Employment Law Daily NLRB applied wrong test for determining whether employee discharged for protected activity
Tuesday, February 16, 2016

NLRB applied wrong test for determining whether employee discharged for protected activity

By Ronald Miller, J.D. Although affirming a finding by the NLRB that an employee engaged in protected concerted activity when he discussed an engineer shortage and whether his employer could afford to hire additional engineers, the Third Circuit remanded the case to the Board after concluding that it failed to apply the correct legal test in determining whether the employee was discharged for that protected activity or whether he was discharged for alleged misconduct in accessing confidential compensation information. The appeals court found remand was appropriate so the Board could to take into account the employer’s expectations regarding employee integrity and honesty as set forth in its policies (MCPc Inc. v. NLRB, February 12, 2016, Krause, C.). Confidential compensation information. During a “team building” lunch, the attendees discussed how busy everyone was because of an engineer shortage. The employee urged the employer’s director of engineering to hire additional engineers to alleviate the heavy workloads and commented that the company could hire several engineers with the $400,000 salary it was paying a recently hired executive. Other employees expressed their agreement. The company’s chief executive was informed of the comments and became concerned about a possible breach of confidential files. He directed HR to review the employee’s access to computer records. It was discovered that he had obtained global access privileges during a call center project and had the ability to view confidential files normally restricted to HR and IT personnel. Eight days later, the employee had a face-to-face meeting with the CEO. He was asked where he obtained the salary information regarding the new executive, but he gave shifting answers regarding his knowledge of executive pay. Concluding that he was lying about how he had obtained the salary information, the CEO accused him of disclosing the executive’s confidential compensation. The employee was terminated and escorted from the office. Overbroad confidentiality rule. The NLRB General Counsel issued a complaint alleging that the employer acted unlawfully by discharging the employee for complaining about working conditions, as well as maintaining an overbroad confidentiality policy. An administrative law judge applied the test approved by NLRB v. Burnup & Sims, Inc. and found that the employee was fired for accessing confidential files after engaging in protected activity during the lunch. The Board found that the employer’s policy barring discussion of confidential information was overbroad and could not constitute a valid ground for termination. As to whether the employer unlawfully discharged the employee, the Board held that the Burnup & Sims test was inapplicable because the employee accessed the files prior to his protected activity. Still, the Board found that the employer acted unlawfully, because the ALJ also had concluded that the employee had not accessed confidential files. Without reaching the employer’s primary rationale for terminating the employee—dishonesty about how he obtained the salary information—the Board affirmed the ALJ’s decision that the employee was discharged for his protected concerted activity. Concerted activity defined. The Third Circuit affirmed the Board’s holding that the employee engaged in protected activity, but it concluded that the Board failed to apply the correct legal test to determine whether he was discharged for that protected activity. The appeals court first examined what actions of an individual employee must be linked to actions of fellow employees for the individual to have engaged in concerted activity. Complaint to management. It appeared the employee complained to management to improve his working position, without the imprimatur of other employees, but arguably also to induce group action in the interest of those employees. This conduct may satisfy the test for concerted activity. Although complaining in a group setting is not sufficient in itself to transform an individual grievance into concerted activity, a lack of prior planning does not foreclose a finding of concerted activity where the individual’s statements further a common interest or, by their terms, seek to induce group action in the common interest. Here, the employee engaged in concerted activity when he communicated his dissatisfaction about shared working conditions to a member of management during the lunch, concluded the appeals court. Mutual aid. Having determined that the employee’s statements were concerted, the court had little difficulty concluding that his statements were also protected. Concerted activity is protected as long as it is undertaken “for the purpose of collective bargaining or other mutual aid or protection,” and actions taken for mutual aid or protection include those intended to improve conditions of employment. The employee’s complaints about the effect of the engineer shortage on the employees’ quality of life clearly related to improving employee work conditions, and so did not “fall outside the shelter of Sec. 7.” Basis for discharge. The court next turned to whether substantial evidence supported the Board’s conclusion that the employee’s protected statements formed the basis of his discharge. The employer said he was fired for (1) improperly obtaining confidential salary information; (2) disseminating that information; and (3) lying to the CEO about where he had obtained the information. The Board reasonably dismissed the second of these rationales, said the Third Circuit, because the employer’s policy of barring employees from disseminating confidential information was overbroad. Reasons unrelated to protected activity. The other explanations offered by the employer could constitute legitimate business justifications for its decision, but the Board and ALJ applied the wrong legal test in analyzing the first rationale; they did not apply any test to the remaining rationale. The appeals court accordingly addressed the appropriate test. Where an employer argues that it discharged the employee for reasons unrelated to his protected activity, the Third Circuit relies on the Board’s so-called “mixed motive” or “dual motive” test set forth in Wright Line. “If the General Counsel makes a prima facie showing that protected conduct was a motivating factor in the employer’s decision, the burden shifts to the employer to demonstrate that the ‘same action would have taken place even in the absence of the protected conduct.’” Misconduct during protected activity. However, the court takes a different approach in those “special circumstances” where the employee is discharged for allegedly engaging in misconduct during his protected activities. In such cases, an employer’s good faith belief that an employee committed misconduct is not the last word on the lawfulness of its action. After the employer carries its burden of showing that it held an honest belief that the employee engaged in misconduct, the burden then shifts to the General Counsel to “affirmatively show that the misconduct did not in fact occur.” Must consider misconduct. Here, the ALJ and Board’s determination that the employee was terminated for his protected statements at the lunch did not appear to take into account significant countervailing evidence that the employer would have discharged the employee regardless of his statements because it believed he engaged in improper data access and/or dishonesty. Accordingly, it was appropriate to remand for the Board to take into account evidence regarding the employer’s expectations regarding employee integrity and honesty as set forth in its policies.

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