remove them, which he did. Several days later, according to the evidence in the administrative hearing, a manager called the employee into a meeting and tossed copies of the posts in front of him, asking him "What were you thinking?" The employee was subsequently terminated.

The NLRB's regional office issued a complaint on the ground that the dealership had infringed upon Becker's Section 7 rights. An administrative law judge at the Board conducted a hearing and concluded that the employee's comments on Facebook about the quality of food at the opening event did qualify as protected concerted activity under Section 7, because the quality of the event as a whole would have an effect on the sales commissions salespersons like Becker could earn. But the administrative law judge ultimately upheld the employee's termination, finding that the management had decided to terminate the employee based not on the comments about the food and beverage at the event but because of the photos and off-color jokes about the accident at the Land Rover dealership. The judge found that the speech on Facebook about the accident was not protected concerted activity.

On September 28, 2012, the full Board in Washington D.C. agreed with the administrative law judge and determined that the termination was lawful. What dominated the Board's decision, however, was not the termination but another issue the regional office had asked the administrative law judge to decide – whether provisions in the dealership's employee handbook were so broad that they in themselves operated to inhibit employees in their exercise of Section 7 rights, so that the provisions were unlawful. The administrate law judge had determined that the dealership's "Courtesy Rule," and a few other broad provisions, violated Section 7. The Courtesy Rule provided:

Courtesy is the responsibility of every employee. Everyone is expected to be courteous, polite and friendly to our customers, vendors and suppliers, as well as to their fellow employees. No one should be disrespectful or use profanity or any other language which injures the image or reputation of the Dealership.

The majority of the Board agreed with the administrative law judge. The Board described that prior precedent required that any workplace rule which "reasonably tends to chill employees in the exercise of their Section 7 rights" violates the NLRA. It found the BMW dealership's Courtesy Rule unlawful "because employees would reasonably construe its broad prohibition against ‘disrespectful' conduct and ‘language which injures the image or reputation of the Dealership' as encompassing Section 7 activity, such as employees' protected statements -- whether to coworkers, supervisors, managers, or third parties who deal with the Respondent -- that object to their working conditions and seek the support of others in improving them." The Board observed that nothing in the policy or handbook advised employees that Section 7 rights were excluded from this prohibition. The Board also observed that an employee reading the policy would "reasonably assume" an employee's statements of protest or criticism to be "disrespectful" or "injur[ious] to the reputation of the dealership" and thus prohibited by the Courtesy Rule.

A few weeks before the full Board decided Knauz BMW, it issued a decision that did not involve a termination, but that does provide guidance on private employee free speech on social media in light of Section 7. In Costco Wholesale Corp, on September 7, 2012, the Board held that Costco's social media policy prohibiting the posting of any statements that "damage Costco . . . defame any individual or damage any person's reputation" violated Section 7 by chilling employee's speech that could constitute protected concerted activity.

What do these NLRB decisions mean for the public sector? They are not binding on public sector employers, whose labor relations standards are instead governed by state law. In addition, the California laws governing public sector labor relations have different language on employee rights. Nevertheless, PERB and California courts interpreting these statutes often look to federal authorities for general guidance, and it is worthwhile for public sector employers to be vigilant of the private sector agency rulings and also to review employment policies that may affect employees' abilities to criticize their workplace, complain about pay or workplace safety issues, or complain about the operations of their agency.