Calif. Hooters case refocuses employee rights

Barran Liebman
Oregon Law Firm

Hot Wings, Chilling Effect

Earlier this week, a National Labor Relations Board (“NLRB”) judge found that a Hooters franchise in Ontario, California had unlawfully fired a waitress who was friends with a coworker that had complained about forced participation in an allegedly rigged bikini contest, and who was accused of making certain comments about coworkers and management on social media. The judge found that a more thorough investigation by management would have determined that the accusations of misconduct were false and held the company in violation of section 8(a)(1) of the National Labor Relations Act (“NLRA”). That section prohibits employer policies and practices that have a chilling effect on employees’ exercise of their right to engage in concerted activity for the purpose of collective bargaining or other mutual aid or protection.

The judge also struck down nine employee handbook rules including those regarding discussing tips, insubordination, disrespect to guests, off-duty conduct, discussing the company’s business or legal affairs outside the company, social media use, and an overly broad nondisclosure agreement, finding these rules and the nondisclosure agreement all had a similar chilling effect.

The judge also invalidated the company’s arbitration agreement because it required employees to waive their right to class actions in any forum (chilling concerted action) and because the language would also reasonably be read by employees to prohibit filing of unfair labor practice charged with the NLRB.

The Hooters case is but the next iteration in a string of recent cases in which the NLRB has cast its regulatory gaze on a non-union shop, and struck employer policies that it has concluded impermissibly chill employee concerted activity. Employers of all types should be aware of the NLRB’s ramped up scrutiny of non-union employers, and be prepared to defend their policies and practices to the NLRB. Failure to strike the appropriate balance between protecting an employer’s confidential, proprietary information and regulating workplace conduct on the one hand, and preserving employees’ rights to engage in concerted activity under the NLRA on the other, could result in being dragged in front of the Board to defend against an unfair labor practice charge. Best to regularly review your operative policies ongoing compliance in an evolving area of the law.

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