June, 2017

Earlier this year, we blogged about the United States Supreme Court’s decision to consider whether requiring employees to agree to arbitration and a waiver of their rights to assert claims through class actions violated the National Labor Relations Act (NLRA). During the Obama administration, the U.S. Department of Justice supported the position of the National Labor Relations Board (NLRB) that requiring class action waivers as a condition of employment violated the NLRA. Now, the Justice Department has switched sides and is supporting business, acknowledging in an amicus brief filed with the Supreme Court on June 16 that “[a]fter the change in administration, . . . [it] reconsidered the issue and has reached the opposite conclusion.”

The cases being considered by the Supreme Court are National Labor Relations Board v. Murphy Oil USA, Case No. 16-307, Epic Systems Corp. v. Lewis, Case No. 16-285, and Ernst & Young LLP v. Morris, Case No. 16-300. The Supreme Court’s decision will directly affect violations of employment laws, like the Fair Labor Standards Act (FLSA) and Title VII of the Civil Rights Act of 1964, as amended. Oral argument in these cases is scheduled for October 2017.

Although courts of appeal are split on the issue, the Second Circuit Court of Appeals (which covers New York, Connecticut, and Vermont) has previously held that class action waivers do not violate the NLRA. As a result, such waivers are currently legal in New York, Connecticut and Vermont.

On June 1, 2017, the U.S. Court of Appeals for the Second Circuit, which covers Connecticut, New York and Vermont, upheld a National Labor Relations Board (NLRB) finding that Whole Foods Market Group, Inc.’s no-recording policy was overbroad and violated the National Labor Relations Act (NLRA).

In Whole Foods Market Group, Inc. v. NLRB, Whole Foods’ employee handbook contained a provision that prohibited employees from recording conversations, phone calls, and meetings, without first obtaining managerial approval. The court concluded that this no-recording policy violated the NLRA. The NLRA deems it an unfair labor practice “to interfere with, restrain or coerce employees in the exercise of their rights [to, among other things, engage in concerted activities for the purposes of collective bargaining or other mutual aid or protection.] Whole Foods insisted that its policy was not intended to interfere with employees’ rights to engage in concerted activity or to prevent them from discussing their jobs, and that it was merely a general prohibition against recording in the workplace. Whole Foods argued that its policy was “to promote employee communication in the workplace” by assuring employees that their remarks would not be recorded.

The Second Circuit found, however, that the seemingly neutral policy was overbroad and could “chill” an employee’s exercise of rights under the NLRA. In other words, the policy prohibited recording regardless of whether the recording involved an exercise of those rights. As a result, “’employees would reasonably construe the language to prohibit’ recording protected by [the NLRA].” Despite finding that Whole Foods’ policy violated the NLRA, the Second Circuit said that “[i]t should be possible to craft a policy that places some limits on recording audio and video in the work place that does not violate the [NLRA].” Such a policy might be acceptable if it was narrow in scope, and furthered a legitimate safety concern.

Articles Posted in June, 2017

Justice Department Switches Sides on Class Action Waivers

Employer No-Recording Policies May Violate NLRA Says the Second Circuit