DC Circuit Reverses NLRB Decision Involving Disparaging Remarks

Takeaway: The D.C. Circuit’s decision in this case underscores the importance of maintaining civility in the workplace, highlighting that disparaging remarks cannot be defended under the guise of labor rights. While the National Labor Relations Board has broadened its interpretations of unfair labor practices, courts may not always affirm its expansive views.

The U.S. Circuit Court of Appeals for the District of Columbia issued a decision reining in the National Labor Relations Board’s (NLRB’s) expansive prosecution of alleged employment-related unfair labor practices. In this case, a three-judge panel unanimously held that the board had overreached by finding that the employer, Stern Produce, violated the National Labor Relations Act (NLRA) by: 1) advising a driver about its policy prohibiting the coverage of in-cabin cameras and 2) issuing a written warning to an employee who made disparaging remarks that violated the employer’s equal employment opportunity (EEO) policy. The court found that no reasonable jury could have found as the board found and reversed the board’s decision and order. The court also admonished the board for concerning itself with “trifles” and making “nonsense” conclusions.

The history of Stern’s entanglement with the board went back several years. A group of employees engaged in union organizing efforts in 2015, which included filing a petition for an election. In relation to that organizing effort, the union filed a charge alleging that the employer violated the NLRA in multiple ways. In 2019, the board ultimately agreed with an administrative law judge (ALJ) that the employer had committed various unfair labor practices. In 2020, the same union filed another charge against the employer, this time alleging that the employer unlawfully failed to recall union supporters after a layoff related to the COVID-19 pandemic. That charge was settled in 2021. As part of the settlement agreement with the board, the employer agreed to recall two drivers who had been vocal union advocates.

After the employees were recalled, two separate incidents took place that resulted in the union filing yet another charge. First, in July 2021, a supervisor noticed that a driver, who had been recalled pursuant to the settlement, had covered the camera inside the cab of his truck. All trucks had such cameras, and the employer maintained written policies that the cameras were in the trucks and could be monitored at any time. The supervisor texted the driver, “You cant [sic] cover the camera it’s against company rules.” The driver later responded that he was on his lunch break. The issue was never brought up again.

Second, in August 2021, a couple drivers were jokingly calling each other “baby.” Another driver, who had also been recalled per the settlement, commented, “You know they kill people like that in your country,” and clarified that he was talking about “gays.” He then guessed that one of the drivers was from Afghanistan or Iraq. A supervisor overheard the exchange and reported it to company leadership, who commenced an investigation. The employer determined that the comments violated the EEO policy and issued a written warning to the driver.

The union said to the board that texting one of the recalled drivers about uncovering his camera created an unlawful impression of surveillance and that issuing the written warning to the other recalled driver was unlawful discrimination or retaliation. The general counsel issued a complaint, but an ALJ found that neither instance violated the act, and they dismissed the case. However, upon appeal, the board reversed and found that the employer had violated the act as alleged. The board, in finding evidence of union animus, relied on the prior alleged unfair labor practices, including the settlement agreement.

The company appealed, and the D.C. Circuit assessed whether the board’s conclusions were supported by “substantial evidence on the record as a whole,” meaning whether it was possible for a reasonable jury to reach the same conclusions. On both counts, the court deemed that the board’s conclusions were “nonsense.”

With respect to the allegation regarding the supervisor’s text message about uncovering the camera, the court emphasized that the employer’s written policies expressly notified employees that the cameras were in the cabins of the trucks, that employees had no expectation of privacy, and that the cameras had to remain uncovered at all times. The court found it difficult to fathom that sending one text message reminding an employee about an established written policy could support a violation of the act.

The court further commented that the board had “strayed far from its statutory mandate” by finding that surveillance that was merely “out of the ordinary” constituted unlawful coercion.

Similarly, the court was more than skeptical of the board’s conclusion that issuing the written warning to the employee for violating the EEO policy was somehow discriminatory or retaliatory. The court described the board’s own Wright Line test and explained that there must be some evidence of a causal relationship. In other words, there had to be evidence linking the discipline to some protected activity, and there was simply none in that case.

Importantly, the court also held that the board erroneously relied on the existence of the settlement agreement as evidence of union animus. The settlement agreement was just a settlement, not an admission of wrongdoing. The unproven allegations in the complaint underlying the settlement thus could not be used to argue that the employer had previously violated the act with respect to the nonrecall of certain employees.

Perhaps one of the most significant aspects of this decision, though, was the court’s commentary about the board drifting “further and further” from the act. Without question, the current board has broadened its interpretations of what constitutes an unfair labor practice and expanded its remedial authority.

The court’s decision in this case was not only a decisive overturning of the board’s findings, but also a strongly worded admonishment of the board’s current track. The court explained that, over time, the board has expanded the limits of its logic to find labor law violations. While the court’s ruling to vacate the board’s decision is limited to this specific case, the court certainly sent a message that the board’s statutory mandate only goes so far and that it will not rubber-stamp board decisions.

Stern Produce Company, Inc. v. NLRB, D.C. Cir., 23-1100, 23-1122 (March 26, 2024).

Elizabeth Mincer is an attorney with Duane Morris in Philadelphia.