‘Patient Safety Near Miss’ Justifies Termination Without Age or Disability Discrimination Liability

After a university dismissed a member of its medical residency program, she sued for wrongful termination and alleged she had been a victim of age discrimination under the Age Discrimination in Employment Act (ADEA) and the Nebraska Fair Employment Practices Act (NFEPA) as well as disability discrimination and retaliation under both under the Americans with Disabilities Act (ADA) and the NFEPA. The U.S. 8th Circuit Court of Appeals (which covers Nebraska employers) recently upheld the dismissal of her claims without a trial, however, affirming a U.S. District Court for the District of Nebraska ruling.

Facts

Dr. Mary E. Canning, age 57, became an internal medicine resident at Creighton University in July 2015. During the first year of residency, she scored in the lowest 15 percent in the country on an in-service examination. Several doctors expressed concerns about her basic skills and level of competence, including memory issues.

After reviewing each resident's progress, a committee determined Canning hadn’t evolved in several areas, making it necessary for her to repeat the first year of residency. The panel let her know she was being placed on a leave of absence with pay until a fitness-for-duty evaluation could be conducted proving she was safe for patient care. She also was told her residency contract wouldn’t be renewed regardless of the evaluation’s results.

Canning retained counsel who sent the committee members a letter outlining their alleged acts of unlawful discrimination and objecting to her participation in the fitness-for-duty evaluation. Creighton's counsel in turn offered a firm resolve that she could repeat the first year of residency so long as she agreed to the evaluation and was cleared for duty.

A neuropsychologist evaluated Canning and found her to be in good mental health. The fitness-for-duty evaluation’s results also gave no indications of medical or psychiatric conditions that would preclude her from performing her duties. Therefore, she was permitted to repeat the residency intern year.

Canning continued to struggle academically, showing an inability to complete assessments or improve to the level of what would be expected from a first-year resident. After taking the in-service exam for the second time and scoring in the lowest seven percent in the country, she was placed on probation.

While on probation, Canning made an error that could have affected a patient’s safety. She discharged a patient admitted for a pulmonary embolism without providing a prescription for an anticoagulant. Her supervisors had previously reviewed the discharge plan with her and instructed her to prescribe the anticoagulant.

Canning admitted the error was “extremely serious.” The committee let her know she had been dismissed from the residency program, pointing to the “significant patient safety near miss” as its reason.

Resident’s claims and lawsuit

After Canning sued for age and disability discrimination and retaliation, Creighton offered nondiscriminatory reasons for terminating her from the residency program by thoroughly documenting her:

·         Lack of medical knowledge;

·         Substandard clinical skills; and

·         Inability to perform a first-year internal medicine resident's duties in a timely fashion.

The documentation showed Canning’s performance in the residency program lacked progression and was at the minimum standards expected of a first-year resident. Creighton argued it “had a right—if not an obligation—to respond to an act or omission affecting patient safety with termination of the responsible individual.”

Creighton asked for summary judgment (dismissal without a trial), and the district court agreed, concluding there wasn’t enough evidence for a jury ever to rule in Canning’s favor. She appealed.

On appeal, Canning argued the district court erred when it concluded no rational fact-finder ever could conclude her termination was motivated by age, but the 8th Circuit affirmed the ruling. It pointed out Creighton produced a legitimate, nondiscriminatory reason for the termination by explaining she had made an “egregious” error affecting patient safety in spite of “supervisor and attending efforts.”

Thus, Creighton satisfied its burden. To rebut the reason, Canning needed to show it was pretextual (or a cover-up for illegal discrimination). But, the 8th Circuit agreed with the district court that her proof had fallen short.

Bottom line

Sensitivity to an employee’s potential or actual disabilities is a good practice and required by the law in terms of considering accommodations. Often, older employees’ age may lead to the question of disabilities. But safety concerns, particularly in the medical arena, will often be paramount and provide justification for dealing with an employee’s errors that threaten the safety of a patient (or coworker, client, customer, or the public).

Bonnie M. Boryca is an attorney with Erickson│Sederstrom, P.C., in Omaha, Nebraska. You can reach her at 402-397-2200 or boryca@eslaw.com.

No Age Bias in Demoting 51-Year-Old Employee for Lack of Accounting Experience

Former employees alleging age discrimination have the burden to prove the employment decision in question hinged on their age. In a recent case arising in Nebraska, the U.S. 8th Circuit Court of Appeals (which has jurisdiction over employment claims arising in the state) found the federal trial court in Omaha had properly dismissed the age claims raised by a 51-year-old woman. While restructuring its financial department, the employer demoted the employee because she lacked accounting experience, after which she ultimately resigned.

Facts

Lana Starkey worked for Amber Pharmacy from September 2001 until August 2015. In 2014, her position changed from enrollment director to financial services director. The change coincided with the acquisition of Amber by Hy-Vee, a supermarket chain.

After the acquisition, Amber’s accounting and financial department was found to be “in complete disarray,” a situation exacerbated when the pharmacy implemented a new operating system in February 2015. The company retained a “third-party implementation consultant” for the new operating system, who reported the biggest obstacle to implementing the system was because the financial team was “understaffed” and “potentially not the right skill level” and lacked “management in the financial area.” The consultant recommended restructuring the team.

At about the same time the consultant delivered the report, Starkey reported to others that Amber was being overpaid by Texas Medicaid, incorrect billing codes were being used for the payments, and some employees were engaged in e-mail practices that raised concerns about violating the Health Insurance Portability and Accountability Act (HIPAA).

The company considered various plans for restructuring the financial department, ultimately determining Starkey’s position would be eliminated. According to the company, the decision was based on accounting expertise, which Starkey lacked, and her struggles in adapting to the new operating system.

Starkey was told her job was being eliminated and was offered a choice of two new positions, both of which were demotions with a pay cut. In June 2015, she reluctantly accepted one of the positions but questioned whether the demotion was caused by her report of the Medicaid and HIPAA issues.

In August 2015, Starkey resigned, after which she didn’t receive a timely COBRA notice about her right to elect temporary continuation of health insurance coverage.

Legal Action

Starkey filed suit in Nebraska state court, claiming her resignation was caused by discrimination, retaliation, the demotion, and a hostile work environment, asserting various federal and state claims against Amber, Hy-Vee, and Mike Agostino, Amber’s president. The defending parties moved the case to federal court and promptly asked for summary judgment (dismissal without a trial), asserting no material facts were in dispute and that they were entitled to judgment as a matter of law.

The federal court granted summary judgment on each of Starkey’s federal charges, including her Age Discrimination in Employment Act (ADEA) claims. It also dismissed all state claims except for a particular portion of her claim under the Nebraska Fair Employment Practices Act (NFEPA). It remanded the retaliation claim based on her reporting of the Medicaid discrepancies to state court.

The federal court also found Hy-Vee and Agostino weren’t proper parties and dismissed all claims against them.

8th Circuit’s Decision

Starkey appealed the trial court’s decision on all claims except for one filed under Title VII of the Civil Rights Act of 1964, which she abandoned on appeal. Amber appealed the district court’s partial denial of summary judgment on the NFEPA claim.

Age bias claims tossed. The 8th Circuit upheld the trial court’s summary dismissal of Starkey’s age discrimination claims. After noting there was no direct evidence of age bias and assuming she could establish an initial prima facie (or minimally sufficient) case, it found Amber articulated a legitimate, nondiscriminatory reason for eliminating her position in the newly restructured financial department and demoting her, specifically the need to put a stronger emphasis on accounting and more effectively implement the new operating system.

In addition to the fact the company needed to prioritize accounting skills and experience to operate the new system, Starkey had candidly admitted “(a)ccounting is not for [her].” The court noted it would not second-guess the employer’s business judgment, particularly when it was based, at least in part, on the third-party consultant’s recommendations.

Therefore, to prevail on the age claim, Starkey would’ve had to show the stated reasons were a mere pretext (or cover-up) for age discrimination, i.e., “but for” her age, she would not have been demoted. The court quickly rejected her assertion that since other employees over the age of 40 were terminated and younger employees absorbed her job duties, she was a victim of age bias. The court found all the accused parties were entitled to summary judgment on her age-based claims.

COBRA claim fails. The 8th Circuit likewise upheld the dismissal of Starkey’s COBRA claim since she hadn’t pointed to any facts showing an interference with her attainment of benefits or that she was harmed in any way by any lack of notice. Starkey admitted she (1) knew about her COBRA rights, (2) wouldn’t have elected the coverage anyway, and (3) had enrolled in her husband’s less expensive employer plan in which she had no out-of-pocket medical expenses.

Hostile environment, emotional distress charges also thrown out. Finally, the 8th Circuit found the trial court had properly dismissed Starkey’s claims for hostile environment and intentional infliction of emotional distress based on the demotion. She hadn’t alleged sufficient facts to establish outrageous conduct and severe emotional distress, as Nebraska law requires.

Retaliation claims survive. The 8th Circuit found all of Starkey’s retaliation claims under the NFEPA should be remanded (or sent back) to state district court to analyze and determine whether her activity was “protected conduct” and whether it would apply the “manager rule” in the context of a retaliation claim under the state statute. The manager rule has become an emerging trend in many courts. It provides that a management employee who, in the course of her normal job performance, disagrees with or opposes her employer’s actions doesn’t engage in protected activity. Lana L. Starkey v. Amber Enterprises, Inc., et al., Case No. 19-3688 (8th Circuit, 2021).

Lesson for Employers

Starkey’s case underscores the importance of developing a well-reasoned plan for any company or department restructuring that will involve the elimination of certain positions. You should develop and apply clear criteria for executing the restructuring.

Mark Schorr is the editor of the Nebraska Employment Law Letter and a frequent contributing author to HR Daily Advisor today, which goes out to more than 200K employers, HR pros, GC, etc., across the country

Managing Employee Arrests and Convictions

Question: One of our employees has been arrested but not convicted. It doesn’t appear he’s going to be released in the new future. Is it better to put him in an unpaid “leave” status or fire him?

The answer to this question depends on a number of factors. The law generally prevents employers from taking action, or refusing to hire employees, based solely on arrest records, as opposed to actual convictions. However, if you have additional evidence or information which corroborates the reasons for the actual arrest, which independent evidence would tend to establish that the employee is guilty of a crime which is job related and which would render him unsuitable for the position in which he is employed, you would be on solid ground in terminating the employee based upon the totality of the available evidence and information. Additionally, to the extent he will be absent for an extended period, if you have strict attendance policies, or no-fault attendance policies, you will have grounds to terminate the employee based upon violation of your attendance policies, as incarceration is not a legitimate excuse for an employee’s failure to show up for work in compliance with your attendance policies. If you determine that you will not terminate the employee, at the very least you should place the employee on unpaid leave pending resolution of his criminal case.

Nebraska Supreme Court defines “restore” and “suitable employment” for vocational rehabilitation plans

Nebraska law permits the Nebraska Workers’ Compensation Court to approve vocational rehabilitation plans for certain injured workers to facilitate their return to gainful employment. Read on to learn about the Nebraska Supreme Court’s recent consideration of what the law means to “restore” an employee to work and in “suitable employment.”

Factual Background

            Charles Anderson injured his arm while working as a millwright with EMCOR Group, Inc. When Anderson was injured, he was making $26.50 an hour and $1060 per week. When Anderson reached maximum medical improvement, the workers’ compensation court determined that he was entitled to a vocational rehabilitation evaluation. Anderson and EMCOR agreed on a vocational rehabilitation counselor, Lisa Porter.

            Porter prepared a “Vocational Rehabilitation Plan Justification for Formal Training Proposal.” Under Nebraska statute, there are five priorities that must be used in developing and evaluating a vocational rehabilitation plan. A higher priority may not be used “unless all priorities below it are unlikely to result in suitable employment.” For Anderson, the three lowest priorities were inadequate as they involve a plan to work for the same employer. EMCOR did not have any suitable employment available for Anderson. Porter decided that the next highest priority would be unavailable to Anderson as well, which involved employment with a new employer. Porter’s research showed that available jobs for Anderson paid $9 to $11 an hour; not suitable in light of his earnings at EMCOR of $26.50 per hour. Porter also contacted other employers but they did not have suitable employment for Anderson.

            As a result, Porter decided the only option for Anderson was under the highest priority plans. This priority involved “formal training that will lead to employment in another career field.” Anderson had grown county-fair award winning vegetables in the past. Anderson also had an interest in this area. Therefore, Porter felt the career field best suited for Anderson would be in horticulture or agriculture.

            Upon making this finding, Porter prepared the plan for Anderson. Under her plan, Anderson “would obtain a 2-year associate’s degree of applied science in agriculture business and management with a focus in horticulture at Southeast Community College in Beatrice, Nebraska.” Anderson’s hourly wage would be $13.20 after completing his education.

            After the plan was created by Porter, it was evaluated by a vocational rehabilitation specialist appointed by the compensation court. The vocational rehabilitation specialist denied Porter’s plan. Based on information the court’s specialist learned from the community college’s placement services director, formal training was unnecessary for the job goals of the plan. The specialist also stated that the job search done by Porter showed six jobs that did not require training and that paid between $9 and $14 per hour. The specialist ultimately decided that Porter’s formal training plan was “not reasonable or necessary” as one of the plan goals (employment as a vegetable farmer) was something that Anderson was already performing so he had no need for further training.

            After the specialist denied the plan, EMCOR petitioned to modify the award of vocational rehabilitation benefits and services. EMCOR alleged that Anderson’s “condition and circumstances no longer support an award of such services.” EMCOR claimed these services were no longer necessary because Anderson was already partaking in the practice of gardening and Anderson admitted “his inability to earn a similar or increased wage performing the work for which he seeks vocational rehabilitating retraining, and consent to earning such a lower wage.” Anderson responded by filing a motion requesting the implementation of Porter’s plan.

Anderson’s Testimony

            The court heard evidence on Anderson’s motion. Anderson testified that he had earned his GED and received a diploma in computer-aided drafting in 1998. Due to changes in technology, this education was no longer useful. Anderson testified that there were few jobs available in his area, and he was unwilling to work more than 25 miles away from his hometown. Anderson did not seek employment in the previous year but did earn $150 a week for five months from selling vegetables that he grew in his garden. Collectively, Anderson and his wife made $8,000 per year. Anderson testified that his “ultimate career employment goal was to be self-employed.” Anderson wanted to expand his greenhouse. Formal education would qualify him for jobs in selling chemicals, farm management, or as a golf course manager. In learning these potential jobs, he could then build a greenhouse and become self-employed.

Compensation Court’s Opinion

            The compensation court dismissed EMCOR’s petition to modify the award of vocational rehabilitation benefits and services and declared that Anderson was “entitled to participate in the proposed plan” because his current job of farming was not “suitable employment.” The court then determined that it was “unable to conclude that [Porter’s] plan will not lead to a suitable job.” EMCOR then appealed.

Nebraska Supreme Court Ruling

            In considering the appeal, the Nebraska Supreme Court noted one of the primary purposes of the Nebraska Workers’ Compensation Act is “restoration of an injured employee to gainful employment” and that if an employee is “unable to perform suitable work for which he or she has previous training or experience, the employee is entitled to vocational rehabilitation services as may be reasonably necessary to restore him or her to suitable employment.” The central focus of EMCOR’s appeal was on whether the vocational rehabilitation plan set forth by Porter would restore Anderson to “suitable employment.”

            The court explicitly adopted definitions of “restore” and “suitable employment.” “Restore” was defined to mean “to put back.” The court defined “suitable employment” to mean “employment which is compatible with the employee’s pre-injury occupation, age, education, and aptitude.”

            The compensation court determined that income of less than $8,000 per year was not “suitable employment” for Anderson. In order for him to gain employment in the relevant field of horticulture, additional education would be required. The compensation court had also taken into consideration the fact that job opportunities were limited in the area where Anderson lived. The Supreme Court held there was sufficient evidence to support the lower court’s findings in this regard.

            Porter’s plan involved Anderson working full-time as a supervisor or manager and the median annual wage in the area of farming, fishing, and forestry was $49,100. The Court held that Porter’s plan would place Anderson into employment making similar wages prior to the injury and “in a field that would be compatible with his age, education, and aptitude.”

            Since the plan “was reasonably necessary to restore Anderson to suitable employment, the [compensation] court did not err in ordering that Anderson was entitled to participate in it.”

For employers

            When you have an employee claiming a workplace injury or are facing issues with regarding an employee’s claim to benefits following an injury, engaging an experienced workers’ compensation attorney is vital.

Durational terms in an offer created an employment agreement—not at-will employment

In an employee’s appeal, the Nebraska Court of Appeals recently considered an offer of employment, whether its acceptance by the employee created a valid employment contract, and whether the employer had cause to revoke the offer upon learning new information. The trial court had ruled for the employer as a matter of law, but the Court of Appeals recently sent the case back down to the trial court so a jury can decide these issues. Read on to learn more!

Background

    Paula Crozier (“Crozier”) was employed as executive director of a nonprofit organization. She resigned from that position in March of 2014. She then applied for the position of marketing and communications director at Brownell-Talbot School (“Brownell”). During an interview for the positon, Crozier was asked why she left her previous employment. She answered, “due to differences in business practices and ethical standards.” 
    Crozier was offered the position, and Brownell sent an offer letter for her to sign and return. The letter stated that Crozier would be hired for a twelve-month position but then stated her period of employment would be May 5, 2014 to July 30, 2015, a period of about fourteen months. The letter also stated that Crozier would receive an annual salary of $55,000 and made reference to various benefits that Crozier would receive after two years of employment.
    The letter was sent by Brownell on April 28, 2014 and was signed and returned by Crozier on April 29, 2014. On May 1, 2014 Brownell made an announcement that it had hired Crozier.
    On May 2, 2014 a newspaper article was published that described several issues involving Crozier’s former employer. The issues included billing and management problems and a failure to respond to an allegation of sexual abuse by an employee. Neither Crozier’s name nor any dates coinciding with Crozier’s dates of employment were mentioned in the article.
    Crozier brought the article to her direct supervisor who brought it to the attention of the head of the school. That day, the head of the school held a meeting with Crozier. At the meeting, Crozier explained she was not responsible for any of the problems and that she had resigned before the incident regarding the sexual abuse. Crozier also explained that she left her former employer upon discovering the issues that were mentioned in the article. Crozier reported the issues to the attorney general and the Department of Health and Human Services.
    Later that day, Brownell retracted the offer to Crozier over fears of public relations and damage to its reputation.
    Crozier filed a complaint against Brownell alleging a breach of contract and lack of good cause to revoke the offer of employment.

District Court Proceedings
    The district court found that the “durational terms in the letter were ambiguous and there was no clear intent sufficient to overcome the presumption of at-will employment.” The district court also found that Brownell had good cause in revoking the offer to Crozier. Subsequently, Crozier appealed.

Court of Appeals’ Ruling
    a.  Contract of Employment. The court noted that a contract is considered ambiguous “when a word, phrase, or provision in the contract has, or is susceptible of, at least two reasonable but conflicting interpretations or meanings.” Here, the court determined that the contract was in fact ambiguous. The contract identified Crozier’s job as a “twelve-month position” and conferred an “annual salary” but then stated the term of Crozier’s employment will last from May 5, 2014 to June 30, 2015, a total of 14 months. The court stated that there is no way to read the letter that “can reconcile these conflicting durations, which stand in direct contradiction of one another.” Since a term in the contract was susceptible to two different interpretations, evidence beyond just the terms of the contract could be considered to construe the parties’ actual agreement. 
The court then considered the testimony of Brownell’s director of business and finance. He stated that the reference to the 12 month period was in order to distinguish Crozier’s employment from that of a 10-month or 9-month employee. He further specified the salary stated in the offer was for determining Crozier’s monthly rate of pay. 
The court concluded that, in light of this testimony, a jury could find Crozier was to be employed for a definite term from May 5, 2014 to June 30, 2015 for a specific rate of pay. As a result, the question of breach of contract should have proceeded to the jury, and the court of appeals reversed the trial court’s decision.
    b.  Good Cause for Revoking Offer
    The court clarified that an employer can terminate an at-will employee at any time for any reason but if an employee is contracted for a defined term, that employee “cannot lawfully be terminated prior to the expiration of that term without good cause.” The court defined “good cause” in terms of what a reasonable employer would determine to be a good reason for terminating an employee. 
    The court determined that reasonable minds could differ as to whether Brownell revoked its offer to Crozier for good cause. Brownell stated that it terminated Crozier out of public relations concerns and that it could harm its reputation. Crozier presented evidence that her name was not mentioned anywhere in the news article and those allegations stated in the article were the reason she resigned from her previous employment in the first place. As a result, this issue should also have been left to a jury to decide. 
    The matter will be returned to the district court for trial of these issues to a jury.
Crozier v. Brownell-Talbot School, 25 Neb. App. 1 (2017).

Takeaway for employers
    Placing temporal terms on an offer of employment can transform what might otherwise have been an offer of at-will employment. Think carefully about crafting offer letters and involve your legal counsel for any special circumstances when offering new employment or renewing employment.
Bonnie Boryca can be reached at boryca@eslaw.com or (402) 397-2200.

Can’t Tell the Difference? Eighth Circuit distinguishes protected concerted efforts from employee disloyalty and malice

   Whether you employ unionized employees or not, Nebraska employers must be aware of the concept of protected concerted activity under the National Labor Relations Act. Employees who engage in concerted (i.e., joint) efforts with co-workers to address their working conditions or terms of employment, may be engaging in conduct protected by federal law. Terminating or disciplining because of that conduct can give rise to an unfair labor practice charge before the National Labor Relations Board. Recently, the Eighth Circuit Court of Appeals (whose decisions govern Nebraska employers) recognized the difference between protected concerted activity and employee conduct that is disloyal, reckless, or maliciously untrue—and not protected. Read on to better understand the important distinction!
Background
    MikLin Enterprises (“MikLin”) owns and operates ten Jimmy John’s sandwich shops in the Minneapolis-St. Paul area. Michael Mulligan is the owner and co-owner and Robert Mulligan is the vice-president. MikLin workers started an organizing campaign, attempting to gain union representation by the Industrial Workers of the World (“IWW”).   
    As part of the campaign, employees demanded paid sick leave. The MikLin handbook stated that MikLin did not allow people to simply call in sick  ̶  they were required to find their own replacements for any time off. The IWW began posting on community bulletin boards in MikLin stores. These posters contained two identical Jimmy John’s sandwiches next to each other and stated above one sandwich:  “Your sandwich made by a healthy Jimmy John’s worker,” and above the other identical sandwich: “Your sandwich made by a sick Jimmy John’s worker.” Below the sandwich was the question, “Can’t tell the difference?” followed by:  “That’s too bad because Jimmy John’s workers don’t get paid sick days. Shoot we can’t even call in sick.” 
MikLin managers quickly removed the posters from the stores.   IWW dispersed a press release, posters, and a letter to over 100 media contacts.  It discussed “unhealthy company behavior” and concluded by threatening that if Robert and Michael Mulligan would not meet with the IWW supporters to discuss their demands, “dramatic action” would be taken and they would display their posters around the city. Within the letter, there was an assertion that MikLin stores committed health code violations daily. The letter went on to state that because of the sick leave policy, MikLin was jeopardizing the health of their customers.
    Four IWW organizers met with Mulligan, and he stated that MikLin was in the process of amending its policies. The new policy involved a point system for absences. If an employee received four disciplinary points in a twelve-month period, he or she would be terminated.  This new policy stated that employees were not allowed to work until any flu-like symptoms had subsided for a 24-hour period.
    After the implementation of the new policy, the IWW supporters followed through with their threat but this time created posters with Mulligan’s phone number on them, encouraging people to call him. Mulligan and store managers removed these posters and Mulligan fired six employees who organized the campaign and delivered written warnings to three others who aided in the attack.  This gave rise to charges of unfair labor practices.
NLRB Finds an Unfair Labor Practice
    The Administrative Law Judge with the National Labor Relations Board, ruled that MikLin violated Sections 8(a)(1) and 8(a)(3), of the National Labor Relations Act, which protects concerted  activities of employees  ̶   “Section 7 of the NLRA protects employee communications to the public that are part of and related to an ongoing labor dispute.” Employee communications are not protected if they are “disloyal, reckless, or maliciously untrue.” To lose protected status, the employee communications must have been made with a “malicious motive” or have been “made with knowledge of the statements’ falsity or with reckless disregard for their truth or falsity.”
    The ALJ determined that the posters, press release, and letter were all related to the ongoing labor dispute as they dealt with the sick leave issue. Although the posters were not literally true (employees could call in sick; they just had to find coverage for their missed shift), employees were disciplined if they failed to find a replacement.  Therefore, it was a “protected hyperbole,” or somewhat exaggerated truth.
    The ALJ also found that, even though MikLin had only been investigated twice by the Minnesota Department of Health for food borne disease, it was possible that MikLin’s sick leave policy could increase the risk of food borne disease.  Again, that statement was considered to be true or hyperbole.
    The ALJ ruling then went to the NLRB.  A divided NLRB affirmed the ALJ’s conclusions. It determined that the posters were clearly related to the ongoing labor dispute over the sick leave and the statements were not “so disloyal, reckless, or maliciously untrue so as to lose the Act’s protections.”
The Eighth Circuit Declines to Enforce Much of the NLRB’s Ruling
(1)    “Sick Day” Poster Issues
The court noted that an employer commits unfair labor practices if it terminates an employee for engaging in activities that are protected under the NLRA, including  communications to third parties or the public that are utilized to improve their position as employees. But, Section 10(c) of the NLRA allows employers to terminate employees for cause.
    Courts have determined that disloyalty to an employer amounts to “cause” under Section 10 (c).  In determining disloyalty, the central question is “whether employee public communications reasonably targeted the employer’s labor practices, or indefensibly disparaged the quality of the employer’s product or services.” The former is protected and the latter is not. The court also stated that an employee’s disloyal statements can lose protection under section 7 of the NLRA without a showing that the statements were made with actual malice.
    Here the court agreed with the NLRB that the sick day posters, press release, and letter were related to other section 7 protected concerted activity intended “to improve the terms and conditions of their employ by obtaining paid sick leave.” However, the court determined that the posters, press release, and letter were not protected because they were a “sharp, public, disparaging attack upon the quality of the company’s product and its business policies.” This was evidenced here by the fact that the posters, press release, and letter were done to convince customers that they may get sick if they eat a Jimmy John’s sandwich, attacking the product itself.  An allegation that a food industry employer is selling unhealthy food is the “equivalent of a nuclear bomb” in a labor-relations dispute.  The nature of the attack was likely to outlive, and also unnecessary to aid, the labor dispute.
    The court also determined that claims about the sandwiches were “materially false and misleading.” The press release and the letter claimed that MikLin committed health code violations daily, putting customers at risk of getting sick. The court stated that these were not true statements, evidenced by MikLin’s record with the Minnesota Department of Health over ten years and requiring employees to call in sick if they have had any flu-like symptoms in the previous 24 hours.
    In sum, MikLin had cause to terminate and discipline the employees involved.  
(2)     Facebook Postings by MikLin Supervisors  
The Eighth Circuit considered other aspects of the NLRB ruling.  As the IWW began organizing, a MikLin employee created a “Jimmy John’s Anti-Union” Facebook page. On this page, MikLin employees posted disparaging comments about an IWW supporter. The ALJ determined that these posts violated section 8(a)(1) of the NLRA by encouraging harassment of the IWW supporter, which the NLRB affirmed.
    The appeals court determined that the public disparagement and degradation of the union supporter “restrained or coerced MikLin employees in the exercise of their section 7 rights” out of fear they would suffer similar treatment if they chose to support the IWW.  Thus, this aspect of the NLRB ruling was enforced.
(3)    Removal of In-Store Union Literature
After losing the first election, the IWW had filed unfair labor practice charges and objections to the election with the NLRB. MikLin and the IWW settled by stipulating to set aside the election and hold a re-run election.  After this, a MikLin employee posted a notice on a bulletin board to the employees (pursuant to the settlement) of the settlement and what it meant. A union supporter posted next to this notice an IWW “FAQ about the Union Election & Settlement.” The IWW post was taken down repeatedly.  The ALJ had determined that this was a violation of section 8(a)(1) of the NLRA, and the NLRB affirmed.
    The court enforced the NLRB’s order on this issue.  Section 8(a)(1) protects employees’ rights to “bargain collectively through representatives of their own choosing.” Removal of the IWW poster interfered with union supporters’ right to communicate about their organization in violation of section 7 of the NLRA. 
Miklin Enterprises, Inc. v. NRLB, Nos. 14-3099 & 14-3211 (8th Cir. July 3, 2017).
Bottom Line for Employers
    If you face efforts from employees that may deal with their working conditions or terms of their employment but believe they may be acting in a disloyal, reckless, or malicious way, contact your employment and labor attorney to fully discuss the issue.

Bonnie Boryca may be reached at (402) 397-2200 and boryca@eslaw.com.