Recent NLRB Decisions Condone Workplace Profanity and Insubordination

HIGHLIGHTS:

• The NLRB's recent decisions have given broad protections to employees who are discussing or complaining – even in a vulgar manner – about the terms and conditions of their employment to their co-workers or managers. This follows a disturbing trend in the Board's decisions that attack sensible, long-standing management standards of conduct.
• Before taking normal disciplinary action in circumstances where employees may be engaged in protected activity, employers will need to carefully consider the employees' rights.
• Employers will either have to reword general statements with more precision as to the specific activity or activities targeted or remove general normative statements capable of misinterpretation in their employee handbooks.

An administrative law judge (ALJ) of the National Labor Relations Board (the "Board") recently found that a Hooters employee who cursed at her co-worker during an employee bikini contest was wrongfully terminated by her employer because of her protected activity. The Board also found Hooters' employee handbook rules prohibiting behavior, such as insubordination to managers and disrespect to guests, were unlawful. While ALJ decisions are subject to review by the Board, if appealed, this decision follows a disturbing trend in Board decisions that attack sensible, long-standing management standards of conduct.

The Board's recent decisions have given broad protections to employees who are discussing or complaining – even in a vulgar manner – about the terms and conditions of their employment to their co-workers or managers. Clearly, employees are free to discuss, and even complain about, their terms and conditions of employment; this is a core right protected by federal law, whether or not the employees are represented by a union. However, the Board is now frequently condoning incredibly objectionable behavior that is combined with an alleged exercise of protected activity. The Board's recent decisions require careful consideration by employers before taking normal disciplinary action in such circumstances where employees may be simultaneously engaged in protected activity.

Insubordination, Profanity and Disrespect

In the Hooters case, two female employees participating in a mandatory bikini contest complained to managers and other employees that the contest was rigged because another participant, a marketing coordinator, had selected her best friend and her boyfriend to act as judges. Both workers also made complaints about what they perceived were inappropriate comments about other Hooters waitresses made at a bartenders' meeting.

When the marketing coordinator was awarded the $300 first prize, both complaining employees accused her of cheating. One loudly remarked, "You're a f***ing b**ch," and the other continued to yell obscenities at the marketing coordinator in the Hooters parking lot. Both employees were terminated for cursing at their co-worker in front of guests, and one was also terminated for her negative social media posts and tweets.

An unfair labor practice charge alleged that Hooters violated the National Labor Relations Act (the "Act") by disciplining and terminating an employee for protected concerted activity when she complained to Hooters management about the bikini competition and a manager's comment that some of the waitresses were fat. The ALJ rejected Hooters' stated reason for dismissal, which was for, in part, cursing at her co-worker, and found instead that the termination was for engaging in protected concerted activity about the allegedly rigged bikini contest.

Similarly, in a case sent back to the Board from the U.S. Court of Appeals for the Ninth Circuit, Plaza Auto Center, Inc., the Board confirmed its original finding that an employer violated the Act when it fired an employee who cursed out his employer in a meeting about his pay. During the meeting with his employer, the employee called his manager a "f***ing crook" and an "a**hole" and also told the owner of the company that he was "stupid" and that nobody liked him. In addition, the angry employee shoved his chair aside and told his employer that if the company fired him, they would regret it.

Atlantic Steel Co. Decision: Four Factors Test

The board held that it considers the four factors in its Atlantic Steel Co. decision when deciding whether an employee's behavior is so egregious as to lose the protection of the Act:

1. the place of the discussion
2. the subject matter of the discussion
3. the nature of the employee's outburst
4. whether the outburst was, in any way, provoked by the employer's unfair labor practices

The Board's first decision in this case ruled that the employee's conduct was not so egregious to lose the protections of the Act, citing Atlantic Steel. However, the Ninth Circuit disagreed, finding that the Board erred in failing to give due consideration to the nature-of-the-outburst factor. On remand, the Board found that the employee's behavior was neither "belligerent" nor "menacing," but agreed with the Ninth Circuit's finding that the nature-of-the-outburst factor weighed against protection. Still, the Board found the other three Atlantic Steel factors controlling, finding the employee to be protected because his outburst occurred in a closed-door meeting in the owner's office in which the owner was criticizing the employee's protected activity of discussing his working conditions with fellow employees, and that the employee's conduct was provoked by the employer's unfair labor practice of telling the employee that he could quit if he did not like working for the employer.

Starbucks Coffee Company Decision: Employee Discharge Violated the NLRA

In yet another case, Starbucks Coffee Company, the Board again reinstated an employee who engaged in profanity laced tirades against his manager. The first tirade occurred when the employee felt that his manager was slow to assist him during a busy day at Starbucks. Instead of thanking his manager for the requested assistance, which the manager provided, the employee said, "about damn time," "this is bulls**t" and "do everything your damn self." The employee was suspended for this behavior and given a final warning. Six months later, during a heated argument with another Starbuck's manager in the middle of a union organizing campaign, the same employee, in front of several customers, told this Starbucks manager, "you can go f**k yourself, if you want to f**k me up, go ahead, I'm here." Apparently, the manager also used profanity during the confrontation.

While the Board first held that the employee's discharge violated the Act, the Court of Appeals for the Second Circuit ordered the Board to reconsider its holding in light of the fact that the employee's outburst occurred in front of customers and to reconsider Atlantic Steel's four factor test. The Board again found that the employee discharge violated the Act because the employee was a known union supporter, and the Board believed that his discharge was partially based on his strong support for the union during the campaign and his strong union affiliations. Notably, the Board found that other Starbucks employees, including the employee's manager, had been treated very leniently by Starbucks for similar transgressions and that the employee's manager was not terminated for his use of profanity.

Hooters' Employee Handbook Violated Employees' Rights

Returning to the Hooters case, the ALJ also found that the employee handbook contained unlawful rules. The ALJ found that Hooters' employee handbook rules prohibiting the following violated the Act:

• Discussing tips with fellow employees.
• Insubordination toward managers and lack of respect toward fellow employees or guests declared "overly broad" because it prohibited all disrespectful conduct and did not define "insubordination," "lack of respect," or cooperation – all of which the ALJ found to be "subjective" terms that could have a chilling effect on employees in the exercise of protected concerted activity.
• Rule prohibiting insubordination toward managers and lack of respect toward fellow employees or guests was also unlawful because it did not have a sufficient limiting clause, such as limiting the rule to behavior or conduct that does not support the "company's goals or objectives," and, therefore, could chill protected activity.
• Disclosure of company information because employees would reasonably believe it prohibited them from discussing wages and other terms and conditions of employment with nonemployees, such as union representatives.
• "Any other action or activity which Hooters reasonably believes represents a threat to the smooth operation, goodwill or profitability of its business" because it could be viewed as interfering with protected concerted activity.
• "Off-duty conduct" policy deemed unlawful as employees could reasonably believe it prohibits protected concerted activity.
• Discussing "business or legal affairs" outside the company because its broad general proscription could be viewed by employees as prohibiting engaging in protected concerted activity.
• Hooters' social networking policy and its policy requiring employees to be "respectful to the company and other employees" were also deemed to be violations for the same reason.

Hooters was ordered to reinstate Hanson to her former job with back pay and benefits. The ALJ also ordered Hooters to compensate Hanson for any adverse tax consequences from her expected lump sum back pay award and to file a report with the Social Security Administration allocating the back pay awards to the appropriate calendar quarters for Hanson. Hooters was also ordered to rescind all of the above handbook policies.

Handbook Provisions May Not Curtail Protected Concerted Activities

With respect to the potential problems caused by the Board's suspicious view of present day generally acceptable statements of uncontroversial behavioral norms, there does not appear to be an easy antidote. General disclaimers asserting noninterference with protected rights have typically been found not to save ambiguous statements that could possibly be read as infringing upon protected activity. Therefore, employers will either have to reword general statements with more precision regarding the specific activity or activities targeted, or remove general normative statements capable of misinterpretation of the right for employees to engage in protected concerted activity.

To ensure compliance with Treasury Regulations (31 CFR Part 10, §10.35), we inform you that any tax advice contained in this correspondence was not intended or written by us to be used, and cannot be used by you or anyone else, for the purpose of avoiding penalties imposed by the Internal Revenue Code.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.