Originally published August 2005

The National Labor Relations Board (NLRB) has held that a dealership violated the National Labor Relations Act (NLRA) when it discharged employees who refused to sign an employee handbook.

None of the employees involved ever were represented by a union and there was no ongoing organizing campaign. The last page of the handbook read: "I have read and understand the policies and rules of conduct explained within the handbook," followed by a line for the employee’s signature.

After discussing the handbook among themselves, the employees asked the dealer for a meeting to explain several provisions that the employees did not understand. The dealer refused to have this meeting, and informed the employees that anyone who did not sign the handbook by the end of the week would be fired.

Three employees ultimately were fired for not signing. The dealer then unsuccessfully contested those employees’ applications for unemployment compensation benefits on the grounds that the employees had been insubordinate.

Having won before the unemployment compensation board, the employees moved on to the NLRB, which held that the employees’ refusal to sign the employee handbook was protected under the NLRA.

Because the employees made it clear t hat they did not understand some of the policies in the handbook, and because the dealer refused to explain those policies to them, the NLRB had no trouble finding that the employees’ refusal to sign the handbook constituted "protected, concerted activity," and that their termination violated the NLRA.

All employees of a covered employer are protected by the NLRA, and there does not have to be any union involved. While supervisors are excluded from the definition of employee, applicants for employment also are protected. Section 8(a)(1) of the NLRA states that it is a violation to interfere with, restrain or coerce an employee in the exercise of his or her rights protected by Section 7 of the NLRA.

Section 7 describes acts in which an employee may engage freely, including the right to self-organization; to form, join or assist labor organizations; to bargain collectively; to engage in other concerted, protected activity; and to refrain from any such activity.

This protection includes activity engaged in for other mutual aid or protection. Section 7 therefore has been invoked to protect "concerted" employee activity unrelated to union organization.

Activity is "concerted" when two or more employees engage in the activity, or when one employee engages in a certain activity on behalf of a group of employees.

Essentially, activity likely is concerted if it involves a common concern or common cause. Specific examples of protected, concerted activity include the following:

Circulating a petition in an attempt to collect wages allegedly due under the Fair Labor Standards Act;

Nonunion employees banding together and requesting a wage increase;

  • Refusing, in the course of employment, to cross a picket line located at another employer’s place of business;
  • Refusing to work in allegedly dangerous conditions;
  • Expressing concern for the safety of fellow employees;
  • Protests against alleged discrimination;
  • Filing a complaint with a state or federal agency regarding safety or health conditions;
  • Writing a letter complaining of sanitary conditions on behalf of fellow employees; and
  • Utilization of the grievance procedure.

Prior to disciplining groups of employees or an individual employee acting on behalf of a group, a dealer must investigate the facts leading to the decision to discipline carefully to ensure that the employees’ conduct will not be considered "protected, concerted activity" by the NLRB. Otherwise, if employees are terminated in violation of the NLRA, the NLRB can order those employees reinstated with full back pay and benefits.

Terry P. Finnerty, a partner in the Atlanta Office of Duane Morris LLP, is a member of the firm’s Dealer Services Group, representing automobile and truck dealers in a wide range of legal matters, including labor and employment, contract negotiations, succession issues, regulatory and compliance matters and litigating and mediating disputes.

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