National Labor Relations Board (“NLRB”) Scrutinizes Employer Handbook and Other Written Policy Language of Private Non-Union Employers
Section 7 of the National Labor Relations Act (“NLRA”) guarantees employees “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,” as well as the right “to refrain from any or all such activities.” One of the great misconceptions in the business world is that the NLRA does not apply to private employers who are non-union. The NLRA applies to both union and non-union private sector employers and is regulated by the National Labor Relations Board (“NLRB”) as well as the federal courts. Generally, disputes in this area arise when a private non-union employee has been disciplined, suspended and/or terminated for violation of company policies and procedures which have been generally noted in employer handbooks.
Recent rulings of the NLRB include the following handbook provisions and/or written policies and procedures that were deemed unlawful under the NLRA:
- Provisions defining “confidential information” as “personnel information, including, but not limited to, all personnel lists, rosters, personal information of co-workers” and “personnel information such as home phone numbers, cellphone numbers, addresses and email addresses.”
- A blanket rule that bars employees involved in worker misconduct probes from discussing the proceedings with their colleagues.
- Language that called for “courtesy” on the part of employees.
- “At-Will” employment clause that states the employment relationship cannot be amended, modified or altered in any way.
- A general policy that suggests that employees must first take a complaint through an open-door policy, dispute resolution or human resources and does not allow employees to complain to each other or outsiders (e.g. NLRB).
- No-loitering rules after finishing a shift.
- Statements that indicate that the employer is “non-union.”
- Dissemination of information during non-work hours or in break rooms.
- Requiring employees to represent a company in a “positive and professional manner” and to “avoid negative comments.”
- Certain types of social media postings.
When it comes to employer handbooks and/or other written policies and procedures there is no substitute to having those documents reviewed periodically by trained professionals such as legal counsel.
2015 Firm Highlights
The following summarizes cases and/or legal matters handled by the Seidell Law firm for the year 2015. This list in non-exhaustive and does not represent all legal matters handled by the firm.
- Represented and resolved multiple wrongful discharge cases on behalf of employees
- Represented and resolved multiple employment related matters on behalf of employers
- Resolved several unemployment fraud cases with favorable rulings to the employee
- Resolved several administrative individual licensing matters before state government agencies
- Drafted and/or reviewed multiple corporate employee handbooks, forms, policies and procedures
- Handled multiple buy/sell transactions on behalf of the seller or buyer
- Litigated and settled a breach of contract case between two companies involving failure to pay past due rent
- Drafted and reviewed business and employment contracts covering a wide range of industries
- Represented employees and employers on issues before the EEOC, MDCR and wage and hour
- Handled multiple federal trademark filings
Starting a Michigan Business-Things to Consider
There are many things to consider when starting a business in Michigan. Although the list below is non-exhaustive, these items, in addition to your business plan, pertain to areas covering the law, taxes and insurance. When working your business plan, you should also incorporate these items into your overall start-up costs.
- Business Entity Type: Commonly, there are multiple business types, including: sole proprietorship (e.g. dba), partnerships, limited liability company and corporations. From a legal perspective, lawyers generally avoid the use of a sole proprietorship and partnerships as they drastically increase your personal liability. In addition, there will be certain tax implications and requirements depending on the entity you form.
- Business Legal Documents: Many businesses that form either an LLC or corporation, especially when multiple owners are involved, will also need business related documents such as an operating agreement or bylaws, restrictive covenants, and a buy-sell agreement.
- Business Insurance: There are multiple types of insurances available for each business and certain businesses may require specific insurance as it relates to their specific industry. A thorough discussion with a property and casualty independent insurance agent is a must when starting a business.
- Business License and Regulations: Some types of businesses require a special license and/or require the owner to have a license (e.g doctor, lawyer, etc.). Further analysis should be conducted to determine what licenses you may need from a local, state and/or federal level before you conduct business. In addition, many types of businesses are regulated by local, state and federal laws and a thorough review of these laws should be conducted.
- Business Tax Registration. You will want to determine, based on your business, whether or not you need to file for business related taxes with the state, especially if your business has employees and/or sales or use taxes. A thorough discussion with your CPA should be conducted. They can also assist you in getting your federal tax ID number with the IRS.
- Businesses with Employees. If you plan on hiring employees you should consult with an employment attorney to discuss your legal requirements as an employer.
In closing, prior to starting any business you should consult with an experienced business attorney regarding any legal documents that are necessary, an experienced employment attorney if you plan on hiring employees, a CPA or accountant regarding tax matters and a property and casualty independent insurance agent for business related insurance. All three of these trusted advisors will be critical to your business success.
Human Resource Functions Critical To Any Business Operation
A human resource individual can be described as a person who “professionally” oversees the organization’s human resource management functions. This includes a wide spectrum of managing the entire employee-employer relationship, including outside forces that interact, and employment laws applicable to the workplace.
Employees are a businesses’ “most valuable asset!” Whether you have just one employee or many, the success of any business operation lies with its employees. Attracting and retaining employees is critical to any businesses’ operational success. Unfortunately, many business owners unwisely leave human resource functions to individuals who are not qualified in the area (e.g. receptionist, office manager, accounting, etc.), because the individual lacks the proper education, experience, or otherwise, which leaves the business operation vulnerable to employee litigation, increased turnover, and unhappy employees. Business operators should use a qualified individual to manage key internal human resource functions. There are three (3) key areas of human resource management which can be summed up into the following categories:
- Employee Recruitment and Retention: includes by way of example, but not limitation creating organizational roles, interviewing, job descriptions, selection and placement, assessments, and background screening
- Employee Retention and Engagement: includes by way of example, but not limitation on boarding of new employees, training and development, compensation and benefits, career and/or succession planning, performance management, and employee related issues
- HR Policies, Procedures, and Law Compliance: includes by way of example, but not limitation, HR strategy, HR tools, HR policies (e.g. employee manuals and forms), compliance with local, state, or federal employment laws, HR training, education, and certifications.
Restrictive Covenant Agreements-“Buyer Beware!”
Restrictive Covenant Agreements
Restrictive covenant agreements are a useful tool for any business wanting to protect their interests and assets with current and past employees. These types of agreements commonly involve matters concerning trade secrets, non-disclosure, non-solicitation, confidentiality, and non-competition clauses. Some of these types of agreements are stand alone or are a part of an employment contract or severance package. So long as reasonable, Michigan law allows for non-compete agreements in employment (See Michigan Antitrust Reform Act, MCL 445.774a). In general, restrictive covenant agreements attempt to restrict employees who are currently employed and after a separation of employment from doing something or not doing something that they otherwise may have had a legal right to do. The most common practice of employers is to provide a restrictive covenant agreement at the time of the offer of employment or hire, but, under current Michigan case law, employers can require employees to sign a restrictive covenant agreement after the employee has already been hired. Far too often, employees are too eager to take an offer of employment and/or want to continue their employment with a business and, unfortunately, employees do not spend enough time reviewing these restrictive covenant agreements, and, it’s not until they separate their employment with a business do they realize the quagmire they might be in, especially in cases involving non-competes. Before signing any of these types of agreements, individuals should seek legal counsel for advice. .
Federal Trademarks: Protecting Your Business Name, Logo, Products or Services
A trademark is a brand name. A trademark or service mark includes any word, name, symbol, device, or any combination, used or intended to be used to identify and distinguish the goods/services of one seller or provider from those of others, and to indicate the source of the goods/services. Although federal registration of a mark is not mandatory, it has several advantages, including notice to the public of the registrant’s claim of ownership of the mark, legal presumption of ownership nationwide, and exclusive right to use the mark on or in connection with the goods/services listed in the registration. Federally registered trademarks are national in scope, regardless of the actual geographic use made by the mark.
Advantages To Having a Federally Registered Trademark
Additional substantive benefits received through federal registration include, but are not limited to:
- The ability to recover profits, damages and costs for infringement, including the possibility of receiving treble damages in certain circumstances;
- The ability to recover attorneys’ fees in infringement actions;
- The right to use the ® symbol in connection with the mark, which may deter potential infringers;
- Federal registration also makes it easier to prove an allegation of trademark infringement by providing prima facie evidence of trademark ownership and use.
The law firm of Seth T. Seidell provides federal trademark legal services at reasonable and affordable fixed rates.