Category: NLRB

Confidential Information

NLRB Allows Employers To Protect Certain Confidential Information

In recent years, the National Labor Relations Board has rejected many employer policies as restricting employees’ rights. This has included decisions related to protection of confidential information.

On August 14, 2017, the NLRB ruled in the employer’s (Macy’s) favor on a rule prohibiting disclosure of confidential information about customers obtained from the company’s confidential records. The Labor Board did not review other rules in the employer’s handbook that an administrative law judge had found to violate the National Labor Relations Act.

Macy’s Confidential Information Policy

Macy’s employee “Code of Conduct” included a lengthy “Confidential Information” policy.

In part, the Confidential Information policy provided:

Confidential information about our Company, its business, associates, customers and business partners should be protected. It can be used only to pursue the Company’s business interests or to comply with the Company’s legal or other obligations.

What is confidential information? It could be business or marketing plans, pricing strategies, financial performance before public disclosure, pending negotiations with business partners, information about employees, documents that show social security numbers or credit card numbers–in short, any information, which if known outside the Company could harm the Company or its business partners, customers or employees or allow someone to benefit from having this information before it is publicly known.

The policy goes on to prescribe rules for protecting confidential information, such as marking documents as confidential and shredding them when no longer needed.

Legal Issues

Section 7 of the National Labor Relations Act protects employees’ rights to engage in concerted activity for their mutual aid and protection. This includes the right of employees to collectively appeal to their employer’s customers in a labor dispute.

Employer rules that unreasonably “chill” employees’ exercise of their Section 7 rights are unlawful.

Two of the three NLRB members deciding this case agreed that Macy’s rules regarding confidential customer information did not violate Section 7. One member, former Chairman Mark Pearce, disagreed.

Notably, both Chairman Philip Miscimarra, a Republican, and Member Lauren McFerran, a Democrat, agreed on the majority decision. This marks an unusual alignment in employee rule decisions from the NLRB.

The majority emphasized the reference to social security and credit card numbers. No one contended that employees had a right to disclose that information. However, Member Pearce disagreed with its relevance in determining the lawfulness of the policy as a whole. He instead emphasized the broader reference to “any information, which if known outside the Company could harm the Company or its business partners.”

But the majority countered that the reference social security and credit card numbers along demonstrated the type of information that Macy’s intended to protect by its policy. They further relied on the inclusion of rules for preserving confidential information. In sum, they concluded that because the rule only protects information that is truly “confidential,” it does not unduly chill employees’ rights under Section 7.

Click here for the NLRB’s decision in Macy’s, Inc. 365 NLRB No. 116 (2017).

The Bigger Picture

This decision is important for many employers who maintain confidentiality policies. But it may be more significant in signaling a shift in Labor Board review of employee rules generally.

As previously discussed, the NLRB has recently added a fourth Member, Republican Marvin Kaplan. This brings the Board to a 2-2 split between Republicans and Democrats. And it will soon feature a 3-2 Republican majority for the first time in nearly a decade.

It was somewhat surprising that Democrats McFerran and Pearce split on their interpretation of Macy’s confidential information rule. This perhaps demonstrates how far Member Pearce’s extreme pro-employee views extend.

More important, Chairman Miscimarra’s footnotes in this decision reflect his disagreement with existing precedents on various employee-rule related issues. Although Chairman Miscimarra himself will be leaving the Board later this year, it is fair to assume the incoming Republican members will largely share his views. This will eventually lead to NLRB decisions that are less burdensome for employers.

Stay Tuned for More Labor Board Developments

NLRB decisions affect most private-sector employers in the United States. This includes both union and non-union workplaces. New decisions from a Republican-led Board may change the ways employers can manage their employees.

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NLRB Vacancy

Another NLRB Vacancy Coming Up

As discussed here, the U.S. Senate recently confirmed Marvin Kaplan to fill one of two vacancies on the National Labor Relations Board. There is still one current NLRB vacancy that labor attorney William Emanuel is likely to fill.

But that’s not the end of the labor board merry-go-round for President Trump’s first year in office. NLRB Chairman Philip Miscimarra’s term expires on December 16, 2017, and he has announced he will step aside at that time. This will create another opportunity for Trump to add another new Republican member to the Board.

Miscimarra indicated that he had been asked to stay for another term. However, he cited family reasons for choosing to leave the NLRB.

Miscimarra’s NLRB Tenure

Philip Miscimarra joined the Board on August 7, 2013, after nomination by then-President Obama and Senate confirmation. For virtually all of his time on the Board, Miscimarra was in the philosophical minority. He often issued dissenting opinions in significant cases decided by a Democratic majority.

Following President Trump’s inauguration, he named Miscimarra Acting Chair of the Board. Miscimarra was later named Chairman of the NLRB on April 24, 2017. Nonetheless, the Democrats retained the majority.

With Marvin Kaplan’s recent confirmation to fill one NLRB vacancy, Miscimarra will now lead a 2-2 split Board pending another confirmation. It is likely that the Senate will confirm William Emanuel after it’s August recess, finally giving Miscimarra a Republican majority for the last few months of his term.

Who Will Be the Next NLRB Chair?

When Trump took over as President, naming Miscimarra to be the Labor Board Chair was a no-brainer. He was the only Republican on the Board.

Now, however, the President will have options. Assuming Emanuel joins the Board before then, Trump could choose either him or Kaplan to Chair the NLRB. Alternatively, whoever replaces Miscimarra could be named Chair. Trump could even name Kaplan or Emanuel Acting Chair pending a confirmation of a new member to fill the NLRB vacancy Miscimarra’s departure will create.

About Miscimarra

Before joining the NLRB, Philip A. Miscimarra was a partner in Morgan Lewis & Bockius LLP‘s Chicago office. He was also a Senior Fellow in the Center for Human Resources at the University of Pennsylvania’s Wharton Business School.

Before joining Morgan Lewis in 2005, Miscimarra was a labor and employment attorney with Seyfarth Shaw LLP; Murphy Smith & Polk PC; and Reed Smith Shaw & McClay.

He received his Juris Doctor from the University of Pennsylvania Law School; a Masters in Business Administration from the University of Pennsylvania’s Wharton Business School; and a Bachelor of Arts degree, summa cum laude, from Duquesne University.

Who Will Fill the Next NLRB Vacancy?

It’s too early to guess specific names, but it’s safe to assume the nominee will be a pro-employer Republican attorney.

On one hand, the recently-confirmed Member Kaplan has relatively little experience as a practicing labor attorney. On the other hand, pending nominee Emanuel has spent approximately five decades in that role. Odds would seem to favor a third-Republican NLRB member with experience somewhere between those two.

It may also be worth noting that Secretary of Labor Alex Acosta is a former NLRB Member. As President Trump has already show a propensity to shuffle his highest level personnel, Acosta’s name might even end up on the list for a possible new NLRB Chair depending on how the next few months go in Washington.

 

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Marvin Kaplan Confirmed NLRB

Who’s New at the NLRB? Marvin Kaplan and More

On August 2, 2017, the U.S. Senate confirmed Marvin Kaplan as a new member of the National Labor Relations Board. Kaplan, a Republican attorney with a decade of federal government experience, fills an open seat on the 5-member NLRB.

With Kaplan’s confirmation, one seat remains vacant. President Trump has nominated longtime management-side labor attorney William Emanuel to fill that opening.

Marvin Kaplan’s Background

Marvin Kaplan received his Bachelor’s Degree from Cornell University and his law degree from Washington University in St. Louis. After law school, he worked briefly as an associate in the Kansas City law firm of McDowell Rice Smith & Buchanan.

Before joining the NLRB, Kaplan was legal counsel to the federal Occupational Safety and Health Review Commission. Before that, he served as workforce policy counsel for the U.S. House Committee on Education and the Workforce. He also served as counsel for the House Oversight and Government Reform Committee and the Office of Labor-Management Standards.

Opposition to Kaplan’s Appointment

The Senate confirmed Kaplan by a 50-48 party-line vote.

Democrats opposed Kaplan as anti-workers. Sen. Elizabeth Warren, D-Mass., claimed that, “As a House staffer he actively worked to strip workers of their rights.”

They also challenged his qualifications for the job of applying federal labor law. Sen. Patty Murray, D-Wash., offered, “And at his nomination hearing, Mr. Kaplan confused basic labor issues and decisions further proving he lacks the knowledge and experience to serve on this important board.”

On the whole pro-labor groups, including major labor unions, oppose Trump’s NLRB nominees. In a July 18, 2017 letter to the Senate, the AFL-CIO’s Government Affairs Department wrote:

“In recent years, some in Congress and in the business community have launched relentless attacks on the NLRB and sought to get key NLRB decisions and actions overturned. Kaplan and Emanuel have been part of these attacks, and they said nothing at the confirmation hearing to distance themselves from these attacks or suggest that they would bring a less hostile, and more pro-NLRA view to their work, should they be confirmed to the NLRB. Nor did either nominee make adequate commitments to recuse from cases and issues where there is real concern, based on their prior work and writings, that they have prejudged the issue and would not approach it with an open, unbiased mind.”

On the other hand, pro-business groups welcome Kaplan joining the Board. Glenn Spencer, Vice President of the U.S. Chamber of Commerce’s Workforce Freedom Initiative proclaimed, “Kaplan’s confirmation is certainly good news.”

Marvin Kaplan’s Expected Impact

There is every reason to believe that Marvin Kaplan will adhere to traditional Republican principles on key labor issues. This will ultimately lead to reversal of significant Obama-era NLRB decisions affecting millions of employers and employees. However, because the NLRB acts primarily by adjudicating actual cases, rather than rulemaking, the policy shifts will not be immediate.

The Senate will probably also confirm Republican William Emanuel after its August recess. That will give the Board a full 3-2 Republican majority. However, Richard Griffin, an Obama appointee, will continue as NLRB General Counsel until his term expires in November. Until then, he has some control over which cases are prosecuted and appealed within the agency. As a result, and considering the normal timeline of NLRB cases, we may not start seeing new decisions on major issues until 2018.

Who Will Be the Next NLRB General Counsel?

President Trump has not yet named anyone to replace Griffin as General Counsel. However, several names have surfaced as possible candidates.

G. Roger King, an apparent early front-runner for the position, has reportedly dropped out of consideration. King is a former Jones Day attorney, who now works for McGuiness & Yager LLP and the HR Policy Association.

As of August 3, 2017, Bloomberg BNA is reporting that Vermont attorney Peter B. Robb is now under consideration for the job. Robb practices labor and employment law with Downs Rachlin Martin PLLC. He served as chief counsel to NLRB Member Robert P. Hunter (R) in the 1980s.

Stay Tuned

The filling of these positions will likely have a significant impact on workplaces across the country.

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