Wednesday, October 10, 2007

NLRB Allows Employers to Enjoy Fruit from Their Poisonous Tree

Nlrb_2 Another day, another couple of 3-2 decisions limiting employees' ability to enforce their rights under the NLRA.  The first is Anheuser-Busch Inc., 351 N.L.R.B. No. 40 (Sept. 29, 2007), which involved an employer’s unlawful surveillance of its employees (unlawful because they did not bargain over it). That surveillance turned up activity, including drug use, that resulted in termination and discipline for certain workers. The Board had earlier refused to provide make-whole relief to the employees. The D.C. Circuit reversed because the Board failed to justify its move away from earlier precedent and remanded the case, leaving the possibility open that the Board could come to the same conclusion. It now has, based in large part on its interpretation of Section 10(c):

 Section 10(c) [] prohibits a make-whole remedy where discipline is “for cause.”  In its initial decision in this case, the Board cited Section 10(c) as support for its denial of a make-whole remedy.  However, as the [D.C. Circuit] observed, Section 10(c) does not “expressly address” the circumstances in the instant case – that is, “where an employer would not have discovered its employees’ misconduct but-for its own unlawful action.” The court was not persuaded by the Board’s reliance on Section 10(c).  We now articulate the rationale that the court found missing in our earlier decision. . . .

 

Under Weingarten, an employer violates the Act if it conducts an investigatory interview after denying the interviewed employee’s request for the assistance of a union representative. Notwithstanding that fact, both the Board and reviewing courts consistently have held that Section 10(c) precludes the Board from granting a make-whole remedy to employees disciplined for misconduct uncovered through an unlawfully-conducted investigatory interview.  See Taracorp Industries. . . .

 

We recognize that the Board, in its initial decision herein, cited Taracorp in support of its denial of a make-whole remedy, and that the court distinguished Taracorp on the basis that the employer in that case had a separate and untainted source of information regarding the employee’s misconduct. The dissent contends that Taracorp and other Weingarten cases are distinguishable from the instant case because in those cases, the employer suspected the employee’s misconduct prior to conducting the disciplinary interview.  However, the Taracorp Board’s holding did not turn on the presence of an untainted source. Indeed, the Taracorp decision does not even refer to the untainted information source, and instead relies heavily on Section 10(c)’s prohibition against making whole employees who have been discharged for cause.

The dissent responds:

 

Today, the majority overrules Board precedent and holds that an employer that disciplines employees based solely on information obtained in violation of Section 8(a)(5) need not make those employees whole.  The majority reaches that conclusion by: (1) relying on a reading of Section 10(c) that a reviewing court has rejected as a matter of law, (2) advancing policy arguments at odds with the Act, and (3) relying on a line of cases that has no appropriate application here.  We dissent. The employees here, whom the Respondent disciplined based solely on its unquestionably unlawful use of hidden surveillance cameras, are entitled to make-whole relief. . . .

 

It is well settled that the Board’s authority under Section 10(c) is broad and discretionary.  In exercising its authority, the Board is guided by the principle that remedial orders should “restor[e] the situation, as nearly as possible, to that which would have obtained but for [the unfair labor practice].” Die Supply Corp. “Effective redress for a statutory wrong should both compensate the party wronged and withhold from the wrongdoer the ‘fruits of its violations.’” International Union of Electrical Radio and Machine Workers v. NLRB. . . .

 

Even if the [D.C. Circuit] had not already rejected the argument that Section 10(c) bars a make-whole remedy, the majority’s 10(c) argument would not withstand scrutiny. The majority contends that the legislative history of Section 10(c) shows an intent to insure that employees who engaged in misconduct would be subject to discipline for it.  That is true, insofar as it involves 8(a)(1) and (3) cases in which the Board must determine whether an employee was disciplined because of Section 7 activity. But the legislative history gives no indication that it was intended to preclude make-whole relief in the circumstances present here, where the discipline was the direct result of a 8(a)(5) violation without which the employer would have had no grounds for discipline.

 Just to reiterate: this is not like the Title VII after-acquired evidence situation (Nashville Banner) where an employer commits an unlawful adverse employment action then later, by lawful means, finds evidence justifying discharge. Rather, this case is allowing an employer to violate the NLRA and use any evidence obtained during that unlawful action to preclude relief. It provides further encouragement for employers to engage in unlawful surveillance activity, as there is now a potential pay-off in digging up evidence that would warrant disciplining or terminating employees they wanted to punish. Admittedly, the employees’ conduct here was bad. However, the employer could have easily avoided the initial ULP and investigate suspicions of drug use by simply talking to the union. Moreover, this case could get into trouble before the D.C. Circuit, as the majority’s treatment of Taracorp. appears to conflict with the D.C. Circuit’s earlier holding. We’ll see what happens on appeal.

 

-JH

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Comments

The two sides appear to be talking past one another. Each has a valid concern ignored by the other. Giving back pay to employees fired for using illegal drugs at work makes no sense, but a simple cease-and-desist letter isn't an adequate remedy for the failure to bargain. Imposing fines for some NLRA violations would provide a more effective sanction while not rewarding employees who were properly disciplined.

Posted by: Dennis Nolan | Oct 11, 2007 5:27:06 AM

This may be a first, but I agree with Dennis on this one--at least were there is no evidence that the employer wasn't unlawfully using surveillance to try to retaliate against union activity.

Posted by: Jeff Hirsch | Oct 11, 2007 6:38:41 AM

Jeff is right -- my comment refers to this case where the only problem with the surveillance is that the company failed to bargain about the cameras.

I'm not as sure about the other problem, illegal conduct caught by illegal anti-union surveillance, but even there I think a fine would be a better remedy than back pay. This isn't a criminal law issue, after all, so there's no bar to using the fruits of the poisoned tree, but there still should be some meaningful sanction for the surveillance itself.

In either case, 10(c) should bar back pay. Regardless how the illegal conduct was discovered, it constitutes "cause" for discharge.

Posted by: Dennis Nolan | Oct 11, 2007 7:37:16 AM

How many dissents in the past couple of weeks begin, "The majority has overturned [40 years', long-established, etc.] precedent. . . ."? See also Dana/Metaldyne and St. George Warehouse.

Posted by: Joseph Slater | Oct 11, 2007 7:55:53 AM

A lot, Joe, but the only unusual thing is that many of them are coming in one burst at the end of the fiscal year. The Eisenhower Board changed at least as many precedents; so did the Kennedy Board when it took over, and the first Reagan Board too. The Clinton Board also reversed a lot of the Reagan Board precedents (although not as many as I had expected; I attribute that to Bill Gould's independent frame of mind).

Posted by: Dennis Nolan | Oct 11, 2007 10:18:08 AM

But I think the difference here is that many of these decisions simply don't pass the straight face test. As a former Board field attorney I was always able to figure out what I was supposed to do in response to the "typical" political decision that would arise. Many of the most recent decisions, on the other hand, seem to fly in the face of "40 years of precedent." In so many instances now I would be left wondering what the law was (or even whether any law remained). As is often the case with blatantly political "law", however, unintended consequences are likely to ensue because the political gauntlet has been thrown down and all illusion of law has been removed.

And, by the way, I would have no trouble ordering the reinstatement of an employee whose violation of drug policy had been uncovered by unlawful means. In my view the proper approach would be to apply a very "tight" burden shifting approach in those situations - require the ER to demonstrate that it had discharged employees previously for very similar infractions: none of that "It's so bad they shouldn't have to show anything." In many cases the drug free nature of these workplaces is the purest fantasy - if you randomly tested every employee in "the house" you'd need a new "meter" after about 10 minutes.

Posted by: Michael Duff | Oct 12, 2007 9:03:38 AM

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