Individual employee non-competes struck for failure to bargain with the workers’ union
Unionized employers may not implement unilateral changes to wages, hours and working conditions without first providing the union notice and an opportunity to bargain. A union is not required to bargain.
In a previous post this blog summarized a Sixth Circuit case, Detroit Edison, that held an employer, who gave notice, was not required to negotiate with a union that merely griped about changes without actually requesting negotiations.
In this case, the company failed to give notice. Instead the company simply started requiring union-represented employees to sign a confidentiality agreement that contained non-competes, invention assignment language, non-interference language, and non-solicits as to both employees and customers. While this type of agreement is not, itself, unusual in the American workplace, unionized employers need to remember that unions are the exclusive bargaining agent of represented workers, so the company must give notice of changes to wages, hours and working conditions, and if negotiations are requested, negotiate over the changes with the union.
Worse, this agreement contained an at-will disclaimer. Again, an at-will disclaimer is common in the American workplace, but here it contradicted the “just cause” discharge clause that the union had bargained for in its collective bargaining agreement with the company.
The D.C. Circuit had no difficulty upholding the NLRB’s decision against the company.
Furthermore, the Court affirmed the Board’s holding that the non-solicits were themselves violative of NLRA rights (under section 7 of the NLRA). (Section 7 rights apply even to employees who are not represented by a union.) Under section 7, employees have the right to engage in protected concerted activity to further their wages, hours and working conditions. Doing so through a union is just one way they may exercise this right. Another is to solicit support from a company’s customers by way of a customer boycott. Here the customer non-solicit prohibited employees from “directly or indirectly” soliciting customers “to terminate or otherwise alter his, her or its relationship with the Company.” This aspect of the Court’s ruling appears highly controversial. It remains to be seen if other courts will interpret section 7 so broadly as to bar a customer non-solicit like this.
The case was Minteq International, Inc. v. NLRB, case no. 16-1276 (D.C. Cir. 4/28/17).