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HOTEL BUSINESS REVIEW

DECEMBER FOCUS: Hotel Law

 

Key NLRB Decisions Shaping Labor Relations in 2023

By Jacqueline Voronov Partner, Hall Booth Smith, P.C. | December 2023

In 2023, the National Labor Relations Board (NLRB) has handed down significant decisions that have far-reaching implications for both employers and employees.

Many employers don't give a second thought to the NLRB, much to their peril, because more than 90 percent of all non-public employees do not belong to unions.

However, both union and non-union employers must always be mindful of compliance with the National Labor Relations Act ("NLRA") because the board's recent aggressive enforcement efforts among non-union employers are unprecedented and can no longer be ignored.  It is clear that non-union employers' policies and procedures are now much more likely than ever to draw the attention of the NLRB.

Non-Disparagement And Confidentiality Clauses Are Illegal In Severance Agreements

Numerous companies tender severance agreements to employees when they are separated from employment under various circumstances. These agreements routinely contain releases of claims that seek to resolve most potential claims a former worker may have against an organization. Severance agreements also typically include confidentiality provisions that preclude an employee from disclosing the financial terms of the agreement, as well as provisions that prevent the former employee from disparaging the company to third parties.  Until this year, nothing about this was improper.

With its February 21 decision in McLaren Macomb, the NLRB's Democratic majority overturned the board's Baylor University Medical Center decision, ruling that a severance agreement violates the NLRA if its terms tend to interfere with workers' organizing rights. In other words, companies that make former workers promise not to disparage their former employers in exchange for a severance payment are breaking federal law. What's more, it is also illegal to prevent employees from disclosing the terms of their severance packages, the NLRB said.

In the McLaren decision, the board's general counsel asserted that the non-disparagement and confidentiality provisions of the agreement unlawfully restrained and coerced the furloughed employees in their exercise of their rights under Section 7 of the NLRA, which guarantees all employees (both union and non-union) "the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection."

The board ruled that the provisions are too broad and "tend to chill the exercise of employees' rights to band together to improve the workplace." In fact, the severance offer "is itself an attempt to deter employees from exercising their statutory rights, at a time when employees may feel they must give up their rights in order to get the benefits provided in the agreement."

Companies that use severance agreements should not expect these provisions to hold up if the matter gets in front of the board, even if they are otherwise lawful under state law.

Union Organizing Activities

The NLRB has also issued decisions that impact union organizing activities, which can be particularly relevant in the hospitality industry where labor unions are active.

In a radical ruling on August 25, the NLRB announced a new framework for determining when employers are required to bargain with unions without a vote among the employees. In doing so, the NLRB overturned over 50 years of precedent, creating a new process that puts employers at a significant disadvantage. This decision is particularly significant for non-union employers because it makes it easier for unions to organize unrepresented employees.

Previously, when a union approached an employer with a demand to be recognized as the representative of its employees, the employer could refuse that request. The union would then need to file a petition with the NLRB for a secret ballot election among the employees to determine whether a majority wanted to be represented by the union, putting the onus on the union to file a petition with the NLRB and prevail in a secret ballot election to become the certified representative of the employees.

In Cemex Construction Material Pacific (Cemex), 372 NLRB No. 130 (2023), the NLRB upended that process. Under the new Cemex framework, when a union presents an employer with a demand to be recognized, the employer must either (i) recognize the union as the employee representative without an election and bargain with it over wages, hours and other terms and conditions of employment; or (ii) promptly (i.e., within two weeks of receiving the union's demand) file with the NLRB what is called an "RM petition" for an election to test the union's majority status or the appropriateness of the proposed bargaining unit (unless the union has filed its own petition for an election).

If an employer fails to take either of these steps within two weeks of receiving the union's demand, the union may file an unfair labor practice charge with the NLRB, and if it establishes majority support in that unfair labor practice proceeding (presumably through union authorization cards), the NLRB will issue a bargaining order requiring the employer to recognize and bargain with the union without an election.

The new Cemex standard effectively flips the long-standing process of seeking an election on its head. The burden is now on the employer to petition the NLRB for a secret ballot election. If an employer does not do so within the 14-day time limit, the NLRB will certify the union based on signature cards alone and demand that the employer begin collective bargaining. Worse still, if the NLRB decides that the employer committed any unfair labor practice during the election window, the board will reject the petition altogether and, rather than re-running the election, certify the union based on signature cards alone.

Expanding Employee Rights in Social Media

One of the notable NLRB decisions in 2023 involves the expansion of employee rights in the realm of social media. Employees are increasingly using various types of social media to discuss workplace issues, ranging from generalized gripes about their jobs to specific criticism of supervisors and working conditions. To push back, employers often promulgate policies and rules that restrict their employees' use of social media, particularly while they are at work.

The NLRB made national headlines in late 2010 when its Office of the General Counsel instructed an NLRB regional office to prosecute an unfair labor practice (ULP) complaint against an employer that disciplined an employee for posting comments critical of her supervisor on Facebook, allegedly in violation of the company's internet and blog posting rule. The NLRB considered the posting protected concerted activity. The case ultimately settled, but the media attention spurred many more employees, both unionized and non-unionized, to file ULP charges.

The NLRB recently doubled-down on its position that employees have the right to discuss workplace conditions, wages and other employment-related matters on social media platforms without fear of retaliation from their employers. As such, employers must be cautious about implementing policies that restrict employees' social media activities, as overly broad restrictions may run afoul of the NLRB's guidelines.

Expanding Employee Access To Email Systems

Another notable NLRB decision in 2023 expanded employee access to employer-provided email systems for the purpose of engaging in protected concerted activities, including union organizing efforts. This decision builds on the Caesar's Entertainment ruling from a few years earlier and reinforces employees' rights to use company email systems for organizing and discussing workplace issues.

For employers, this decision means they must adapt their email use policies to accommodate these expanded rights. It may lead to increased union organizing efforts through company email systems, potentially affecting the labor landscape.

Employee Handbook Policies

Finally, with its August 2 decision in Stericycle, Inc., 372 NLRB No. 113 (2023), the NLRB left employers everywhere scrambling to review their handbooks.

Stericycle adopted a new employee-friendly standard for determining the legality of work rules, such as using company equipment for personal communication. Under Stericycle, an employer policy or rule is presumptively unlawful if an employee could reasonably interpret it to have a coercive meaning that in any way limits Section 7 rights to engage in concerted activity. Under this new NLRB standard, workplace policies that may have been written with no intended connection to labor law could be found unlawful, because intent is no longer a consideration.

Under the new Stericycle standard, employers can promulgate and maintain workplace rules as long as they are narrowly tailored to "advance legitimate and substantial business interests" and minimize the risks of interfering with workers' rights to act collectively. Similar to the old 2004 Lutheran Heritage standard, employer rules and policies can and likely will be ruled unlawful if the NLRB believes that an employee can reasonably interpret them as restricting their Section 7 rights, even if there is a complete absence of evidence that any employee ever interpreted them in such a way. The board indicated that this new standard is to be applied retroactively, and this new standard applies to both union and non-union workplaces. 

In the hospitality industry, where employee handbooks are essential for setting workplace expectations, employers must ensure their policies do not infringe on employees' rights to discuss workplace conditions and engage in protected activities.

Conclusion

While the NLRB's commitment to protecting employee rights is essential, it is crucial to recognize that a one-sided, employee-centric approach may have unintended consequences. Critics contend that such an approach can stifle employer rights, impede economic growth, create complex and lengthy legal processes and foster adversarial workplace relationships.

Balancing the interests of both employers and employees is a challenging but necessary endeavor. A more nuanced and equitable approach that considers the needs of all stakeholders may lead to more productive and harmonious labor relations. Ultimately, the NLRB's role should be to foster an environment where both employers and employees can thrive while maintaining the principles of fairness and justice in the American workplace. Whether we can actually get there, however, remains to be seen.

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Hotel Newswire is a newswire service that distributes press releases on behalf of our users. If you decide to submit a press release for distribution through our system we will transmit your entire press release including any personal information therein contained to our media contacts and online distribution points including search engines. This is the only redistribution of your information that we engage in. Your submission of press releases through our system indicates consent with this policy. The information we collect during your registration process is used to notify users about updates to our service and inform users of any special events hosted by Hotel Newswire. This information is not shared with other organizations for commercial or non-commercial purposes.

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If you feel that this site is not following its stated information policy, you may contact us.

Lindsay Taylor Starting a Green Revolution
  • By Lindsay Taylor, Head of Delivery - UK, Deepki

    • In 2020 the Sustainability Hotel Alliance found the hospitality sector to be responsible for 1% of global carbon emissions, of which hotels account for around 21%. Three years later and the Deepki ESG Index, which represents the first publicly available European benchmark measuring real estate's environmental performance using real data, reveals that in the past year hotels are the only sector to see an increase in energy consumption, largely due to the sector's recovery following the pandemic. This makes hotels - along with healthcare - the highest emitter of carbon, in Europe with emissions of 39 kgCOeq/m² for...

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Maliha Aqeel Why Purpose-Driven Employee Engagement is Mission Critical for Hospitality Brands
  • By Maliha Aqeel, Founder & CEO, The Ideas Collective Inc.

    • Studies show that most employees prefer to work for brands that align with their values and have a purpose that goes beyond profit. Employees who work for brands that position themselves as socially responsible and purposeful are 12 times more likely to recommend their organization as a great place to work. In industries where direct interactions with employees heavily influence customer experience, an engaged workforce can be a competitive differentiator. The hospitality industry thrives on people, and employees are at the core of every customer experience. From front-desk staff and concierge teams to chefs and housekeeping personnel, employees deliver...

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Drew Yancey How Outdated Hotel Value Propositions are Undermining Impact
  • By Drew Yancey, CEO, Teleios Strategy

    • The hospitality industry is at an inflection point. Long defined by traditional promises of luxury, comfort, and convenience, the sector is now being reshaped by evolving guest expectations, intensifying competition, and increasing operational complexity. These shifts demand a fundamental reevaluation of how hotels present their value to the market. Unfortunately, many hotels are failing to adapt, clinging to outdated value propositions that no longer resonate with modern travelers. A hotel’s value proposition is the cornerstone of its brand promise—a clear declaration of why guests should choose it over competitors. Yet, as traveler preferences have changed, many hotels have...

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Cathy O'Brien The Healing Power of Touch: Oncology Care as an Asset to Hotel Spas
  • By Cathy O'Brien, Chief Executive Officer, NATUROPATHICA

    • According to the American Cancer Society, over 2 million people in the US will be diagnosed with cancer in 2025, a continued upward trend from 2024 cases. While researchers are still hard at work to find a cure, modern medicine has been able to greatly decrease losses from cancer through chemotherapy and radiation treatments. Though these life-saving treatments are a medical marvel, we also know the toll they take on the body. As spa operators, we aim to create environments of healing, and oftentimes, we approach this through the lens of mental well-being or the minor aches and...

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Kim Lawton 4 Trends Shaping the Future of Hotel Experiences and How to Best Monitor Customer Loyalty
  • By Kim Lawton, Founder & CEO, Enthuse Marketing Group

    • Traveling is so much more than the "where" of it all. The "what" has grown in importance over the last few years, especially in the age of personalization. People aren't just traveling to a given destination. They're traveling for the experience, and a large part of that experience hinges on their accommodations and its offerings - a fact not lost on most brands in the hospitality industry. In recent years, an increasing number of hotels have been revamping their offerings to better align with the expectations of the modern traveler, all in an effort to redefine the traditional stay and...

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Jennifer Nagy Trustonomics: the Currency of Success in the Hospitality Tech Industry
  • By Jennifer Nagy, President, JLNPR Inc.

    • Especially in today’s increasingly competitive hospitality technology market, trust and credibility is one of the most important factors in ensuring profitability over the long term. When a potential customer sees your company as credible and trustworthy, it can drastically shorten the sales cycle because they already know and trust your company/solution; as such, they are considered a “warm lead” and so your sales team can skip the initial “getting to know you” stage of the purchase cycle and move right into the important next steps. Customers who already trust your brand will require less convincing, more readily accept...

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Bendegul Okumus What Gen Z Wants from Hotels: Operational Insights for Hospitality Leaders
  • By Bendegul Okumus, Professor, University of South Carolina School of Hospitality & Tourism Management

    • In an increasingly competitive hospitality environment, guest satisfaction is the basis of a customer’s loyalty to a brand and a hotel’s long-term revenue growth. Hotels require feedback from guests to facilitate the positioning of their service delivery and guest experiences against the brand and competitor standards, identify employee performance issues that can negatively impact reviews before they are posted online, identify potential upselling and loyalty engagement opportunities, and develop further employee training and incentive strategies that drive operational excellence. Although online reviews are helpful, they are often afterthoughts influenced by the extreme perspectives of highly satisfied or completely dissatisfied...

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