Tenth Circuit holds conflicting arbitration agreements mean no arbitration agreement

The company and a worker entered into six agreements, each of which contained an arbitration provision. While there was no doubt the parties intended to arbitrate any disputes between them covered by the agreements, the arbitration provisions were not identical. They differed in their details.

The agreements contain conflicting arbitration provisions. See Aplt. App. 167–87. Suffice it to say the conflicts involve (1) which rules will govern, (2) how the arbitrator will be selected, (3) the notice required to arbitrate, and (4) who would be entitled to attorneys’ fees and on what showing.

The Tenth Circuit held those differences were “irreconcilable” and as such established that there had been no meeting of the minds. Worse, as is often in contracts, there was no clause saying which agreement would control over the others in the event of a conflict. Accordingly the Court refused to compel arbitration.

The decision reminds parties to review all their agreements and to keep the terms of their arbitration provisions, in particular, consistent.

The case was Ragab v. Howard, case no. 15-1444 (10th Cir. 11/21/16).

Tenth Circuit confirms employees may “double file” EEOC charges

An employee filed an EEOC charge in 2009 for sexual harassment, but did not sue when he received his administrative right to sue. Instead, he continued to work, then filed another charge in 2011. When he sued for sexual harassment after the second charge, the employer challenged his claim as timely. The trial court held that he could not include in his claim any events preceding 300 days (the applicable statute of limitations) prior to the 2011 charge, in other words, all of the 2009 charge’s allegations (and potentially a period thereafter into 2010). The Tenth Circuit reversed. The Tenth Circuit said that, under the Supreme Court’s 2001 decision, Nat’l R.R. Passenger Corp. v. Morgan, any events constituting the “the same actionable hostile work environment practice” are admissible in the lawsuit, irrespective of whether they occurred before the 2011 charge’s time period. In other words, a plaintiff is allowed to “double file” EEOC charges for the same conduct.

In so ruling, the court noted its 2005 precedent in Duncan v. City and County of Denver, outlining the relevant factors to determine if events do or do not constitute part of “the same actionable hostile work environment practice” under Morgan: They must be “related by type, frequency, and perpetrator” without any “intervening action by the employer” that might break the relationship.

The case is Hansen v. SkyWest Airlines, 844 F.3d 914 (10th Cir. 2016).


SCOTUS grants review in Masterpiece Cakeshop case

In a case that pits religious freedoms against anti-discrimination laws, the Supreme Court agreed today to hear the appeal of a Colorado case against a baker that refused to sell a wedding cake to a same-sex couple.  Hear me (Bill Berger) discussing this development on 850 KOA moments after the order.

Source: 062617zor_8759.pdf

Quid Pro Quo and Hostile Work Environment, both, just sexual harassment, by a different name

Federal and state law prohibit sexual harassment. The courts have articulate two common types of sexual harassment: quid pro quo (where someone is asked to provide sex in exchange for a job benefit or punished on the job for not providing sex) and hostile work environment (where someone is subjected to “severe or pervasive” mistreatment because of their sex/gender). Whatever the kind of civil rights violation, a complaint of sexual harassment must first be lodged with the EEOC (or appropriate state agency) before a lawsuit can be filed.

In this case, the employee filed a the required administrative charge of sexual harassment but described only a hostile work environment, then when he later sued, he added quid pro quo allegations. The trial court held it was too late; he should have done so in his administrative charge. The Tenth Circuit disagreed holding that, under Title VII’s charge requirement and under federal pleadings standards, the employee’s allegations of sexual harassment were sufficient to put the employer on notice of any kind of sexual harassment, whether quid pro quo or hostile work environment. The court explained that quid pro quo and hostile work environment are just two different examples of sexual harassment.

The case was Jones v. Needham, case no. 16-6156 (10th Cir. 5/12/17).

Tenth Circuit restates summary judgment test with extensive discussion of multiple ADA and general employment law doctrines

The Tenth Circuit restated the test for granting summary judgment in favor of employers, and in doing so extensively discussed multiple doctrines frequently raised in such motions, including the honest belief doctrine, the adequacy of an employer’s investigation and the reasonableness of requested accommodations. With the regard to the last doctrine, the court noted that, as a matter of law, when workers advise their employers of a disability and request an accommodation after they have engaged in workplace misconduct, it is not a reasonable accommodation to ask that such misconduct be excused due to their disability. The court cited its 2004 precedent, Davila v. Quest Corp., Inc., for the proposition that “excusing workplace misconduct to provide a fresh start/second chance to an employee whose disability could be offered as an after-the-fact excuse is not a required accommodation under the ADA.” The Court concluded that “a denied request for retroactive leniency cannot support an accommodation claim.”

The case was DeWitt v. Southwestern Bell Telephone Co., 845 F.3d 1299 (10th Cir. 2017).


Looking for an update on non-compete law?

The law governing non-competes varies from state to state, and new legislation has brought the federal government into the mix. A recent article provides a helpful overview of the changing legal landscape covering these litigious covenants. Topics include,

  • An overview of new legislation in multiple states;
  • A look at recent court decisions including on the following topics:
    • Blue-penciling, aka judicial modification of a contract, such as a Nevada decision, Golden Road Motor Inc., Inc. v. Islam, 376 P.3d 151 (2016) (Nevada courts decline to re-write non-compete agreements if a part is unlawful),
    • Consideration, specifically whether continued at-will employment constitutes valid consideration for a non-compete agreement, and
    • What employer interests, such as trade secrets, are sufficient to support non-compete agreements;
  • 2016’s Defend Trade Secrets Act (DTSA), the nation’s new federal law addressing these agreements.

As many articles have reminded employers, DTSA now requires employers to include a disclaimer that advises  employees who sign such agreements they may still complain to the government and cooperate in government investigations. (Note that is a simple summary of DTSA, but specific requirements should be met in the language of that disclaimer.) The penalties for not including a DTSA disclaimer include limitations on remedies, such as the inabilty to obtain attorney fees and punitive damages. Employers should consult with legal counsel about DTSA and whether to include a disclaimer in current and future agreements.

Source: Beyond the Red-Blue Divide: An Overview of Current Trends in State Non-Compete Law : Publications : The Federalist Society

IRS outlines strict rules for PEOs that handle federal employment tax withholdings, reporting and payment for companies

PEOs (Professional Employer Organizations have become an attractive alternative for many companies to administering their own payroll and benefits systems. Many PEOs also handle routine HR functions. The PEO effectively hires the company’s workers and becomes their employer of record.

The IRS has issued a new set of rules that tighten up on a PEO’s ability to become and stay certified (a “CPEO,” Certified Professional Employer Organization).

Companies utilizing PEOs should consider requiring, as part of their contract with the PEO, that the PEO be and remain a CPEO.

The IRS guidance is Revenue Procedure 2017-14.

Employer’s investigation held reasonable under FCRA by Tenth Circuit

The FCRA (Fair Credit Reporting Act) is the federal law that governs background checks. Employers of DOT-covered drivers must run and participate in a background checking program.

In this case, the company had reported the plaintiff for an “Unsatisfactory Safety Record” because, while driving for the company, a speed monitoring device had reported him as driving at least 4 miles over the speed limit in a 7-day period, for which the company had issued him a “Serious Warning.” With that entry on his record, when the driver later applied to another company, his application was rejected because of that report. Accordingly he requested, pursuant to his FCRA rights, that the company re-investigate the matter and clear his record. The company reviewed its records and refused to clear the entry. The driver sued and demanded a jury trial.

The Tenth Circuit joined the First, Seventh and Ninth Circuits in holding that a jury trial is not automatically required to determine the reasonableness of every re-investigation. The Tenth Circuit then held that an investigation could be reasonable if the company did no more than “rely on its own records.” The company was not required to go back and review the original speed monitoring device’s logs. “(T)he scope of a reasonable investigation turns on the information about the dispute that the furnisher has received.”

(A)n investigation does not have to be exhaustive to be reasonable; (the company) may balance the costs and benefits of engaging in additional procedures.

The case was Maiteki v. Marten Transport Ltd., 828 F. 3d 1272 (10th Cir. 2016).

Tenth Circuit reaffirms Honest Belief doctrine

EEO (equal employment opportunity) laws prohibit discrimination on the basis of race, age, gender, etc., but they do not generally require special treatment. Employers are entitled to make business judgments, and sometimes those judgments involve subjective decisions about whether an employee is adequately performing or likely to adequate perform. Employees in a protected class fail to prove a case of discrimination if all they do is challenge the employer’s business judgment. When an employer has provided a legitimate business reason for its decision to take an adverse employment action (termination, demotion, etc.) against an employee, the question is not whether that reason was right or even persuasive, rather, the employee must prove that decision occurred “because of” their race, etc.

In this case, the employer made two adverse decisions about the plaintiff, a female university psychologist and training director: It demoted her, and it decided not to reinstate her. She challenged the veracity and adequacy of the employer’s reasons. Her employer countered that it “honestly and in good faith believed” its reasons, which included its belief that there was “upheaval among her students” and “upheaval among her supervisees.”

The Tenth Circuit rejected her claims, holding her proof inadequate. According to the Tenth Circuit, she failed to show the employer’s reasons “were dishonest or made in bad faith” or “so incoherent, weak, inconsistent, or contradictory that a rational factfinder could conclude they are unworthy of belief.” In other words, whether the employer’s reasons were right wasn’t the issue, only whether it honestly believed them. In rejecting her claims, the Court also noted that the timing of her first protected activity — a complaint letter submitted by her lawyer — was after the employer’s initial decision. The Court noted that an employer cannot retaliate against something that hasn’t yet happened.

(The employer) could not retaliate for (plaintiff’s) protected activity until she had engaged in such activity.

The decision is a strong reinforcement of the Honest Belief doctrine.

Source: Hiatt v. Colo. Seminary, — F.3d —., No. 16-1159, 2017 BL 185948, 130 FEP Cases 253 (10th Cir. June 02, 2017)

Eighth Circuit holds purchaser liable for seller’s WARN violation

WARN is the federal law that, when applicable, requires 60-day notice before a plant closing or mass layoff. When terminations occur as part of the sale of a business, WARN provides that sellers are responsible for WARN compliance up to and including closing, purchasers thereafter. It is not uncommon for asset purchase agreements to flesh out that general rule.

In this case, the asset purchase agreement unambiguously confirmed that general rule. It even included language excluding liabilities for WARN and expressly providing that purchaser did not assume any WARN liability.

Seller terminated employment of individuals, not hired by purchaser, without giving the 60-day notice. Citing WARN’s general rule and the purchase agreements, the purchaser moved to be dropped from the case, but the Eighth Circuit disagreed. The court held that, generally, a buyer in an asset purchase agreement can buy the assets without being liable for the seller’s violation of WARN, but the Eighth Circuit drew a line between an asset purchase agreement that is “merely a sale of assets” versus the sale of assets that is really — in the mind of the Eighth Circuit — the sale of the business “as a going concern.” The court held that this purchaser had bought the assets as a way of buying the business “as a going concern” and therefore was responsible for seller’s WARN violation.

Celadon’s liability turns on whether the APA (asset purchase agreement) constituted a sale of assets or a sale of a business as a going concern.

Purchaser emphasized the clear language in its purchase agreement, but the court held that language had at best a “binding effect as between (purchaser) and (seller)” but “the protections that the WARN Act affords employees are not determined by contract.” In other words, the purchaser could not contract its way out of statutory liability for seller’s WARN violation.

Next purchaser argued that it hadn’t really bought the business as a “going concern.” It noted it had not either acquired seller’s accounts receivable or required an automatic transfer of seller’s employees. The court held those distinctions were not sufficient.

The Eighth Circuit’s decision is surprising to many. It remains to be seen if it will be followed by other courts.

It may also be limited to one particular, relatively unusual fact noted by the Eighth Circuit. The agreement required the seller’s workers “to remain employed for 14 days following the date of the sale.” Thus, the Court held that it was purchaser who “as the statutory employer, not (seller), caused the employment loss” “at the expiration of this 14-day period.”

The case is a reminder to purchasers to consider WARN when engaged in asset purchase agreements.

The case was Day v. Celadon Trucking Servs., 827 F.3d 817 (7/15/16).

DOL withdraws its 2015-16 guidance regarding joint employment and independent contractors

On June 6, 2017, the DOL withdrew its 2015-16 guidances regarding joint employment and independent contractors. In doing so, the DOL cautioned, “Removal of the administrator interpretations does not change the legal responsibilities of employers under the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act, as reflected in the department’s long-standing regulations and case law.” The impact of this withdrawal is not, therefore, clear. While not a change to the blackletter law of independent contractor analysis, this may signal a lessening of DOL’s desire to apply that law strictly.

Source: DOL News Release (6/6/17)

NLRB overruled by D.C. Circuit

The D.C. Circuit overruled the NLRB in a case involving a broad range of issues, including Weingarten rights, retaliation, surveillance and coercion.

The court’s analysis began with the Weingarten issue. Weingarten is a case that held a union-represented employee may demand a representative be present at any interview where the employee anticipates discipline may follow. Weingarten allows an employer three options in response to such a demand: (1) grant the request and permit the representative to be present then hold the interview, (2) cease the interview or (3) permit the employee to choose between ceasing the interview or proceeding without a representative. The third option allows an employee to choose to continue the interview if he thinks that what he has to say will be helpful to himself, or to waive the interview entirely and thereby allow the employer to make decisions without the benefit of his information. In this case, when the employee requested a Weingarten representative, the employer attempted to find the representative, even asking HR for help finding the rep. When they could not find the representative, they gave the employee the third option, and he chose not to be interviewed. In this case, the D.C. Circuit held the company met its Weingarten obligations.

At that point, the company put the employee on paid leave pending investigation. The NLRB had held that doing so was retaliatory, but the D.C. Circuit — preserving for employers the important tool of being able to suspend pending investigation — reversed the Board, holding that doing so was not retaliation.

Thereafter, the employee dawdled in a work area before leaving. A supervisor observed him there and instructed him to leave. Here too the D.C. Circuit reversed the Board, holding that it was not an act of prohibited surveillance, but was rather a “routine” observation.

As the employee was told to leave, he was told to stop his discussion with a co-worker – a discussion that centered on the employee’s criticism of management. The D.C. Circuit reversed the Board here as well, holding this was not coercion of protected speech or protected conduct. “As noted above, given the circumstances in this case, it was perfectly reasonable for the Company to instruct (the employee) to leave the workplace pending investigation of his alleged wrongdoing.”

The case illustrates the importance of understanding Weingarten in unionized workforces. The Weingarten issue became the foundation for all of the Court’s analysis. The case also illustrates, in all workplaces, unionized or not, the proper use of suspensions pending investigation.

The case was Bellagio v. NLRB, ____ F.3d ___ (4/25/17).

Denver ordinance increases prevailing wages and penalties for contractors starting January 1, 2017

The Denver City Council passed an ordinance, effective January 1, 2017, increasing prevailing wage rates. Fines more than doubled, and the ability to impose debarment was enhanced. The ordinance extends, now, to contracts using City funds or City-owned or -leased lands, though, language was added to clarify that does not extend to most uses by way of license or permit. Under the new ordinance, the prevailing wage anniversary date will be the bid date, rather than the contract’s start date, which means prevailing wage increases will be triggered sooner each year.

The ordinance is Council Bill No. CB16-0985.


Plaintiff alleging disability discrimination in hiring case must prove he posseses the objective criteria required of the job

In this case a driver applied for but didn’t get a driving position with the defendant company. He claimed it was because of his disability, cancer, which was in remission. In fact he claimed to have pretty good evidence that his cancer was the reason: He said he’d asked and the company had told him, “Yes,” his cancer was the reason.

The company denied his claims and argued, before a jury was allowed to decide the evidence, his case should be dismissed on summary judgment because, even if true, he wasn’t qualified to do the job. The company pointed out two undisputed facts in its favor: (1) it required 3 years of mountain driving experience, (2) which the plaintiff did not have.

Both the trial court and the Tenth Circuit agreed with the company, holding that plaintiffs in disability-based hiring cases must prove they meet all objective qualification requirements, so long as those requirements are related to essential job functions. Without such evidence, his case was dismissed on summary judgment.

The case was Kilcrease v. Domenico Transp. Co., 828 F.3d 1214 (10th Cir. 1016).

Tags: ADA, disability, Tenth Circuit

In a split decision, NLRB stands by its rule requiring production of employee phone numbers

During President Obama’s administration, the NLRB adopted controversial new election rules. Depending on a speaker’s perspective, they are often called either the expedited election rules, the quickie election rules or the ambush election rules. No matter what one calls them, the new rules greatly accelerated the timeline for an election when a union files with the NLRB to represent a group of workers. One controversial aspect has been a requirement that the company produce phone numbers for its workers to the union, and in this case, the Board, in a 2-1 decision, affirmed that requirement, holding that even where the company does not have such a list, it must go so far as to compile the list for the union.

The dissent noted that it was impractical to think a company could even find the time in a 2-day window to survey its supervisors and do all that might be needed to compile phone numbers.

First, such a requirement is unrealistic given the 2-business-day time limit imposed by the Election Rule for the employer to transmit the eligible-voter list. According to my colleagues, employers like RHCG must contact each and every supervisor and require them to search their phones for employees’ personal phone numbers (and, under the Election Rule, their personal email addresses as well)going back 2 years … and to transmit this information to management officials who, in turn, must aggregate this data for inclusion in mandatory disclosures that must be filed and served within 2 business days after the Regional Director issues the decision and direction of election or approves an election agreement. In addition, and at the same time, RHCG was required to manually search 24 months’ worth of sign-in sheets to identify … eligible voters …. In my view, it is unreasonable for the Board to conclude that employees’ personal phone numbers are “available” and must be disclosed under the Election Rule under any circumstances, but especially under circumstances such as these.

The issue, indeed the entirety of the new election rules, is likely to be a hot topic for consideration by the NLRB under the Trump Administration.

Source: RHCG Safety Corp., 365 N.L.R.B. No. 88 (6/8/17).

Church-affiliated hospitals score major win in ERISA case

Churches may establish benefits plans exempt from ERISA (the Employee Retirement Income Security Act) (the nation’s leading benefits law). The statutory text limits this exemption to plan that are “established and maintained” by a church. Does this exemption also apply to benefits plans established and maintained by a hospital associated with a church?

That question has been working its way through the courts, with decisions landing on both sides of the issue. The uncertainty was so great that it is estimated recent settlements by hospitals tallied approximately $750-million in payments and further that the total amount at-issue in pension plans — given the differing requirements for ERISA-covered versus ERISA-exempt plans — approaches $4-billion.

The Supreme Court ruled that hospitals’ plans may qualify for this exemption even if the hospital is not itself a church, so long as the hospital is maintained and established by an entity “the principal purpose . . . of which is the administration or funding of [such] plan . . . for the employees of a church . . ., if such organization is controlled by or associated with a church,” aka a “principal-purpose” organization (colloquially, the hospital is religiously affiliated).

Source: Advocate Health Care Network v. Stapleton, case no. 16-74, 16-86, and 16-258 (U.S. June 05, 2017).

Allegedly condescending use of “she” in reference to plaintiff held sufficient to support triable claim of gender discrimination

Discrimination and harassment claims are often supported by a constellation of evidence designed to show that the employer’s proffered legitimate business reason for discipline or discharge was in fact a pretext for discrimination. In this case, the First Circuit held a supervisor’s use of “she” in a condescending tone to refer to the plaintiff was, along with other evidence, sufficient to warrant a trial, because a “speaker’s meaning may depend on various factors including context, inflection, tone of voice.”

Here, a meeting attendee, SFAM Ouellette, stated in an affidavit that Johnson “made frequent references to the way `she’ was doing things. He emphasized the word `she.'” SFAM Ouellette opined that he “felt it was a condescending way to speak about her and picked up on [Johnson’s] disdain for her and for [Ouellette] when [he] defended her.” SFAM Ouellette’s observations about Johnson’s tone are based on his perception as a seasoned manager on what he had just observed, not mere speculation.

The case was Burns v. Johnson, 829 F.3d 1 (1st Cir. 7/11/16).


Sixth Circuit joins the “robust debate” regarding enforceability of arbitration agreements, class actions and section 7 of the NLRA

The Sixth Circuit joined what it understatedly called a “robust debate” regarding the enforceability of mandatory pre-dispute arbitration agreements that do not permit class actions. The courts are split. The NLRB takes the position that such agreements violate section 7 of the National Labor Relations Act, the nation’s leading labor (union-related) law. Section 7 is a section of the NLRA that applies to both unionized and non-unionized employers. It permits employees to work together to further their wages, hours and working conditions. The NLRB takes the position, and the Sixth Circuit here agreed, that class action litigation is itself one form of protected activity under Section 7, in other words, that it is itself one way that two or more employees can work together to further their wages, hours or working conditions.

The Sixth Circuit summarized the current state of the split between the courts, as follows:

Whether federal law permits employers to require individual arbitration of employees’ employment-related claims is a question of first impression in this circuit; however, at least four other circuits have recently considered this question. See Morris v. Ernst & Young, LLP, 834 F.3d 975 , 985-86 (9th Cir. 2016) (holding arbitration provisions mandating individual arbitration of employment-related claims violate the NLRA and fall within the FAA’s saving clause); Lewis v. Epic Sys. Corp., 823 F.3d 1147 ,1160 (7th Cir. 2016) (same); Murphy Oil USA, Inc. v. NLRB, 808 F.3d 1013 , 1018 (5th Cir. 2015) (upholding its earlier holding in D.R. Horton, Inc. v. NLRB, 737 F.3d 344 (5th Cir. 2013), that arbitration provisions mandating individual arbitration of employment-related claims do not violate the NLRA and are enforceable under the FAA); Cellular Sales of Mo., LLC v. NLRB, 824 F.3d 772 , 776 (8th Cir. 2016) (upholding its earlier holding in Owen v. Bristol Care, Inc., 702 F.3d 1050 (8th Cir. 2013), that arbitration provisions mandating individual arbitration of employment-related claims do not violate the NLRA).4 The California Supreme Court also recently considered this question. See Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal. 4th 348 , 173 Cal. Rptr. 3d 289 , 327 P.3d 129 , 141-43 (Cal. 2014) (holding that arbitration provisions banning class-action litigation or collective arbitration of employment-related claims are enforceable under the NLRA and the FAA’s saving clause, but also holding that arbitration provisions banning representative claims under California’s Private Attorneys General Act violates that Act). There were dissenting opinions in three of these cases. See Morris, 834 F.3d at 990 (Ikuta, J., dissenting); D.R. Horton, 737 F.3d at 364 (Graves, J., dissenting in part); Iskanian, 327 P.3d at 159 (Werdegar, J., dissenting in part). Although this question is one of first impression in this circuit, there is already a robust debate about the enforceability of arbitration provisions like the one at issue in this case.

With so many decisions, split so decisively, the issue is sure to require Supreme Court resolution, and fortunately the Supreme Court agreed to take three of the cases: Murphy OilEpic Systems and Ernst & Young. Opening briefs are due a few days after this post (by 6/9/17), with a decision hopefully to follow by end of year or early 2018.

Source: NLRB v. Alternative Entertainment, Inc., — F.3d —, case no. 16-1385 (6th Cir. 5/26/17)

Colorado Supreme Court adopts Iqbal-Twombly pleading standard

Under the federal and state rules of civil procedure, are not required to provide much specificity in their pleadings. Indeed the oft-cited rule is that they must simply give “notice” of their claims. This notice pleading rule was tightened in a pair of 2007 U.S. Supreme Court cases, called Iqbal and Twombly. The Iqbal-Twombly standard continues to impose a notice requirement but explains that, in order to give sufficient notice, a plaintiff must plead enough specific facts to raise their claims “above the speculative level,” such that, if the specifically pled facts are true, he would be entitled to relief under “a plausible claim.” This new notice pleading requirement is often called the “plausibility standard.” State supreme courts are free to decide their own rules of procedure. In this case, the Colorado Supreme Court adopted Iqbal-Twombly’s plausibilty standard.

The case is Warne v. Hall, 2016 CO 50 (Colo. 6/27/16).

Ninth Circuit reaffirms broad view of enforceability of EEOC subpoenas

The Ninth Circuit reaffirmed its broad approach to the enforceability of EEOC subpoenas in a case where the employer had already produced sufficient information to analyze the company’s practice at-issue. Although the company pointed out the EEOC did not require the information to perform the desired statistical analysis of its “physical capability strength test,” the EEOC nonetheless insisted on obtaining “‘pedigree information’ (name, Social Security number, last known address, and telephone number) for employees or prospective employees who took the test” (parenthetical in original). Even the trial court agreed with the company holding that the information was not necessary and quashing the subpoena accordingly. The Ninth Circuit nonetheless reversed, explaining the test was not necessity but relevance.

The EEOC’s need for the evidence—or lack thereof—simply does not factor into the relevance determination.

The case is a reminder to employers that the courts can take a wide-eyed approach to EEOC subpoenas.

Source: EEOC v. McLane Co., Inc., — F.3d —, case no. 13-15126 (9th Cir. 5/24/17)

Second Circuit OK’s profanity in the workplace

In a controversial case, the Second Circuit affirmed the NLRB’s decision that profanity – profanity any reasonable employer would arguably not permit in its workplace – must be permitted in the workplace. This stunning decision was rendered under Section 7 of the National Labor Relations Act, which is a section of that law that applies to non-union as well as unionized employers. Section 7 permits employees to engage in speech to further their wages, hours and working conditions.

In this case, the speech was designed to solicit support for a union in its organizing campaign. An employee felt his supervisor spoke to him harshly, so, on a break at work, he used his phone to post on Facebook text that included saying that supervisor “is such a NASTY MOTHER F*CKER don’t know how to talk to people!!!!!! F*ck his mother and his entire f*cking family!!!! What a LOSER!!!! Vote YES for the UNION!!!!!!!” (Asterisks added.) What most employers and management-side counsel would find so striking about this language is its combination of purely gratuitous profanity – the graphic cursing adds nothing to the message’s content – but its attack on the supervisor’s mother and “entire” family. Still, when the employee was discharged, and a charge filed at the NLRB, the Board and now the Second Circuit held against the company,

How could both the Second Circuit and the NLRB find this language not only acceptable but legally protected? One unusual fact in the case is perhaps significant and may limit this decision to this particular workplace: The court said that there was “widespread profanity in the workplace, including the words ‘f*ck’ and ‘mother*cker,’ among other expletives and racial slurs.” (Asterisks added.)

Because the profanity occurred in social media, the Second Circuit reiterated the NLRB’s multi-factor test for social media postings:

The “totality of the circumstances” test for evaluating an employee’s use of social media may consider the following factors: (1) any evidence of antiunion hostility; (2) whether the conduct was provoked; (3) whether the conduct was impulsive or deliberate; (4) the location of the conduct; (5) the subject matter of the conduct; (6) the nature of the content; (7) whether the employer considered similar content to be offensive; (8) whether the employer maintained a specific rule prohibiting the content at issue; and (9) whether the discipline imposed was typical for similar violations or proportionate to the offense. Pier Sixty, LLC, 2015 WL 1457688, at *3.

The Second Circuit’s conclusion suggests this case is limited to its unique facts, making it the “outer-bounds” (as the Second Circuit, itself, called the decision) of this seemingly already stretched reading of Section 7. The court described its own decisions, as follows:

In sum, Pier Sixty has failed to meet its burden of showing that Perez’s behavior was so egregious as to lose the protection of the NLRA under the Board’s “totality‐of‐the‐circumstances” test.   However, we note that this case seems to us to sit at the outer‐bounds of protected, union‐related comments, and any test for evaluating “opprobrious conduct” must be sufficiently sensitive to employers’ legitimate disciplinary interests, as we have previously cautioned.50 We have considered all of Pier Sixty’s objections to enforcement and have found them to be without merit.

The case was NLRB v. Pier Sixty, LLC (2nd Cir. 4/21/17).