Management Update

Houston- We Have a Problem: Lessons to Learn from Elon Musk on the National Labor Relations Act and Social Media

By: Fred Preis, Rachael Jeanfreau, and Philip Giorlando

With the current White House Administration’s well-known, pro-union stance and the more restrictive position the National Labor Relations Board will likely take towards employers over the next four years, employers must learn lessons wherever possible to avoid National Labor Relations Act violations.

The National Labor Relations Act (“NLRA”) may not be rocket science, but even Tesla CEO and Space X founder Elon Musk can use some guidance from mission control to avoid turbulence from its application. As part of a spate of violations of the NLRA by Tesla, on Thursday March 25, 2021, the National Labor Relations Board (NLRB) upheld a 2019 ruling that found that a 2018 tweet made by Musk violated the NLRA by threatening to revoke benefits from Tesla employees if they joined a union. In the midst of the United Auto Workers (“UAW”) ongoing union organizing efforts of Tesla’s workforce, Musk posted the following message on his widely-followed Twitter account: “Nothing stopping Tesla team at our car plant from voting union. Could do so tmrw if they wanted. But why pay union dues & give up stock options for nothing? Our safety record is 2X better than when plant was UAW & everybody already gets healthcare.”

After the UAW filed charges against Tesla, the NLRB found that “Musk’s tweet can only be read by a reasonable employee to indicate that if the employees vote to unionize that they would give up stock options. Musk threatened to take away a benefit enjoyed by the employees consequently for voting to unionize.” As part of its ruling, the NLRB ordered Tesla to delete Musk’s Twitter post and required Tesla to post a detailed notice of its labor violations for its workers at its Fremont, California plant. If the mission was to land a successful union negotiation, this ruling is a sign of a bumpy ride.

The NLRA vests employers with certain rights to voice their opinions on unions to their employees. However, the Act also limits what employers can do in response to union organizing efforts. Specifically, employers cannot:

Threaten employers based on their union activity;
Interrogate workers about their union activity or sentiments;
Make promises to employees to induce them to forgo joining a union; or
Engage in surveillance on workers’ union organizing efforts.

Employers should provide ongoing supervisor training on the intricacies of the NLRA’s rules, including whenever union organizing efforts are initiated. Employer violations of the NLRA can lead to fines and arguably more importantly, severely undermine the employees’ perception of the employer.

The NLRA also protects employees’ rights to make certain statements on social media, regardless of whether union organizing efforts are occurring. Employee statements about wages, hours, or working conditions are protected under the Act, and this protection has been broadly interpreted by the NLRB in favor of employees. Employers must avoid policies that prevent employees from making such protected statements on social media. This is especially true considering the current White House Administration’s pro-union stance that it and the National Labor Relations Board will maintain for at least the next four years.

Employers should have their social media policies reviewed and train their supervisors and managers to minimize the risk of NLRA violations, particularly in light of increased organizing efforts throughout the United States.

Get Ready to Submit Your EEO-1 Component 1 Data to the EEOC

By Jerry L. Stovall, Jr.

On March 29, 2021, the U.S. Equal Employment Opportunity Commission (“EEOC”) announced that qualifying employers will be required to file 2019 and 2020 workplace diversity data, (aka EEO-1 Component 1) between April 26, 2021, and July 19, 2021. Qualifying employers, generally those with at least 100 employees and federal contractors with 50 or more employees, should begin to prepare their filings.

You may recall that in May of 2020 the EEOC announced the delay of the 2019 EEO-1 Component 1 data collection in light of the COVID-19 public health emergency. Consequently, EEO-1 filers will have to submit data for both 2019 and 2020 in this year’s data collection. The EEOC has indicated that more information and resources regarding updates on the data collection will be available on a new dedicated website and that they will provide a Filer Support Team to respond to inquiries. You can vising this site for additional information: https://eeocdata.org/

Keep an Eye on These Bills If You Use or Are Considering Using a Mandatory Arbitration Provision

By Jerry L. Stovall, Jr.

As you know, several pieces of federal legislation aimed at limiting or eliminating altogether mandatory arbitration in the employment setting have been proposed and failed in the past several years. In fact, several states: California, New Jersey, and New York, have all passed state laws prohibiting mandatory arbitration of employment disputes. The Biden administration is going to make another run at passing this legislation at the federal level, and employers should stay abreast of the progress of these Bills.

Two of the more comprehensive and high-profile Bills filed to date are the FAIR Act and the PRO Act.

Forced Arbitration Injustice Repeal (FAIR) Act (H.R. 963).

The FAIR Act was reintroduced in February of this year. In 2019 the Bill passed Congress but failed to clear the Senate. The current FAIR Act has 155 cosponsors in the House. If it passes, the FAIR Act will preclude mandatory arbitration agreements for disputes involving, among other things, civil rights and employment. It will also prohibit all class and collective action waivers. You may recall that I have suggested in past updates that class and collection action waivers were two of the most beneficial aspects of mandatory employment arbitration agreements.

Protecting the Right to Organize Act (PRO Act) (H.R. 842).

The PRO Act was also introduced in Congress in February of this year. The PRO Act is even more pro-union and pro-employee than the FAIR Act. For example, the PRO Act would legislatively overturn the Supreme Court's decision in Epic Systems and would make it an unfair labor practice for any employer to use class action waivers.

The PRO Act is expected to be opposed by virtually all Republicans; accordingly, its passage hinges on certain Democratic senators and whether the Senate retains the filibuster. In contrast, the FAIR Act is likely to receive some bipartisan support. Not only did the prior version of the FAIR Act receive some bipartisan support in the House, but some Republican senators may also support the bill-or at least a watered-down version of it. For example, Senator Lindsay Graham (R-SC) has supported limiting mandatory arbitration agreements under the right circumstances. As drafted, the FAIR Act is unlikely to garner sufficient votes in the Senate to overcome a filibuster, but a compromise bill might.

Takeaways

Ongoing state and federal activity demonstrates a concerted effort to limit the use of arbitration agreements and class waivers in the employment context. Unlike in recent years, the composition of Congress is more likely to allow for the passage of such Bills. As such, employers with arbitration programs, and those contemplating implementing such programs, should continue to monitor events in Washington.