February 09, 2015 Practice Points

D.C. Circuit Requires NLRB to Reconsider Hat Policy Decision

Given the board’s recent decisions, it will be interesting to see how many additional cases find their way to the courts in the future.

By Charn Reid – February 9, 2015

The National Labor Relations Board (NLRB) in February 2014 concluded that an employer’s hat policy violated section 7 of the National Labor Relations Act (NLRA) because the policy prohibited employees from wearing baseball caps bearing union insignia. On January 16, 2015, the U.S. Court of Appeals for the District of Columbia Circuit determined that the board reached its decision too hastily, and remanded the case back to the NLRB for reconsideration.

The employer, World Color (USA) Corp., is a wholly-owned subsidiary of Quad/Graphics, Inc. The policy at issue, which was enacted as part of a broader employee-safety provision, mandated, in relevant part, that “[b]aseball caps are prohibited except for Quad/Graphics baseball caps worn with the bill facing forward.” In response to the new policy, the Graphic Communications Conference of the International Brotherhood of Teamsters filed an unfair-labor-practice charge with the NLRB, alleging that the policy interfered with employees’ rights under the NLRA to engage in concerted activities for the purpose of collective bargaining.

An administrative-law judge (ALJ) determined that the employer’s hat policy violated the employees’ rights to wear union insignia at work and that World Color had failed to establish the existence of any special circumstances—such as, for example, employee safety, concerns about gang activity, or employee appearance—justifying enforcement of the policy. The ALJ then recommended an order prohibiting World Color from enforcing what the ALJ referred to as a “discriminatory” hat policy. World Color opposed the ALJ’s decision and the case was referred to a three-member panel of the NLRB for consideration.

The NLRB panel struck the portion of the ALJ’s order referring to the hat policy as discriminatory and, instead, based its decision on what it referred to as the policy’s overbreadth. Notably, the board’s overbreadth determination was premised upon its conclusion that it was “undisputed that the policy on its face prohibits employees from engaging in the protected activity of wearing caps bearing union insignia.” The NLRB accordingly ordered World Color to rescind its hat policy, draft a revised policy, and post a notice at its facility informing employees that the NLRB found that World Color had violated federal labor laws.

Upon World Color’s petition for review, the U.S. Court of Appeals for the District of Columbia Circuit took exception to the NLRB’s main conclusion as to the hat policy’s “undisputed” prohibition, on its face, of the wearing of a hat bearing union insignia. In particular, the appeals court found that the board should have applied the two-step inquiry set forth inGuardsmark, LLC v. NLRB, 475 F.3d 369 (D.C. Cir. 2007). The Guardsmark inquiry first requires the board to examine whether the policy at issue explicitly restricts section 7 activity; if it does, the policy violates the NLRA. If the policy does not explicitly restrict protected activity, then the board must apply the second step of the inquiry, and consider whether (1) employees would reasonably construe the language of the policy to prohibit section 7 activity; (2) the policy was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of section 7 rights.

According to the appeals court, however, the NLRB “short-circuited this inquiry at its first step by concluding that there was no dispute regarding whether the policy facially prohibited employees from wearing caps bearing union insignia.” The court then explicitly disagreed with the board, finding, instead, that “[a]lthough the policy restricts the type of hat that may be worn, it does not say anything about whether union insignia may be attached to the hat.” The court further noted that World Color’s main uniform policy permits employees to accessorize in good taste and states that the uniform policy will be applied in accordance with applicable laws, presumably signaling the employer’s intent to honor its obligations under the NLRA. Concluding that the premise upon which the board’s decision was based was contradicted by the record, the appeals court remanded the case back to the NLRB for reconsideration.

In light of the appeals court’s finding that the hat policy does not, on its face, violate the NLRA, the board, in reconsidering the legality of the hat policy, will no doubt confine its evaluation of the policy to the second step of the Guardsmark inquiry. Given the board’s recent decisions, it will be interesting to see how many additional cases find their way to the courts in the future. Stay tuned.

Keywords: litigation, employment law, labor relations, National Labor Relations Board, NLRB, National Labor Relations Act, NLRA, section 7, special circumstances, D.C. Circuit, District of Columbia, court of appeals, World Color, Guardsmark, Teamsters, union insignia, uniform policy, hat policy, baseball cap, protected activity, labor law

Charn Reid, Brooks Pierce, LLP, Greensboro & Raleigh, NC


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