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

“Take This Job And Shove It”: Emerging Trends In Employee Departures

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

2018 Bureau of Labor Statistics data proves what many employers already know. More than 3½ million employees quit their job every month.

Two-weeks-notice of a resignation may still be the norm for most of these employees, but anecdotal evidence shows that, in a booming job market, more and more employees are willing to end employment relationships in a more abrupt or even callous manner.

On December 6, 2018, a 17-year old Walmart employee posted a video on Facebook entitled “How I quit my job today.” In the video, the employee records himself reading a prepared statement over a Walmart intercom system. The approximately one-minute video, which now has over 500,000 views, begins with the following line: “Attention all shoppers, associates and management, I would like to say to all of you today that nobody should work here, ever.”

On December 5, 2018, the Federal Reserve noted in its monthly Beige Book that “several Chicago firms have reported that some employees have simply quit – with no notice nor means of contact.” The Beige Book, which tracks employment trends, referred to this manner of quitting as being “ghosted.”

Other employers have reported being notified that an employee had resigned via text from the employee. There are even smartphone apps which assist a user in constructing such a text to an employer.

Abrupt departures may not be a new phenomenon and are often attributable to the demand of a prospective employer. The willingness of more departing employees to “ghost” their employers or shame their employers via social media, however, is a relatively new trend.

So, what can an employer legally do to prevent an employee from leaving it in the lurch? What can an employer legally do to prevent a departing employee from sounding off on social media? The answer is very little.

Employment At Will

There are no federal or state statutes in the United States which require that an employee provide any notice of resignation, much less two-weeks-notice. Absent a contract which provides otherwise, the same laws which allow an employer to terminate an employee without cause or notice provide the same option to an employee.

Withholding Last Pay Check

Under the Fair Labor Standards Act and the laws of most states, an employer must pay an employee for hours worked. Many states have payday or last paycheck laws which also dictate the manner and amount of an employee’s last paycheck. Withholding an employee’s last paycheck as punishment for the manner of resignation thus risks a claim by the employee under such laws.

Forfeiture of Paid Vacation Time

A well-drafted, written policy which provides for the forfeiture of unused paid vacation time upon a resignation without notice can be enforceable in most states. The deterrence value of such a policy, however, depends upon the amount of unused paid vacation time available to the employee at the time of separation. A few states, moreover, have laws expressly outlawing forfeiture of vacation pay under such circumstances.

Contractual Incentives

Amongst the contractual options available to an employer are employment agreements which provide for a resignation notice period incentivized by (1) monetary consideration, or (2) a promise of a similar termination notice period by the employer.  Employment agreements may also encourage retention through (1) stock options and other incentives which vest in yearly increments of continued employment, and/or (2) up-front benefits, such as signing bonuses, relocation reimbursement or training, which an employee must repay upon departure before a prescribed tenure of employment.

Job Reference – Circumstances of Departure

There is no legal impediment to the adoption of a policy warning employees that departure without notice will be noted as the reason for separation in response to any inquiry by a prospective employer. Such a policy, however, may not always deter an employee who leaves for another job.

Job Reference – Not Eligible for Rehire

If an employee resigns in response to alleged discrimination in the workplace, the legal risk of a “not eligible for rehire” response to an inquiry from a prospective employer is a retaliation claim.

The legal risks of such a response otherwise vary by state. Some states regard such a response as evidence of an unlawful blacklist. Other states may regard such a response as protected speech.

Disparagement

State tort laws provide a remedy for false factual statements which result in financial loss to a business. A social media post presented entirely as an unfavorable opinion, however, may not be actionable disparagement.

A non-disparagement clause in an employment agreement, which survives termination of the employment relationship, may also provide a contractual remedy for an employer as to certain statements made by a former employee. Certain statements, however, may be legally protected speech under labor and employment laws even if within the scope of such a non-disparagement clause.

Takeaways

Sound human resources practices are certainly a good starting point for avoiding unscrupulous departures. Even as to a good employer, however, the risk of such a departure remains. As noted above, there may be some legally available options to deter such departures, but they may not always be fool proof.

Like it or not, therefore, “ghosting” and viral social media posts may be new facts of life for employers, at least until the booming job market subsides. Without procedures to account for such phenomena, the damage to an employer can be significant. Consider the hypothetical example of an individual who has surreptitiously quit but still has access to an employer’s access codes and passwords.

If they have not already done so, employers should thus immediately be developing crises management procedures to cope with employees who have opted to burn their bridges. As if human resources was not already a difficult job.

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