A recent National Labor Relations Board (NLRB) decision pushes (to the extreme) the limits of existing state law privacy boundaries. In this expansive ruling the NLRB held that surreptitious recordings made by employees at a Pennsylvania Starbuck’s revealed National Labor Relations Act (NLRA) violations and as such justified the employee’s failure to disclose its recording efforts and gain consent of all parties as required under state law. The NLRB found that the recordings constituted concerted protected activity under the NLRA as they were made by employees attempting to document meetings with management regarding unionization efforts.

California, like Pennsylvania, is a two-party consent state making it a criminal offense to use any devise to record communications between parties unless all those taking part in the conversation consent. With this new decision, the NLRB justifies preemption of such privacy rights where employee recordings serve to further protection of employee protected activity under the NLRA.

Notably, the NLRB found that the Starbuck’s managers “knew or had reason to know” that they were being recorded but “failed to take any meaningful action in response.” In other words, the fact that the company failed to enforce its rights under Pennsylvania law or its own policy against surreptitious recording (at the time) rang hollow as a later defense to such actions. The panel found the company’s lack of action on the issue to be a key element in support of its preemption stance.

This ‘ends justify the means’ ruling signals (once again) a swing in NLRB policy in favor of pushing the limits of what it means to interfere with Section 7[1] and 8[2] rights under the NLRA.

The Agricultural Labor Relations Act (ALRA) is patterned on the NLRA and the ALRB will generally, with some exceptions, follow NLRB precedent. In anticipation of increased unionization efforts in California under AB 2183, employers should, as discussed here, familiarize themselves with NLRA prohibitions under Sections 7 and 8 to avoid allegations of interfering with, restraining, or coercing employees in the exercise of concerted protected activities.

[1] Section 7 of the NLRA states in part, “Employees shall have the right. . . to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”

[2] Section 8 of the NLRA strictly prohibits employers from engaging in unfair labor practices (e.g., interfering with employees as they engage in concerted activity)

In the 2022 case Naranjo et al. v. Spectrum Sec. Servs., Inc.,i the California Supreme Court found that meal and rest premiums payable pursuant to Cal. Labor Code section 226.7 constitute wages and – once owed – must be paid in accordance with all relevant wage and hour laws (e.g., inclusion on wage statements and paid within statutory deadlines). In ruling on the matter, the Court remanded the case to the Court of Appeal for a determination on the following questions: 

• Whether the lower court erred in finding the employer had not acted “willfully” in failing to timely pay employees’ premium pay; and  
• Whether the employer’s failure to report missed premium pay on wage statements was “knowing and intentional” under Cal. Lab. Code section 226. 

In ruling on the matter last week, the Court of Appeal affirmed the lower court’s decision that the employer’s good faith basis for failing to pay the meal premiums was not willful. Specifically, although the employer’s defensive arguments were decidedly unpersuasive, the Court found they were not unreasonably made nor were they unsupported by evidence or made in bad faith.  This reasoning was also applied (with the same outcome) by the Court as it considered the employer’s actions regarding the statute’s “knowing and intentional” standard. This ruling allowed the employer in Naranjo to avoid penalties assessed under the statute for willfully withholding final wages and knowingly and intentionally failing to provide accurate/required information on employee wage statements.  

The ruling is significant in that it settles a divisive issue among the courts as to whether a good faith defense to allegations of willfulness can also be considered when deciding whether an alleged violation was knowing and intentional. However, employers should remain cautious when relying on a good faith belief defense against failure to timely pay wages owed claims as any decision on the issue will be highly fact specific.  

The National Labor Relations Board (NLRB) has once again expanded existing precedent. Clarifying its make-whole remedy, the NLRB finds that victims of labor law violations are to be compensated for all “direct or foreseeable pecuniary harm” suffered as a result of unfair labor practices. The Board’s latest decision in Thryv, Inc. follows an NLRB Notice and Invitation to File Briefs asking parties to weigh in on whether the Board should modify its make-whole remedy. The National Labor Relations Board is tasked with enforcing laws protecting union and non-union employees’ rights to engage in protected activity under the National Labor Relations Act (NLRA).  

In expanding its make-whole remedy, the Board found that in addition to the loss of earnings and benefits, victims of unfair labor practices may incur significant financial (e.g., out-of-pocket medical expenses, credit card debt) or other costs that are a direct or foreseeable result of the alleged unfair labor practices. Determining that compensation for such losses should be part of its make-whole remedy for labor law violations, the Board explained that the General Counsel will be required to present rebuttable evidence (in the compliance proceeding) proving the amount of direct or foreseeable financial harm, and that it was due to the unfair labor practice.  

Going forward, the Board will apply this expanded standard in every case in which the Board’s recommended remedy would include make-whole relief for employees. This decision will be applied retroactively. 

Section 7 of the NLRA prohibits an employer from engaging in activities that may “interfere with, restrain, or coerce employees” in the exercise of their Section 7 rights. Under Section 7, employees have the right to unionize, to join together to advance their interests as employees, and to refrain from such activity.  Whether your workplace is unionized or non-unionized, keep these prohibitions in mind: 

An employer may not:

• Promise employees benefits if they reject the union.
• Interview employees to prepare your defense in an unfair labor practice case, unless you provide certain assurances:
  • Communicating to the employee the purpose of the questioning. assuring them against reprisals and obtaining voluntary participation.
  • Questioning will be free from employer hostility to union organization and not itself be coercive.
  • Questioning will not go beyond what is needed to achieve its legitimate purpose.  

• Distribute, maintain, or enforce work rules/policies that reasonably tend to inhibit employees from exercising their rights under the NLRA (e.g., prohibitions against employees voluntarily sharing or discussing wages). 
• Create an impression in the workplace that you are spying on employees’ union activities. 
• Photograph or videotape employees engaged in protected activities, including union activities. 

Under the Fair Labor Standards Act (FLSA), “employees may not volunteer services to for profit private sector employers” (emphasis not added) or employ minors to perform hazardous jobs. If a reminder is needed….  

A North Carolina Chick-fil-A fast food franchise was recently fined six thousand dollars for: 

• Allowing certain employees to work for meal vouchers rather than wages; and  
• Violating federal child labor regulations prohibiting the employment of minors to perform hazardous jobs.  

The franchise offered “5 free entrees per shift” to anyone willing to “volunteer” to direct traffic in the restaurant’s new Drive Thru Express and allowed employees under the age of 18 to operate, load or unload a trash compactor.  

The Department of Labor prioritizes the protection of younger workers and is committed to holding employers responsible for paying workers for all hours worked – in cash or legal tender, not chicken sandwiches.  

Below are a few reminders regarding special wage and hours provisions for California agricultural employees and employing minors in the workplace.  

California Agricultural Employees 

California Wage Orders issued by the state’s Industrial Welfare Commission (IWC Orders) govern various wage and hour issues such as wages earned, hours of work, working conditions, rest and meal periods, overtime, uniforms and equipment, minimum wage, mandatory day off, and reporting time pay.  

IWC Orders are similar to federal statues, but with important distinctions. Each IWC Order is broken down by industry or occupation. Three specific IWC Orders relate specifically to agricultural employees: IWC Orders #14, #13, #8 and #4. 

Minors in the Workplace 

State and federal child labor laws ensure minors receive access to safe occupations that do not jeopardize their health, well-being, or educational opportunities. Federal child labor laws tend to be stricter than most state laws and must be applied in all circumstances where they provide greater protection including the payment of wages.