Disciplining Employees for Bathroom Conversation Violated Federal Labor Law

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By:  Claudia D. Orr

 

The National Labor Relations Board (NLRB) just ruled that Quicken Loans committed an unfair labor practice and violated the National Labor Relations Act (NLRA) when it disciplined two employees for engaging in concerted activity protected under Section 7 of the NLRA.  Wait until you read what happened!

In August 2014, Austin Laff was employed by Quicken Loans as a mortgage banker in Arizona. Six months later he was fired for having a conversation in a men’s room which was open to the public.  Specifically, it was alleged that Laff commented to Michael Woods, a coworker, about a client who had refinanced 4 years earlier and “that client should get in touch with a f—ing Client Care Specialist and quit wasting his f—ing time.” The other employee responded with his own negative comments.  Another coworker, who had been in a stall at the time, came out, recognized the two speakers and reported the conversation.  There was a significant discrepancy between the three employees’ versions concerning who said what to whom. However, an email went out to all employees in the office stating:

I know that this email has been sent out before and I will send it out again!!!!  Under no circumstances should we be discussing the pay we receive, in an area that a client or potential client could ever hear us.  This goes along with discussion [sic] specific clients, client profiles, credit costs and rates that we have given to clients.  Never, EVER should we be swearing in the bathroom especially about clients.  Also, please refrain from stating that clients that call in are wasting your (*swear word*) time.  This is NOT who we are and NOT what we stand for.  Check yourself at the door.

The font was so large that this six and half sentence email took up the entire email page.

Management met with Laff (who had been the recipient of prior discipline) and, when he denied the incident, they terminated his employment. Later that evening, Laff sent an email to management indicating that, initially, the allegations had confused him.  However, having had a chance to think about them, he realized that the conversation had occurred, but it was Woods, not him, who had made the comments.

Laff’s discharge stood, but Woods (who had no prior discipline) was disciplined for taking part in the conversation and warned that further unprofessionalism would result in discharge.

Under Section 7 of the NLRA, employees have the right to engage in “concerted activity.”  Section 7 states that “Employees shall have the right to self-organization to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid and protection.”  To be protected the actions must be both “concerted” and for the purpose of “mutual aid or protection” (and not solely on behalf of the employee himself).

The NLRB found the comments above to be concerted activity.  “…Laff and Woods were discussing common concerns regarding terms and conditions of their employment specifically relating to how calls are forwarded and whose responsibility it was to field calls.”

While there is more analysis of the evidence (including an adverse inference resulting from Quickens’ failure to have Woods testify), the end result is that the NLRB found that Laff and Woods had engaged in protected activity and, therefore, the discharge and discipline actions were unlawful. The statements, regardless of who made them, did not lose their protection because of the use of profanity given that management often used or tolerated profanity in the workplace.

Moreover, the NLRB found the directive in the email to contain unlawful rules that prohibited employees from discussing their terms and conditions of employment and their pay. The instruction was a “serious impediment to, and a clear restraint upon, and interference with the employees’ Section 7 rights to engage in protected and concerted activity.” The violation included the instruction that “Never, EVER should we be swearing in the bathroom, especially about clients,” and the prohibition against stating, “that clients that call in are wasting your (*swear word*) time.” The NLRB noted that, in fact, the rules were published after Laff and Woods had engaged in protected and concerted activity and punished for doing so.

Finally, the NLRB found the separation documents given to Laff requiring him to “keep secret all proprietary / confidential information, including ‘client information, employee information, financial information, or any other internal information about Quicken Loans’” to be so broad as to potentially restrict Section 7 activities. So was the rule restricting “employees from contacting or soliciting Quicken Loans’ employees or clients ‘for any reason’ to be overly broad.” The NLRB also found the interrogation to be coercive and the email gave the impression that management may be conducting surveillance of employees, both in violation of the NLRA.

If this opinion is not enough to send chills down your back, read the NLRB General Counsel’s memo from last year which should have resulted in your review of numerous policies including social media, confidentiality, etc.  There can be no doubt just how broadly the current NLRB interprets Section 7 rights.  If you are unsure whether your policies and practices are in compliance, you should consult with an experienced labor/employment attorney, such as the author.

This article was written by Claudia D. Orr, who is Chair of the Legal Affairs Committee of Detroit SHRM, and an experienced labor/employment attorney at the Detroit office of Plunkett Cooney (a full service law firm and resource partner of Detroit SHRM).  She can be reached at corr@plunkettcooney.com or at (313) 983-4863.  http://www.plunkettcooney.com/people-105.html. 

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. April  2016.