NLRB Rules That Employee who Launched “F-Bombs” at Company Owner Did Not Lose Protection Under Federal Labor Law

If an employee curses at and blatantly disrespects the owner of the company for whom he works, most people would reasonably conclude that the employee can be discharged. However, a recent decision issued by the National Labor Relations Board (NLRB) defies this logic. In Plaza Auto Center, Inc., 360 NLRB No. 117 (May 28, 2014), on remand from the Ninth Circuit Court of Appeals, the Board concluded that an employee who made concerted complaints about compensation did not lose the protection of the National Labor Relations Act (NLRA) despite the fact that the employee dropped “f-bombs” in the face of the owner of the company. The Board’s decision in Plaza Auto Center serves as another reminder of the agency’s aggressive prosecution of alleged employer retaliation against employees for engaging in protected concerted activity, particularly in the non-union workplace.

Background

A used car salesperson who was employed by a non-union used car dealership, started questioning other employees and managers about the company’s break and compensation policies on a number of occasions soon after starting his employment. For instance, the employee questioned why salespersons were not receiving the minimum wage as a draw against commissions. At various times, his managers told him that he was free to leave if he did not like the company’s policies.

On the same day that the salesperson raised the minimum wage issue with management, he was called into a meeting with the company’s owner, Tony Plaza, and two sales managers. The meeting took place in a small office of one of the managers. Plaza told the employee that he was making a lot of negative comments that would adversely affect the sales force and that he was asking too many questions. The salesperson said that he had questions regarding vehicle costs, commissions, and employees’ entitlement to the minimum wage. Plaza told the employee that he had to follow the company’s policies, that salespeople typically do not know the dealer’s vehicle costs, and that he should not be complaining about pay. Plaza also twice told the employee that if he did not trust the company he could work elsewhere. The employee became angry and, in a raised voice, cursed at Plaza multiple times calling him a “f___ing mother f___ing,” a “f___ing crook,” an “a__h___,” and stupid. The employee also told Plaza that nobody liked him and everyone talked about him behind his back. During his outburst, the employee stood up, pushed his chair aside, and told Plaza that if he fired him, Plaza would regret it. Not surprisingly, Plaza then terminated the salesperson’s employment. 

The Atlantic Steel Analysis

An administrative law judge (ALJ), with Board approval, determined that the employee’s questioning of the company’s policies regarding breaks and compensation constituted protected concerted activity under Section 7 of the NLRA. Because the dealership discharged the employee due to his outburst at a meeting where he was also engaged in protected concerted activity, the propriety of the employer’s termination decision was analyzed under the test set forth in Atlantic Steel, 245 NLRB 814, 816 (1979). In Atlantic Steel, the Board established a four-prong test to determine whether an employee’s conduct is so egregious as to lose the protection of the Act: (1) the place of the discussion, (2) the subject matter of the discussion, (3) the nature of the employee’s outburst, and (4) whether the outburst was, in any way, provoked by the employer’s unfair labor practices. The ALJ found that the employer violated Section 8(a)(1) of the NLRA several times by inviting the employee to quit in response to his protected concerted activity—the employee’s repeated questions regarding terms and conditions of employment. However, applying the Atlantic Steel test, the ALJ ruled that although the salesperson was engaged in protected activity during the meeting with Plaza and the sales managers, he lost protection of the Act when he “repeatedly reviled [Plaza] in obscene and personally denigrating terms accompanied by menacing conduct and language.”

In the Board’s initial decision, a Board majority (consisting of former Chairman Wilma B. Liebman and Member Mark Gaston Pearce) found that the salesperson’s conduct was not so severe as to cause him to lose protection under the NLRA. The Board found that all four Atlantic Steel factors weighed in the salesperson’s favor and that the employer violated Section 8(a)(1) of the Act by discharging him.

However, on appeal, the Ninth Circuit found that the employee’s “obscene and denigrating” remarks to Plaza, which the court also found to be insubordinate, caused him to lose the Act’s protection. The court concluded that the Board erred when it found that the “nature-of-outburst” factor weighed in favor of protection. The court remanded the case to the Board so that it could “rebalance” the Atlantic Steel factors and properly consider whether the nature of the employee’s outburst caused him to forfeit the Act’s protection. 

The Board’s Second Decision

On remand, focusing primarily on the nature of the salesperson’s outburst, a Board majority (consisting of Chairman Pearce and Member Kent Y. Hirozawa) concluded that the salesperson’s outburst was not “menacing, physically aggressive, or belligerent.” In this regard, the Board found that the salesperson’s statement—that if he was fired, Plaza would regret it—was not a threat of physical harm. Further, the Board noted that the employer’s stated reason for discharging the employee was for his verbal attack against Plaza, not for any physical conduct.

The Board then rebalanced the four Atlantic Steel factors. The Board agreed with the court that the third factor regarding the nature of the employee’s outburst weighed against statutory protection. Nevertheless, the Board concluded that the employee did not lose the Act’s protection even though he used obscene and denigrating language. Despite stating that the employee’s remarks must be given “considerable weight” because the employee “targeted Plaza personally, uttered his obscene and insulting remarks during a face-to-face meeting with Plaza, and used profanity repeatedly,” the Board concluded that the other three factors (location, subject matter, and employer provocation) weighed in favor of protection outweighing the one factor weighing against protection. Notably, the Board opined that the employee’s outburst would not have occurred but for the company’s provocation, which included threats of discharge. 

Member Johnson’s Dissent

Board Member Harry L. Johnson expressed his strong disagreement with the majority opinion in a lengthy dissent. Like the ALJ, Johnson concluded that the employee’s outburst was so egregious as to cause him to forfeit the Act’s protection. Citing to Board precedent, Johnson noted that an employee engaged in protected concerted activity may be disciplined for verbal misconduct even absent physical threats and that the “the nature-of-the-outburst factor alone may carry enough weight to cause forfeiture of the Act’s protection.” Johnson acknowledged that employees are permitted “some leeway” for impulsive behavior when engaging in concerted activity. However, he argued that under the circumstances the majority went “well beyond the reasonable amount of leeway required for the protection of Section 7 activity.”

Johnson further stated that the majority’s opinion implies that “the use of vulgarities and obscenities is a reality of [the workplace].” He disagreed, stating:  “The reality of the modern workplace is that employees do not typically curse each other and their superiors like characters in a Scorsese film.” Johnson also noted the serious dilemma that the majority opinion places on employers in regard to other employment laws under which the employee’s conduct could be viewed as “harassing, bullying, creating a hostile work environment, or a warning sign of workplace violence.”

Key Takeaways

Employers should proceed with caution when disciplining an employee who is engaged in protected concerted activity. In general, concerted activity is protected under the NLRA when it involves two or more employees acting together to try to improve their wages or other working conditions. The action of a single employee can also be concerted if it involves a subject of common concern (like the salesperson complaining about the company’s compensation policy). While the Board majority excused the employee’s “f-bombs” under the circumstances of this case, an employee who behaves recklessly or maliciously in carrying out concerted activity may lose the Act’s protection.

Notwithstanding the Board’s logic-defying decision in Plaza Auto Center, employers have the right to maintain a safe and civil workplace. Employers should continue to enforce policies prohibiting insubordination, bullying, harassment, and other similar workplace misconduct. As always, employers should make sure to mete out discipline for violating workplace conduct policies in a consistent manner.

All employers—union and non-union alike—should ensure that their managers and supervisors receive appropriate training on what constitutes protected concerted activity. Further, managers and supervisors should be careful not to make statements that could be perceived as retaliating against or discouraging employees from engaging in protected concerted activity.