Employment Law

U.S. Supreme Court Permits Narrow Review of EEOC Conciliation Process

Why it matters

The U.S. Supreme Court handed a victory—albeit limited—to employers when it determined that courts may consider the sufficiency of the Equal Employment Opportunity Commission’s (EEOC) conciliation efforts prior to bringing suit against an employer pursuant to Title VII of the Civil Rights Act. The unanimous Court acknowledged that the federal agency has discretion on “how to conduct conciliation efforts and when to end them,” but the justices in Mach Mining LLC v. EEOC said courts could still review the process. While the opinion, authored by Justice Elena Kagan, rejected the EEOC’s contention that its conciliation efforts were not subject to judicial oversight, the justices emphasized that the review was “narrow” and not the “deep dive” sought by the employer. Such limits on review are necessary in order to respect the EEOC’s discretion in enforcing the statute as well as the confidentiality imbued in the conciliation process, the Court said. Going forward, the EEOC can provide a sworn affidavit to the court to satisfy its conciliation obligations, the justices explained, but the inquiry may continue if an employer presents evidence that the Commission did not provide adequate information or failed to engage in conciliatory efforts. While employers can now argue in a lawsuit that the Commission’s conciliation attempts failed, the narrow review and the remedy set by the justices (a do-over on conciliation) keep the victory limited.

Detailed discussion

A woman filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC) claiming that Mach Mining LLC had refused to hire her as a coal miner because of her sex. After investigating the allegation, the agency found reasonable cause to believe that the employer discriminated against a class of women who applied for similar jobs.

The EEOC sent a letter to Mach Mining announcing its determination and inviting both the company and the complainant to participate in “informal methods” of dispute resolution, with a Commission representative to contact them to begin the conciliation process.

Roughly one year later, the EEOC sent a second letter to Mach Mining. This time, the agency stated that “such conciliation efforts as are required by law have occurred and have been unsuccessful,” calling any additional efforts “futile.” The EEOC then filed suit in Illinois federal court claiming Mach Mining engaged in sex discrimination. In its complaint, the Commission asserted that “[a]ll conditions precedent to the institution of this lawsuit ha[d] been fulfilled.”

Mach Mining disagreed, answering the complaint and arguing that the EEOC failed to conciliate in good faith. The agency moved to dismiss, informing the court that its conciliation efforts are not subject to judicial review.

The federal district court sided with Mach Mining but the Seventh Circuit Court of Appeals reversed. Noting a split among the circuits, Mach Mining filed a writ of certiorari, which the justices granted.

In a unanimous decision authored by Justice Elena Kagan, the justices reversed.

Title VII of the Civil Rights Act “sets out a detailed, multi-step procedure” for the Commission to enforce the statute, which begins when an employee files a charge of an unlawful workplace practice, the Court explained. If the agency finds reasonable cause—as it did in the Mach Mining case—it must “endeavor to eliminate [the] alleged unlawful employment practice by informal methods of conference, conciliation, and persuasion,” pursuant to Section 2000e-5(b).

The statute also provides the EEOC with a great deal of leeway and “the ultimate decision” to make a deal with an employer or file a lawsuit.

However, “this Court applies a ‘strong presumption’ favoring judicial review of administrative action,” Justice Kagan wrote, and the obligation to attempt conciliation of a discrimination charge prior to filing a lawsuit “is a key component of the statutory scheme,” serving “as a necessary precondition to filing a lawsuit.”

“Yes, the statute provides the EEOC with wide latitude over the conciliation process, and that feature becomes significant when we turn to defining the proper scope of judicial review,” the Court said. “But no, Congress has not left everything to the Commission.” Title VII provides “concrete standards” pertaining to what the conciliation efforts must entail, such as telling the employer about the claim and providing an opportunity to discuss the matter in an effort to achieve voluntary compliance.

Finding that nothing could overcome the presumption favoring judicial review of the EEOC’s administrative action, the justices then defined the scope of such oversight.

“The appropriate scope of review enforces the statute’s requirements,” the Court said, “that the EEOC afford the employer a chance to discuss and rectify a specified discriminatory practice—but goes no further. Such limited review respects the expansive discretion that Title VII gives to the EEOC over the conciliation process, while still ensuring that the Commission follows the law.”

Instead of adopting “the most minimalist form of review imaginable” as suggested by the EEOC or the “deep dive” recommended by Mach Mining, Justice Kagan landed the Court somewhere in between.

“The statute demands … that the EEOC communicate in some way (through ‘conference, conciliation, and persuasion’) about an ‘alleged unlawful employment practice’ in an ‘endeavor’ to achieve an employer’s voluntary compliance,” the Court wrote. “That means the EEOC must inform the employer about the specific allegation, as the Commission typically does in a letter announcing its determination of ‘reasonable cause.’ Such notice properly describes both what the employer has done and which employees (or what class of employees) have suffered as a result.”

The EEOC must also “try to engage the employer in some form of discussion (whether written or oral), so as to give the employer an opportunity to remedy the allegedly discriminatory practice,” the justices added.

This “relatively barebones review” ensures compliance with the statute and allows the EEOC to exercise all of its discretion on how to conduct conciliation efforts and when to end them, the Court said. It also honors the confidentiality of the conciliation process “because a court looks only to whether the EEOC attempted to confer about a charge, and not to what happened (i.e., statements made or positions taken) during those discussions.”

A sworn affidavit from the EEOC “stating that it has performed the obligations noted above but that its efforts have failed will usually suffice” to meet the conciliation requirement, Justice Kagan wrote. “If, however, the employer provides credible evidence of its own, in the form of an affidavit or otherwise, indicating that the EEOC did not provide the requisite information about the charge or attempt to engage in a discussion about conciliating the claim, a court must conduct the factfinding necessary to decide that limited dispute.”

As for a remedy, the Court stuck to conciliation. “Should the court find in favor of the employer, the appropriate remedy is to order the EEOC to undertake the mandated efforts to obtain voluntary compliance,” the justices said.

“Judicial review of administrative action is the norm in our legal system, and nothing in Title VII withdraws the courts’ authority to determine whether the EEOC has fulfilled its duty to attempt conciliation of claims,” the Court concluded. “But the scope of that review is narrow, reflecting the abundant discretion the law gives the EEOC to decide the kind and extent of discussions appropriate in a given case. In addressing a claim like Mach Mining’s, courts may not impinge on that latitude and on the Commission’s concomitant responsibility to eliminate unlawful workplace discrimination.”

To read the opinion in Mach Mining LLC v. EEOC, click here.

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Statement to Supervisor to “Stop” Harassment Satisfies Title VII

Why it matters

A statement to a supervisor to “stop” harassing conduct satisfies the requirements of Title VII of the Civil Rights Act, according to a panel of the Sixth Circuit Court of Appeals. In a suit brought by the Equal Employment Opportunity Commission (EEOC), a jury awarded $1.5 million to three female employees who alleged their supervisor sexually harassed them (as well as a male co-worker who objected to the unlawful conduct) and then retaliated against all four of them. The employer appealed. The employees could not recover because they did not engage in protected activity constituting opposition under the statute, the employer argued. But the federal appellate panel said all of the complainants verbally requested that the supervisor stop his behavior, satisfying the opposition clause of Title VII. “If an employee demands that his/her supervisor stop engaging in this unlawful practice—i.e., resists or confronts the supervisor’s unlawful harassment—the opposition clause’s broad language confers protection to this conduct,” the court wrote.

Detailed discussion

New Breed Logistics operated a warehouse in Memphis, Tenn. where James Calhoun worked as a supervisor in the receiving department. Under his supervision were three female employees: Jacquelyn Hines, Capricius Pearson, and Tiffany Pete, as well as Christopher Partee, a male forklift driver.

Each of the three women accused Calhoun of making sexually suggestive comments repeatedly, sometimes several times a day and sometimes accompanied by physical contact. At trial, Pete testified that she told Calhoun to “leave [her] alone” daily, while Pearson “ask[ed] him to stop talking dirty to me like he was” and Hines told Calhoun to “get the f#*k out of my face.” Partee, who witnessed and overheard the harassment, spoke to Calhoun and told him to “calm down on making them comments because I don’t believe them women was liking that.”

Pete made an anonymous call to New Breed’s complaint line and the company sent a human resources manager to investigate. She visited the facility and asked Calhoun five questions related to the allegations, and then determined no misconduct occurred.

All four employees were terminated from New Breed and each produced evidence at trial that Calhoun was directly or indirectly involved in each termination. A jury awarded the four employees more than $1.5 million in compensatory and punitive damages.

New Breed appealed, challenging the sufficiency of the evidence and arguing that it was entitled to judgment as a matter of law because none of the plaintiffs engaged in protected activity constituting opposition. The Sixth Circuit Court of Appeals disagreed and affirmed the jury’s verdict.

Section 2000e-3(a) of Title VII prohibits an employer from retaliating against an employee on two grounds, the court said: for “opposing any practice made an unlawful employment practice by this subchapter” or for an employee who “made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter.”

Each of the plaintiffs met the requirements of the first, so-called “opposition clause,” the panel held.

“[A] demand that a supervisor cease his/her harassing conduct constituted protected activity covered by Title VII,” the court concluded. “Sexual harassment is without question an ‘unlawful employment practice.’ If an employee demands that his/her supervisor stop engaging in this unlawful practice—i.e., resists or confronts the supervisor’s unlawful harassment—the opposition clause’s broad language confers protection to this conduct. Importantly, the language of the opposition clause does not specify to whom protected activity must be directed. Therefore, it would be unfair to read into the provision a requirement that a complainant only engages in protected activity when s/he opposes the harassment to a ‘particular official designated by the employer.’”

The federal appellate courts are split on this issue, the Sixth Circuit noted. Similar rulings can be found in the Seventh and Eighth Circuits, with contrary holdings in the Fifth Circuit and a federal district court in New York.

“Here, at the very least, all four complainants requested that Calhoun stop his sexually harassing behavior before their terminations,” the court wrote. “Consistent with our holding today, these complaints constitute protected activity.”

New Breed had knowledge of the protected activity, the panel added, because Calhoun either terminated the plaintiffs himself or became the driving force behind their terminations under a cat’s paw theory of liability. (This theory holds that an employer can be liable for discrimination or retaliation if the employer acts innocently but based on input from a biased employee.) But-for causation was similarly satisfied based not only on the temporal proximity to the plaintiffs’ terminations after their complaints but also on the jury’s findings that the employer’s proffered non-discriminatory reasons for termination were pretextual.

“Evidence was presented to show that Calhoun subjected Hines, Pete, and Pearson to sexual harassment and then, either directly or indirectly, engineered the terminations of all three women and Partee after they all complained about his harassment,” the panel wrote. New Breed only distributed its anti-harassment and anti-discrimination policies to permanent employees—just 20 percent of the workforce at the Tennessee facility—and the jury heard evidence about the investigation undertaken when Pete complained, which consisted of a single interview of Calhoun.

“The jury could have found this to be insufficient investigative action to enforce New Breed’s anti-harassment policy,” the court said. “Additionally, the fact that Pete, Pearson, and Partee were all terminated during [the] investigation could also have led the jury to reject New Breed’s assertion that it engaged in good-faith efforts to prevent retaliation.”

Affirming the jury’s $1.5 million verdict, the panel also upheld the lower court’s denial of New Breed’s motion for a new trial and judgment as a matter of law.

To read the opinion in EEOC v. New Breed Logistics, click here.

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Oral Complaints Trigger FLSA Protections, 2nd Circuit Rules

Why it matters

What constitutes “fil[ing a] complaint” under the anti-retaliation provision of the Fair Labor Standards Act (FLSA)? According to a new decision from the Second Circuit Court of Appeals, an employee could be entitled to the protections of the statute after he orally complained to a supervisor that he hadn’t been paid in months. Although Second Circuit precedent as well as the statutory mandate to “file” a complaint stood in the employee’s way, the panel overruled its prior case law to find that the FLSA does not limit its scope to workers who file formal, written complaints with government agencies. Instead, opening the courthouse doors to many potential new plaintiffs, the Second Circuit held that although “a grumble in the hallway” about pay policies would not suffice, workers that make an oral or written complaint to an employer that is “sufficiently clear and detailed” may be able to recover under the statute.

Detailed discussion

Darnell Greathouse worked as a security guard for JHS Security Inc. from September 2006 until October 14, 2011. On that day, Greathouse complained to the man he considered his “boss”—the company’s president and part-owner—that he had not been paid in several months.

According to Greathouse, the man responded, “I’ll pay you when I feel like it,” and drew a gun, pointing it at him. Greathouse took the reply to mean that his employment was over. He then filed suit in New York federal court alleging JHS violated both state labor law as well as the Fair Labor Standards Act (FLSA).

When the defendants failed to appear or file an answer, the court entered a default judgment and awarded damages of approximately $30,000. However, the court refused to award damages based on retaliation under the federal statute because Greathouse had not filed a complaint with any government agency and had merely complained orally to his employer.

The district court cited to a 1993 decision from the Second Circuit Court of Appeals in Lambert v. Genesee Hospital (10 F.3d 46) for this proposition. In that case, the federal appellate court ruled that under the FLSA’s Section 215(a)(3), the requirement to “file a complaint” necessitates a “formal” filing with a government entity.

But Greathouse appealed. He pointed to the U.S. Supreme Court’s decision in Kasten v. Saint-Gobain Performance Plastics Corp. (131 S.Ct. 1325 (2011)), where the justices ruled that an oral complaint can serve as a predicate to an FLSA retaliation claim. Appointing an amicus to represent the interests of the employer, the Second Circuit reconsidered the issue—and changed its mind.

“[W]e overrule Lambert to the extent it holds that Section 215(a)(3) requires an employee to have filed a complaint with a government agency as a predicate for an FLSA retaliation claim,” the court wrote. “We conclude that an employee may premise a Section 215(a)(3) retaliation action on an oral complaint made to an employer, so as—pursuant to Kasten—the complaint is ‘sufficiently clear and detailed for a reasonable employer to understand it, in light of both content and context, as an assertion of rights protected by the statute and a call for their protection.’”

However, the justices in Kasten did not address the issue of whether it mattered that the complaint was made to the employer and not a governmental agency. Invoking the remedial intent behind the FLSA, the court said that an “interpretation that excludes clearly stated complaints from protection because they were made to the employer instead of a government agency would run counter to the broadly remedial purpose that the Kasten Court instructed FLSA serves,” concluding that complaints are not required to be made to a government agency.

Given the weight of authority from sister circuits and the Kasten opinion, the Second Circuit looked again at Section 215(a)(3) and found the statutory language “not as plain and ambiguous as it seemed when Lambert was decided. As the Supreme Court explained, ‘even if the word ‘filed,’ considered alone, might suggest a narrow interpretation limited to writings, the phrase ‘any complaint,’ suggests a broad interpretation that would include an oral complaint.’”

The statute itself does not provide that a complaint must be filed “formally,” or exclude from its protections those complaints that are filed “informally,” the court said, nor does it expressly direct that a complaint must be filed with a government agency or any particular entity for protection. The phrase could plausibly be interpreted to include intra-company complaints, the panel noted.

In light of all of these interpretations, the panel found the phrase “filed any complaint” variable in meaning and ambiguous, requiring a review of the FLSA’s statutory purpose and consideration of the interpretations of the agencies charged with enforcing the statute.

As for the statutory purpose, the panel emphasized that “the remedial nature of the FLSA warrants an expansive interpretation of its provisions so that they will have the widest possible impact in the national economy.” Limiting the protections of the statute to employees who make complaints only to government agencies “would discourage the use of desirable informal workplace grievance procedures to secure compliance with the Act,” the panel said, quoting the Kasten court.

Adding to the conclusion: the litigation position by both the Equal Employment Opportunity Commission and the Department of Labor since 1989 and 1999, respectively, that complaints to an employer trigger the protections of the FLSA.

The panel said its interpretation is subject to certain limitations and that whether a complaint was actually filed is a “context-dependent inquiry.”

“In some circumstances, an employer may find it difficult to recognize an oral complaint as one invoking rights protected by FLSA,” the court wrote. “It seems to us inconsistent with Kasten to elevate a grumble in the hallway about an employer’s payroll practice to a complaint ‘filed’ with the employer within the meaning of Section 215(a)(3),” and the decision contemplated “some degree of formality.”

The “employee need not invoke the Act by name, but, as the Court concluded, ‘[t]o fall within the scope of the antiretaliation provision, a complaint must be sufficiently clear and detailed for a reasonable employer to understand it, in light of both content and context, as an assertion of rights protected by the statute and a call for their protection,’” the panel wrote.

Remanding to the federal district court, the panel said it was unclear from the record whether Greathouse’s complaint provided an adequate basis on which to enter a default judgment against JHS on the retaliation claim.

One member of the panel concurred in part and dissented in part, expressing concern about creating new precedent in a case that was not defended.

To read the opinion in Greathouse v. JHS Security Inc., click here.

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California Federal Court Lets Suit Proceed Based on Bag Checks

Why it matters

Employees at a national retailer can pursue a suit based on time spent checking their bags before breaks and at the end of a shift, a federal court judge in California ruled, distinguishing recent U.S. Supreme Court precedent in a similar suit. The retailer had a policy that all bags, purses, jackets, and other personal items had to be inspected by a supervisor before leaving the store for meals and breaks and at the end of their shifts. Alleging that the checks lasted up to 30 minutes, a putative class alleged labor violations for lost meal and rest period time as well as missing overtime. The employer filed a motion to dismiss, but the court denied it, finding that the plaintiffs’ amended complaint sufficiently asserted that the employees were due additional wages and overtime during specifically identified time periods. The court also rejected the retailer’s contention that any time loss was de minimis and further found that the U.S. Supreme Court’s recent decision in Integrity Staffing Solutions v. Busk was inapplicable as that suit was decided under the Fair Labor Standards Act (FLSA) and the plaintiffs in the instant suit made their claims under state law. In addition to serving as a reminder to employers of the generous scope of review in a motion to dismiss, the decision provides an important lesson that Integrity Staffing Solutions will not eliminate wage and hour suits based on wait time, at least for California employers.

Detailed discussion

A pair of plaintiffs filed a putative class action suit against Coach, Inc. in California federal court. They claimed the national retailer violated state wage and overtime laws and committed unfair business practices. Coach moved to dismiss the complaint and the court granted the motion with respect to the overtime claim with leave to amend.

The plaintiffs responded with an amended consolidated class action complaint that re-alleged the overtime claims. Coach filed a second motion to dismiss the suit in its entirety.

This time, the complaint survived judicial scrutiny and U.S. District Court Judge James Donato allowed the suit to move forward.

The “gist” of the complaint “is that Coach required plaintiffs to submit to a bag check when leaving the store, which cut into time for breaks and meals, and kept them late without pay at the end of their shifts,” the court explained.

Although the original complaint “merely parroted” the statute without stating concrete facts showing that the named plaintiffs actually worked overtime hours without proper pay or failed to receive full regular wages, the amended complaint cured those deficiencies, the court said.

The plaintiffs described the “bag check” policy, explaining that they were required to first clock out and then locate a manager, request a bag check, undergo the check, and then be escorted out of the store by a manager, estimating the elapsed time between 5 and 30 minutes while off the clock.

Further, the workers said the policy resulted in working “off the clock” time as well as unpaid overtime on days where they worked over eight hours or weeks with more than 40 hours. The complaint cited specific time periods—the week of December 15, 2013 through December 22, 2013, for example—when the plaintiffs were allegedly entitled to overtime due to the extra time spent on bag checks.

“The [amended complaint] describes the bag check policy and alleges that, as a result of the policy, employees, including [the named plaintiffs], actually failed to receive full wages and proper overtime pay, even going so far as to name specific weeks that the two named plaintiffs did not receive overtime pay that they were entitled to,” the court said. “Because plaintiffs have adequately alleged the underlying wage/overtime, meal period and rest break claims,” the defendant’s motion to dismiss was denied.

Coach’s contention that any time spent awaiting bag checks was de minimis did not change the court’s mind. Assuming that the plaintiffs’ allegations were true as required at the motion to dismiss stage, Judge Donato wrote that the plaintiffs overcame the de minimis argument because they alleged they waited for bag checks for up to 30 minutes a day, “which is clearly significant.”

Finally, the court distinguished a recent decision from the U.S. Supreme Court. In Integrity Staffing Solutions v. Busk, the justices held that the time spent by workers undergoing security screenings was not compensable under the Fair Labor Standards Act (FLSA) because it was not “integral and indispensable” to the workers’ principal activities.

Despite the similarities between the cases, the judge said Integrity Staffing Solutions did not apply. “Plaintiffs here bring California state law claims, not FLSA claims,” Judge Donato wrote. “Integrity Staffing Solutions was ‘premised on an interpretation of the Portal-to-Portal Act of 1947 and how it exempts employers from liability for certain categories of work-related activities. In contrast, California law’s definition for ‘hours worked’ is defined differently and California law does not include an exemption similar to the Portal-to-Portal Act.’”

The plaintiffs’ claims were viable under the California Labor Code, the court said, allowing the case to move forward.

To read the order in Miranda v. Coach, Inc., click here.

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NLRB as Fashion Police: Board Orders Employer to Drop Dress Code Policy

Why it matters

Continuing its focus on employee handbook policies, a divided panel of the National Labor Relations Board (NLRB) ruled that a dress code policy violated Section 8(a)(1) of the National Labor Relations Act (NLRA) because it interfered with the Section 7 rights of employees at a Honda dealership in Massachusetts. The policy—which prohibited employees from wearing insignias and “message clothing” if they interacted with the public—was overly broad, as was a ban on workers wearing pins, a majority of the panel determined. The dealership instituted the policy in a 2010 employee handbook and the provisions became the subject of a charge by the worker’s union. An administrative law judge held the dress code provision was overbroad but upheld the prohibition on pins, finding that it was justified for safety reasons. But in a 2 to 1 decision, the panel said both the pin ban and the dress code policy were unlawful. For employers, the case reiterates the Board’s focus on employee handbooks and the need to ensure compliance with the NLRA.

Detailed discussion

Boch Honda, a Massachusetts-based auto dealership, provided a handbook to employees in 2010 that included a “Dress Code and Personal Hygiene Policy.” The policy stated: “Employees who have contact with the public may not wear pins, insignias, or other message clothing.”

Union members filed a charge with the National Labor Relations Board (NLRB) arguing that the rule violated Section 8(a)(1) of the National Labor Relations Act (NLRA) as it interfered with employees’ Section 7 rights.

An administrative law judge (ALJ) agreed and ordered the rule to be struck from the handbook with notice of the action posted at the employer’s worksite, but ruled that the pins could be prohibited because they posed a safety risk. Boch Honda appealed. A split panel of the NLRB affirmed the ruling with regard to the dress code and reversed on the issue of pins, finding that the employer failed to justify the ban.

Given the “well settled” rule that an employer violates Section 8(a)(1) by prohibiting employees from wearing union insignia at the workplace absent special circumstances and a narrowly tailored rule, the majority found that the dealership’s policy could not survive scrutiny.

“Clearly, the [dealership’s] proscription curtails employees’ Section 7 right to wear union insignia,” the panel wrote. “As such, it is overly broad. Absent special circumstances, then, it is unlawful.” The dealership’s justification for the rule—maintaining its public image—did not constitute a special circumstance justifying its prohibition, the majority said.

With regard to the ban on pins, Boch Honda argued that the rule was implemented to prevent injury to employees and damage to vehicles. Pins can fall off and possibly damage the engine, interior, or exterior of a car or become a projectile and cause employee injury, the dealership told the Board.

“[W]e find that the rule is not ‘narrowly tailored’ to address those concerns,” the panel said. “As written, the rule applies to employees who have contact with the public, regardless of whether they come into contact with the [dealership’s] vehicles. Indeed, the rule applies to employees who do not typically have contact with vehicles (e.g., finance and administrative personnel), and to other employees during their performance of tasks that do not require vehicle contact.”

Boch Honda presented no evidence that pins had actually resulted in damage or injury. “Although the record does contain evidence that employees have caused damage to vehicles, none of that damage was shown or even asserted to be related to employee pins,” the majority noted. And the handbook did not include any statement even arguably linking the rule to safety considerations, the Board added.

The policy stated that “[t]he purpose of the Dress Code/Personal Hygiene Policy is to ensure that employee dress and personal hygiene are consistent with their job functions and the Company’s interest in presenting a professional image to the public.”

“Employees would reasonably understand that image, not safety, was the [dealership’s] justification for the entire rule, including its ban on pins,” the majority wrote. “For all these reasons, we find that the [dealership] has not demonstrated special circumstances justifying its overly broad rule, and therefore the [dealership’s] maintenance of the rule violated Section 8(a)(1).”

The Board ordered that Boch cease and desist from maintaining the unlawful dress code policy, rescind the provision from the handbook and furnish an insert to employees with a lawful version, and post a notice about the order.

A dissenting member wrote separately to explain he would uphold the ALJ’s ruling with regard to the pin ban. “Automobiles are expensive, and the [dealership] has demonstrated that it experiences significant annual losses as a result of property damage to its vehicles,” member Harry I. Johnson, III wrote. “Because it is reasonably foreseeable that sharp objects could scratch, rip, fall into the internal compartments of, or otherwise damage the vehicles, the judge correctly found that special circumstances exist that justify the [dealership’s] prohibition.”

The panel also considered a social media policy instituted by Boch in the 2010 employee handbook but later removed in a 2013 version. While the majority found that the rescission was ineffective as a repudiation of the unlawful social media provisions because the dealership failed to provide employees with assurances that it would not interfere with employees’ Section 7 rights in the future, Johnson disagreed.

Not only did the employer remove the social media policy, it worked collaboratively with the NLRB to draft a compliant provision for the 2013 edition, he wrote.

“[W]e should recognize that the best, quickest way to achieve universal handbook legal compliance with Section 7 standards is to encourage employers to involve the Agency in redrafting provisions rather than to effectively punish them,” the dissent said. “Doing so discourages respondents from taking such actions to remedy alleged unfair labor practices far more promptly than after times lengthy and expensive litigation.”

To read the decision and order in Boch Honda, click here.

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