July 7, 2017

Court of Appeals Upholds Jimmy John’s Franchisee’s Termination of Employees Who Publicized Misleading Claims about Their Employer

BY: Thomas Lenz, L. Brent Garrett

On July 3rd, the U.S. Court of Appeals for the Eighth Circuit decided a case involving the interplay between Sections 7 and 10(c) of the National Labor Relations Act (NLRA). On the one hand, employers may not discharge employees for engaging in activities protected by Section 7 of the NLRA, including employees’ communications to third parties or to the public that seek to improve their lot as employees. On the other hand, Section 10(c) of the NLRA forbids the National Labor Relations Board (NLRB) from reinstating employees who were discharged for cause. In the case at issue, employees had distributed press releases and posters suggesting that its employer’s sandwiches posed a health risk to consumers because the workers who made them were not allowed sick leave. The employees’ communications to the public were made to further their efforts to get better sick leave, but they also disparaged their employer.

In MikLin Enterprises, Inc., dba Jimmy John’s v. NLRB, __F.3d __ (8th Cir. 2017)(en banc), 2017 WL 2835648, ten circuit court judges reversed a decision made by a three-judge panel of the same court. The full appellate court ruled that MikLin Enterprises, a Jimmy John’s franchisee in Minnesota, did not violate the NLRA when it discharged and disciplined employees who took disloyal actions in order to further their goal of unionizing and obtaining better sick leave policies. The court held that “the means the disciplined employees used in their poster attack were so disloyal as to exceed their right to engage in concerted activities protected by the NLRA.”

The court stated that the employees falsely disparaged MikLin with claims that its employees could not take sick leave and that health code violations occurred at MikLin stores every day. It concluded that the employees had disseminated communications to the public that were so disloyal, reckless, or maliciously untrue as to lose the NLRA’s protections.

The court held that the critical 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 furthers the policy of the NLRA, the latter does not.” The court concluded that the communications disparaged the employer and, therefore, termination of the employees was in accordance with the NLRA.

As the court acknowledged, its ruling conflicts with a recent decision from the D.C. Circuit Court of Appeals, DirecTV, Inc. v. NLRB, 837 F.3d 25 (D.C. Cir. 2016). Thus, the U.S. Supreme Court may be encouraged to take up the issue of the interaction between NLRA sections 7 and 10(c), an issue it last visited in its Jefferson Standard case in 1951.

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CATEGORIES: NLRA, NLRB

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Author(s)

Thomas Lenz

Thomas Lenz

Partner

(626) 583-8600

tlenz@aalrr.com

Thomas Lenz is a partner handling all aspects of labor and employment law issues from the firm’s Pasadena and Cerritos offices. He heads the firm’s traditional labor and National Labor Relations Board practices. He works with employers in all major industries across California and the West. Mr. Lenz currently serves on the Executive Committee of the Labor and Employment Section for the State Bar of California. He also serves as a Lecturer in Law, teaching at the USC Gould School of Law.

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L. Brent Garrett

L. Brent Garrett

Partner

(562) 653-3200

bgarrett@aalrr.com

Brent Garrett is a partner in the firm's Cerritos and Irvine offices and is a member of the firm’s Private Labor and Employment Group. He exclusively represents management in labor and employment matters. He is also a frequent contributor to the Firm’s Labor Relations Blog, providing analysis and commentary about new developments in the area of traditional labor law.

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