In an en banc decision, the Eighth Circuit declined to enforce the NLRB’s determination that a Jimmy John’s franchisee acted unlawfully by disciplining and firing employees who used posters to attack the employer’s sandwiches and by soliciting removal of the unprotected posters. The appeals court found that the poster, suggesting sandwiches posed a health threat to consumers, were so disloyal as to exceed the employees’ right to engage in concerted activities protected by the NLRA, as construed in the controlling Supreme Court precedent in NLRB v. Local Union No. 1229, IBEW (Jefferson Standard). On the other hand, the court enforced the Board’s order finding that the employer acted unlawfully when its managers used Facebook postings to disparage and harass a union leader employee for protected activities. Judge Colloton, joined by Judge Benton, concurred in the judgment. Judge Kelly filed a partial dissent joined by Judge Murphy (MikLin Enterprises dba Jimmy John’s v. NLRB, July 3, 2017, Loken, J.).
Organizing campaign. The employer operates 10 Jimmy John’s sandwich shops in the greater Minneapolis-St. Paul area. After the Industrial Workers of the World union narrowly lost a representation election, it continued its organizing efforts by launching a “paid sick leave” campaign among the franchisee’s workers. The lack of paid sick leave was one of the key issues raised with the union during the organizing campaign. Not only were employees not provided paid sick leave; if they were too sick to work, they had to find their own replacements for their shift or risk discipline.
On January 11, 2011, the parties settled objections in the election case, as well as separate unfair labor practice charges. After the settlement, a union supporter posted copies of the unfair labor practice charge and a “Frequently Asked Questions” flyer about the election and settlement on a bulletin board used freely by employees. The employer had no policy limiting what employees could post on the board, but the store manager removed the postings each time they were posted.
The poster. As part of its campaign, the union created a poster that featured two identical sandwiches and noted that one sandwich was made by a healthy Jimmy John’s worker and the other by a sick worker. “Can’t Tell the Difference?” it asked. “That’s too bad because Jimmy John’s workers don’t get paid sick days.” Initially, the union placed the posters on community bulletin boards inside the franchisee’s stores, and management would remove them whenever they were spotted. But then, the union appealed to the company’s co-owner.
On March 10, employees met with a company executive and co-owner and presented a letter requesting sick leave. They promised more posters if the employer did not meet with employees again by March 20 to discuss changing the sick leave policy. When the employer refused to meet, the union launched a press release the same day (which included the poster art) and a group of employees set out to plaster the poster around town. Two days later, the employer fired six employees and issued written warnings to three other employees for their participation.
Facebook postings. Meanwhile, as early as October 17, 2010, an employee established a “Jimmy John’s Anti Union” Facebook group. Executives and store managers posted on the page, both during and after the organizing campaign. Many of the postings disparaged the organizing campaign and the employees who supported the union. Prior to March 20, 2011, a company executive posted a message on Facebook encouraging employees to take union posters down.
Prior proceedings. Finding that the Sick Day posters were not maliciously untrue, an administrative law judge concluded that the employer acted unlawfully by disciplining and discharging the employees. A divided Board affirmed the ALJ’s findings. A divided panel of the Eighth Circuit enforced the Board’s cross-petition for enforcement in its entirety. On rehearing en banc, the Eighth Circuit vacated the panel decision.
Jefferson Standard. In Jefferson Standard, the Supreme Court upheld a decision of the NLRB that a broadcasting station did not violate the NLRA when it fired technicians who distributed handbills “making a sharp, public, disparaging attack upon the quality of the company’s product and its business policies, in a manner reasonably calculated to harm the company’s reputation and reduce its income.” The Court declared that “there is no more elemental cause for discharge of an employee than disloyalty to his employer.” Absent a labor controversy, the technicians’ conduct “unquestionably would have provided adequate cause for their disciplinary discharge within the meaning of § 10(c).”
The Eighth Circuit found that the Board fundamentally misconstrued Jefferson Standard in two ways. First, while an employee’s subjective intent is relevant to the disloyalty inquiry, the Jefferson Standard principle includes an objective component that focuses on the means used. By holding that no act of employee disparagement is unprotected disloyalty unless it is “maliciously motivated to harm the employer,” the Board has not interpreted Jefferson Standard—it has overruled it.
“Malicious motive.” Second, the Board’s definition of “malicious motive” excludes from Jefferson Standard’s interpretation of Section 10(c) all employee disparagement that is part of or directly related to an ongoing labor dispute. The Board refused to treat as “disloyal” any public communication intended to advance employees’ aims in a labor dispute, regardless of the manner in which, and the extent to which, it harms the employer. By requiring an employer to show that employees had a subjective intent to harm, and burdening the requirement with an overly restrictive need to show “malicious motive,” the Board effectively removed from the Jefferson Standard inquiry, the central Section 10(c) issue of whether the means used reflect indefensible employee disloyalty. This was an error of law.
Rather than motive, the critical question in the Jefferson Standard disloyalty inquiry is whether the employee public communications reasonably targeted the employer’s labor practices, or indefensibly disparaged the quality of the employer’s product or services.
Product disparagement. Turning to the merits of this case, the Eighth Circuit ruled that the NLRB erred in concluding that the employees’ product disparagement was protected Section 7 activity simply because its purpose was to obtain paid sick days. Here, the appeals court concluded that the employees’ poster attack was “sharp,” proceeding “in a manner reasonably calculated to harm the company’s reputation and reduce its income.” The posters, press release, and letter were an effective campaign to convince customers that eating Jimmy John’s sandwiches might cause them to become sick. Allegations that a food industry employer is selling unhealthy food are likely to have a devastating impact on the business. Further, the employee’s public claims about the employer’s product were also “materially false and misleading.”
Dissent. Judge Kelly dissented from that portion of the majority’s opinion that found that the posters were not protected activity, and would defer to the factual conclusions of the Board. According to Judge Kelly, Jefferson Standard did not set out a test to apply to determine whether an employer’s “cause for discharge” was “disloyalty to his employer.” He argued that while Jefferson Standard acknowledged that the legal principle that disloyalty is adequate cause for discharge, it left to the Board the task of determining whether, in fact, the discharges were made because of such a separable cause. Accordingly, the dissent would find that the Board reasonably concluded that employee communications criticizing their employer’s product do not lose their the protection of Section 7 when (1) the attack was related to a labor practice of the company, and (2) the employees responsible for the communications lack a “calculating” or “deliberate” motive to harm their employer.
Interested in submitting an article?
Submit your information to us today!Learn More