NLRB Upholds Broad Moonlighting Policy

Allen Smith, J.D. By Allen Smith, J.D. August 27, 2020
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​The National Labor Relations Board (NLRB) recently reversed an administrative law judge's decision and upheld a broadly worded moonlighting policy. The policy was contested for allegedly discouraging employees who were union members from getting other jobs to help unionize those workplaces, which is a form of "salting."

Following the NLRB's decision, "litigation over these types of rules is less likely," said Kyllan B. Kershaw, an attorney with Seyfarth in Atlanta.

Nicholson Terminal & Dock Co., which handles maritime cargo at two facilities in the Detroit metropolitan area, had the following provision on moonlighting in its employee handbook:

"Employees are expected to devote their primary work effort to the company's business. Therefore, it is mandatory that they do not have another job that: could be inconsistent with the company's interests; could have a detrimental impact on [the] company's image with customers or the public; [or] could require devoting such time and effort that the employee's work would be adversely affected. Before obtaining any other employment, you must first get approval from the company treasurer. Any change in this additional job must be reported to the company treasurer."

The NLRB regional director of Region 7 issued a complaint in 2017, alleging that the policy violated the National Labor Relations Act (NLRA). The employees are represented by the International Association of Machinists Local Lodge 698.

Administrative Law Judge's Ruling Reversed

An administrative law judge ruled on the portion of the policy that focused on another job being inconsistent with the company's interests or having a detrimental impact on the company's image. While the employer articulated legitimate concerns, those concerns didn't outweigh the employees' basic NLRA rights to organize, associate and affiliate with other employees and to participate in union activity on nonwork time without their employer's interference, the administrative law judge determined in 2018.

The NLRB disagreed with the administrative law judge's decision and found the moonlighting policy lawful. The policy imposed no restrictions on becoming a union member or volunteer, the board noted. "Employees would not reasonably interpret the rule to prohibit them from forming, joining or assisting a labor organization," it stated.

The board noted that the purpose of the moonlighting rule was to ensure that employees did not work for a competitor or work so many hours elsewhere that they would be too exhausted to work their regular shift.

'Salts'

A central argument in the case involved "salts," or individuals who get jobs at specific workplaces with the intent of organizing unions.

"Here, the argument is that the employer's moonlighting policy potentially prohibited someone from picking up a job at a second workplace in order to organize that workforce," Kershaw said. "This is an extremely narrow concern. The vast majority of employees are not even aware of union salting." She agreed with the board that an employee "would not reasonably read the moonlighting policy at issue as prohibiting that."

Added Mark Kisicki, an attorney with Ogletree Deakins in Phoenix: "Unions' use of salts has never been a widespread practice, and it is far less common today than it was 50 years ago."

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Policy's Wording

Kisicki said the policy could have been worded in ways to avoid litigation. "A moonlighting policy would have been less likely to result in an NLRB complaint—and an adverse decision by an NLRB administrative law judge, as happened in this case—if it more clearly defined, or provided examples of, employment by third parties that would likely constitute a conflict of interest or that could have a detrimental impact on the company's image," he said. "Examples give employees additional context and ability to understand the reach of the rule."

The employer might have explicitly stated that the rule does not prohibit union activity, noted James Bucking, an attorney with Foley Hoag in Boston. "Most employers, however, are reluctant to say that—and the NLRB has now affirmed that they don't have to.

"This employer had a commonsense anti-moonlighting rule that was written in plain English and prohibited the kinds of things that most employers would see as conflicting with the obligations of full-time employees."

Morale Concerns

Despite the NLRB's decision, Grant Pecor, an attorney with Barnes & Thornburg in Grand Rapids, Mich., said, "Employers have to be wary of any restrictions they place on employees' activities outside of the workplace, as doing so could encourage talented employees to seek employment elsewhere."

Kershaw added that "As freelance and gig economy jobs continue to pop up, it is not uncommon to see employees pick up other jobs, such as driving Uber at night. This is especially true for employees whose hours or wages have been cut as a result of the [coronavirus] pandemic."

Kisicki cautioned that broad policies prohibiting employees from having second jobs can undermine morale, particularly if employees need to have extra work to supplement their incomes.

Narrow policies can protect employers' legitimate concerns without creating the risk that employees become resentful, especially if the employees feel undervalued and underpaid, he said. Such policies might state that employees cannot work for suppliers, vendors, customers or competitors and cannot hold jobs that interfere with their ability to work assigned schedules.

"Resentful employees are far more likely to pose meaningful risks of union organizing than any benefit that an employer might gain by having a broadly worded moonlighting policy," he said.

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