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Labor Board’s Power Challenged in Offensive Speech Case

Nov. 26, 2019, 11:10 AM

The federal labor board doesn’t have the authority to overturn three Obama-era decisions on offensive workplace speech when it decides whether General Motors unlawfully disciplined a worker after outbursts against a manager, unions argued in briefs to the board.

The National Labor Relations Board invited public briefing in its consideration of when profane, racist, or sexist language loses the protection of federal labor law. The board signaled that it could strike down rulings involving scenarios not at issue in the General Motors case—including in speech in social media posts and on a picket line—and establish a legal framework that’s applicable to multiple situations.

The NLRB can set broad rules through formal notice-and-comment rulemaking, the AFL-CIO, American Federation of Teachers, and National Nurses United said in separate briefs filed earlier this month. Doing so in an individual case ruling wouldn’t meet its legal duties under administrative law and would result in an improper advisory opinion, they said.

Organized labor’s concern that the Republican-controlled NLRB might exceed its authority in the General Motors case underscores the potential breadth of its pending decision. The board’s consideration of offensive speech comes as it’s moving on two fronts to remake federal labor law.

The NLRB is advancing an ambitious regulatory agenda that includes efforts to develop regulations for joint employer liability, access to employer property, union elections, and the employment status of student assistants. That represents a break from the board’s traditional approach of using individual case decisions to interpret the National Labor Relations Act and develop rules of the road for labor-management relations.

The board during the Trump administration has also acted aggressively through case adjudication. In its 2017 decision in Boeing, for example, the Republican majority created a new framework for evaluating employer policies and handbook provisions that law judges and the board have been fleshing out through a series of rulings. Member Lauren McFerran, now the board’s only Democrat, said in her Boeing dissent that the decision was a “secret rulemaking in the guise of adjudication” and an “abuse of the administrative process.”

The Trump NLRB isn’t the first board to spark concerns about the breadth of its rulings. For example, the Obama NLRB said in its 2010 decision in Carpenters Local 1506 that a union was allowed to display a banner at a secondary employer’s location that attempted to warn customers away from that business. A Republican board member dissented, saying the majority didn’t limit its ruling to the facts presented in the case and used it as an opportunity to narrow the definition of picketing.

In the board’s Sept. 5 invitation to file briefs in General Motors, the board’s GOP majority said it has discretion on whether to address issues through case adjudication or rulemaking. The case involves a workplace encounter and not picket-line or online conduct, but the majority said it’s considering whether different standards should apply when deciding if offensive speech loses the protection of the NLRA.

An NLRB spokesman declined to comment further.

The Law on Offensive Speech

The NLRB currently uses a four-part test from its 1979 ruling in Atlantic Steel to determine whether workers are protected by labor law when they use offensive language. The board analyzes harsh speech that occurs on picket lines—which can be more confrontational than normal workplace settings—under its 1984 ruling in Clear Pine Mouldings.

Offensive speech presents difficulties under workplace laws, as it can be unclear whether it’s activity protected by the NLRA or workplace harassment that violates Title VII of the 1964 Civil Rights Act. The Equal Employment Opportunity Commission filed a brief in General Motors saying the NLRB should consider adopting a standard that lets employers address the use of offensive language, including with discipline as appropriate.

As part of its consideration, the board is weighing its rulings in Plaza Auto Center, which involved a profanity-laced outburst against a manager; Pier Sixty, which focused on a profane Facebook post attacking a supervisor; and Cooper Tire & Rubber, which centered on racist insults directed at replacement workers during a labor dispute.

“What the board is doing is conflating these cases because they want to exploit the inflammatory nature of racially offensive and profane speech to change the law on what should be protected speech,” said Mark Gaston Pearce, the Democrat who led the NLRB when it decided those three cases.

Unions that filed briefs in General Motors said the board’s existing legal framework effectively protects workers given the heightened emotions that can occur during labor disputes while respecting employers’ obligations under anti-discrimination laws.

But business groups filed briefs supporting an overhaul of the NLRB’s framework for offensive speech to protect employers from Title VII liability and allow them to maintain workplaces free of harassment and violence. The Society for Human Resource Management, for example, urged the NLRB to set a “bright-line rule” that workers lose NLRA protection for any use of racial or sexual language. The board should overturn any decision contrary to such a rule, the group said.

NLRB Authority

The U.S. Supreme Court said the choice between rulemaking and case adjudication falls within the board’s discretion in its 1974 decision in NLRB v. Bell Aerospace. But there could be situations in which adjudication instead of rulemaking would be an abuse of discretion in violation of the Administrative Procedure Act, the high court said.

Creating a broad rule that applies to offensive speech regardless of setting runs afoul of the APA, the unions said in their brief.

The only case that it could arguably consider alongside General Motors would be Plaza Auto Center, because they both involve language a worker used during a meeting with a supervisor that was subject to the Atlantic Steel standard, the AFL-CIO said.

Considering other factual scenarios is improper because the board hasn’t given interested parties enough notice of what it intends to do, so they have no chance to develop the evidentiary record, National Nurses United said. The union pointed to a 1960 decision by the U.S. Court of Appeals for the Sixth Circuit that the NLRB couldn’t establish a rule by adjudication because it hadn’t provided timely notice.

A ruling in General Motors that strikes down other cases would be vulnerable to an APA challenge if the board is cursory and merely claims to expressly overrule them, said Hiba Hafiz, a Boston College professor who focuses on labor and administrative law.

“On judicial review, a court would study the record, including the public brief submissions, and take a ‘hard look’ at whether the agency engaged in reasoned decision-making based on that record,” Hafiz said via email.

Holding v. Dicta

The NLRB generally has the power to announce new rules in individual decisions, even if that involves overruling other cases that weren’t before it, said Aaron Saiger, an administrative law professor at Fordham University.

The part of an opinion that affects the case at hand would be the legally binding holding, while the discussion of other cases—including any that were purportedly overturned—would be nonbinding commentary known as dicta, Saiger said. The dicta would represent the current board’s view of what the law should be, he said.

Yet the distinction between a holding and dicta has an “air of unreality” because the NLRB isn’t bound by either—it can overturn its own holdings, Saiger said.

The NLRB is infamous for flip-flopping on labor law depending on what political party holds the board majority, with Democrats generally favoring unions and Republicans siding with employers.

With a presidential election on the horizon, the NLRB majority might feel more compelled to address a wider array of issues with dicta, said Steven Bernstein, an attorney at the management-side firm Fisher & Phillips.

Regardless, dicta can be welcome guidance for how the board interprets the law, Bernstein said.

“Whether we represent employers or unions,” he said, “the more clarity we have, the better counselors we can be.”

To contact the reporter on this story: Robert Iafolla in Washington at riafolla@bloomberglaw.com

To contact the editors responsible for this story: Karl Hardy at khardy@bloomberglaw.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com