NLRB Restresses Risk Of Firing Employees Who Discuss Pay

By Robert G. Chadwick, Jr., Managing Member, Seltzer, Chadwick, Soefje & Ladik, PLLC.

Employers understand the disruption to workplace morale which can result from open discussions about employee compensation.

For instance, on February 24, 2011, MCPc, Inc., a non-union company, invited employees to a “team building” lunch. The lunch quickly devolved from “team building” to complaints by employees about their excessive workloads. One employee urged the company to hire additional employees to alleviate these heavy workloads. He added the company could have hired several employees for the $400,000 annual salary being paid to a newly hired executive. Other employees agreed. Employee morale was worse after the lunch than it had been beforehand.

MCPc, Inc. responded to the ill-fated “team building” lunch by terminating the employee who had accessed and shared the salary of the newly hired executive. At the time, the company likely did not anticipate this decision would be the catalyst for more than eight years of costly litigation culminating in a May 23, 2019 Order that the employee be (1) reinstated without prejudice to his seniority and with all records of his prior dismissal expunged, (2) made whole for lost earnings and other benefits, with interest, (3) compensated for “search-for-work” expenses, and (4) compensated for the adverse tax consequences, if any, of receiving a lump sum backpay award.

So, what did MCPc, Inc. allegedly do wrong? According to the National Labor Relations Board (“NLRB”) Decision accompanying the May 23, 2019 Order, the employee’s conduct at the “team building” lunch was protected concerted activity under the National Labor Relations Act (“NLRA”). Specifically, the employee had contributed to shared employee concerns regarding staff shortages. The NLRB found the company violated Section 8(a)(1) of the NLRA by discharging the employee for his protected concerted activity.

To be sure, MCPc, Inc. can, and likely will, appeal the NLRB decision in a federal appeals court. Still, its experience serves as a cautionary tale for other employers. The NLRA is applicable to both union and non-union employers. What an employer may regard as a disruption to workplace morale, the NLRB may regard as legally protected conduct. When employee misconduct even arguably implicates shared concerns over terms or conditions of employment, prudent risk management demands that the NLRA be considered before taking any further action.

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Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor & employment issues.  To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com

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