Second Circuit Holds an Employer’s Rules Against Recording May Violate the NLRA

August 16, 2017
Matthew LaGarde

The Second Circuit recently affirmed a decision by the National Labor Relations Board (NLRB), finding that an employer’s policy prohibiting employees from recording meetings or conversations without management approval violated Section 7 of the National Labor Relation Act (NLRA). Section 7 of the NLRA guarantees employees the right “to engage in…concerted activities for the purpose of collective bargaining or other mutual aid or protection.” 29 U.S.C. § 157. Section 8(a)(1) of the NLRA, in turn, makes it an “unfair labor practice for an employer… to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in [Section 7].” 29 U.S.C. § 158(a)(1).

The Whole Foods Decision

In Whole Foods Mkt. Grp., Inc. v. Nat’l Labor Relations Bd., No. 16-0002-AG, — F. App’x —, 2017 WL 2374843 (2d Cir. June 1, 2017), the Second Circuit reviewed an NLRB decision holding the Whole Foods ban on employee recording violated the NLRA. The Second Circuit refused to hear a new argument challenging the legitimacy of the NLRB’s governing standard because it had not been raised before the NLRB.

Under that standard, the NLRB will find that an employer rule violates the NLRA if it was adopted in response to union activity, if it was applied to restrict the exercise of protected activity, or if employees would reasonably construe the language to prohibit protected activity. That framework was set out by the Board in an earlier decision, Martin Luther Mem’l Home, Inc. dba Lutheran Heritage Vill.-Livonia, 343 N.L.R.B. 646, 647 (2004), and applied to the Whole Foods rule prohibiting employee recording in this case. The Second Circuit determined that, under this framework, the NLRB reasonably held that “recording, in certain instances, can be a protected Section 7 activity,” and that “because Whole Foods’ no-recording policies prohibited all recording without management approval, ‘employees would reasonably construe the language to prohibit’ recording protected by Section 7.” Whole Foods, 2017 WL 2374843, at *2.

Finally, the Second Circuit held that Whole Foods policies were not saved by their stated purpose: to promote employee communication in the workplace. According to the Second Circuit, the NLRB reasonably held that the overbroad policies could nevertheless “‘chill’ an employee’s exercise of her Section 7 rights because the policies as written are not limited to controlling those activities in which employees are not acting in concert.” Id.

The court did note, however, that its holding should not be misinterpreted to state that every no-recording policy will violate Section 7. Citing two NLRB decisions approving narrower employer policies, the Second Circuit stated, “It should be possible to craft a policy that places some limits on recording audio and video in the work place that does not violate the Act.” Id. at *2 n.1.

Impact of the Decision

When considering the impact of the decisions of the NLRB and the Second Circuit, it is important to remember that the NLRA’s protections are not limited to the unionized workforce. The “mutual aid or protection” clause protects even non-unionized employees[1] “who ‘seek to improve terms and conditions of employment or otherwise improve their lot as employees through channels outside the immediate employee-employer relationship.’”  N.L.R.B. v. White Oak Manor, 452 F. App’x 374, 379 (4th Cir. 2011) (internal citation omitted).

However, the Board has long held that to be protected the employees’ actions must be “concerted” – i.e., “with or on the authority of other employees, and not solely by and on behalf of the employee himself” – or must be part of an effort to prepare for group action or to bring “truly group complaints to the attention of management.” Meyers Indus., 281 N.L.R.B. 882, 885–87 (1986). Thus, assuming an employee is making a recording for the purpose of bringing complaints to her employer on behalf of a group of employees, those actions may constitute NLRA-protected activity, regardless of whether the employee is in a union or engaging in union-related activities.

The NLRA is not the only source of protection for employee recording. The Second Circuit’s Whole Foods decision echoes a September 2015 decision by the Department of Labor’s Administrative Review Board (ARB). The Labor Department is charged with enforcing the anti-retaliation provisions contained in 22 federal statutes, spanning a wide range of industries, and the ARB is the final appellate body within the agency.

In Franchini v. Argonne National Laboratory, ARB No. 13-081, ALJ No. 2009-ERA-14 (ARB Sept. 28, 2015), the ARB held that surreptitious tape recording could constitute protected activity under the Energy Reorganization Act of 1974 (ERA), the statute prohibiting retaliation in the nuclear industry. The reasoning of that decision had little to do with the idiosyncrasies of the nuclear industry and suggests that the ARB would similarly hold that recording could be protected conduct under any of the other 21 federal whistleblower protection statutes.

All Recording Is Not Protected

Employees should be wary, however, because not all employer restrictions on recording are unlawful, and not all recordings are protected. For instance, the NLRB has found that a hospital’s policy that prohibited the use of electronic equipment, including cameras, during work time did not violate the Act. Flagstaff Medical Center, 357 N.L.R.B. 65 (2011). Moreover, a recording made with no intention of reporting or uncovering unlawful activity is unlikely to garner statutory protections.

Finally, eleven states require all parties in a conversation to have consented to being recorded in order for the recording to be lawful. In some states, violating these so-called “two-party consent” laws can subject the recording party to serious criminal penalties. Because state laws differ, it is important to consider all relevant laws when telephone conversations involve parties in multiple states. An employee should not click “record” until she is confident that she understands the recording consent laws in the jurisdictions of all parties to the conversation.

[1] The NLRA’s protections do not extend to public employees, agricultural workers, independent contractors, railroad laborers, or supervisors.  29 U.S.C. § 152(2)–(3).

This post was subsequently published in Law360.

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