Minimizing National Labor Relations Act Liability for Employers with Non-Unionized Workforces

Employers with a non-unionized workforce often mistakenly believe that they are not covered by the National Labor Relations Act (NLRA or the “Act”). The NLRA is most commonly known as the law that guarantees employees the right to unionize, engage in collective bargaining, and participate in strikes. However, employers without unionized workforces can still face liability under the NLRA.

As we previously reported, a September 2023 National Labor Relations Board’s (NLRB or the “Board”) decision highlighted the current Board’s tilt in favor of broad application of the Act.

This article focuses on some of the more common areas of NLRA concerns for non-unionized employers.

Protected, Concerted Activity in the Workplace

Regardless of whether a workforce is unionized, most private sector employers (not railroads and airlines) are subject to the Act, and their employees have the right to engage in protected, concerted activity. Specifically, Section 7 of the NLRA gives such employees the right to engage in “concerted activities for the purpose of collective bargaining or other mutual aid or protection[.]” In general, protected concerted activity occurs when two or more private sector employees take action regarding terms or conditions of employment. For example, even non-unionized employees have the right to talk with one another about their wages, working conditions, or workplace benefits.

Relatedly, Section 8(a)(1) of the NLRA makes it an unfair labor practice for an employer “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7” of the NLRA. Employers with non-unionized workforces often unknowingly engage in activities that unlawfully interfere with, restrain, or coerce employees in the exercise of their Section 7 rights. For example, the NLRB has determined that disciplining such employees, threatening them, promising them certain benefits, or promulgating certain workplace rules can unlawfully interfere with Section 7 rights.

Non-Disparagement Pitfalls

One area where employers with non-unionized workforces often run afoul of the NLRA is non-disparagement provisions. Until recently, it was relatively common for employers to implement a non-disparagement policy or provide severance benefits in exchange for the employee agreeing to a robust non-disparagement clause. However, the current NLRB General Counsel has taken the position that most non-disparagement clauses run afoul of employees’ Section 7 rights. Employers therefore should review and — as applicable — revise their non-disparagement provisions, whether in a handbook or in severance agreements. While broad non-disparagement provisions should be avoided, the NLRB General Counsel has stated that “a narrowly-tailored [sic], justified, non-disparagement provision that is limited to employee statements about the employer that meet the definition of defamation as being maliciously untrue, such that they are made with knowledge of their falsity or with reckless disregard for their truth or falsity, may be found lawful.”

Joint-Employer Liability

Another area where employers with non-unionized workforces potentially face NLRA issues is through joint-employer liability. In this circumstance, even if only one employer technically violates employees’ Section 7 rights, one or more joint employers can also be found liable. In October 2023, the NLRB revised its rule on when joint-employer liability applies. Under the new rule, two or more employers will be held to be joint employers if the employers’ share or codetermine one or more of the employees’ essential terms and conditions of employment, which the NLRB defines as: (1) wages, benefits, and other compensation; (2) hours of work and scheduling; (3) the assignment of duties to be performed; (4) the supervision of the performance of duties; (5) work rules and directions governing the manner, means, and methods of the performance of duties and the grounds for discipline; (6) the tenure of employment, including hiring and discharge; and (7) working conditions related to the safety and health of employees.

Unlawful Workplace Rules

The NLRB has advised that certain workplace rules, even amongst non-unionized workforces, can unlawfully interfere with employees’ Section 7 rights. For example, the NLRB has stated that a rule prohibiting employees from talking about unionizing during working time is unlawful if the employer allows employees to talk about other non-work-related subjects. The NLRB has also taken the position that certain rules denying off-duty employees access to outside nonworking areas of an employer’s property are unlawful.

Disclaimer

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.