Wednesday, June 22, 2005

Two NLRB Members Refuse to Endorse Passavant Standard for Evaluating an Employer’s Attempt to Cure an Unfair Labor Practice

Under the NLRB’s seminal case of Passavant Memorial Area Hospital, 237 NLRB 138 (1978), an employer can “cure” its unfair labor practice by repudiating it. To be effective under Passavant, the employer’s repudiation must be timely, unambiguous, specific in nature to the coercive conduct, free from other proscribed conduct, adequately publicized to the employees involved, not followed by other proscribed conduct, and accompanied by assurances to employees that the employer will not interfere with the exercise of their rights under Section 7 of the Act. Id. at 138-39; Community Action Comm’n of Fayette County, 338 NLRB 664, 667 n.12 (2002). Thus, Passavant places a heavy burden on employers that wish to cure their violations and thereby avoid liability.

On June 16, the Board issued a decision in which Chairman Battista and Member Schaumber declined to endorse all of Passavant’s requirements for an effective cure. Claremont Resort & Spa, 344 NLRB No. 105 (2005). The employer in Claremont Resort & Spa maintained a rule prohibiting employees from engaging in “negative conversations” about coworkers or managers. Three months after implementing the rule, the employer issued a notice to employees which set forth their Section 7 rights and further stated that “We wish to make it clear that our suggestion concerning negative conversations was limited to personal attacks unrelated to business considerations or issues and that we fully recognize and have repeatedly acknowledged your right to discuss Union matters at times and in circumstances that are consistent with our lawful no-solicitation policies.”

The Board unanimously found that the employer violated Section 8(a)(1) by maintaining the rule that prohibited employees from engaging in negative conversations about coworkers or managers. All three Members agreed that the employer failed to cure the violation by later notifying employees that it did not intend its rule to prohibit them from discussing union matters. In so holding, a two-Member majority (Chairman Battista and Member Schaumber), stated that they “do not necessarily endorse all the elements of Passavant.” 2005 WL 1452400, at *1. “[W]hile not passing on all of the aspects of Passavant,” id., the majority found that the employer’s later notice was inadequate because it failed to assure employees that the rule permitted all discussions protected by Section 7 and not merely discussions about union matters.

In a footnote, Member Liebman stated that she agreed with the administrative law judge’s application of Passavant.

As noted in previous posts, the Board traditionally does not reverse precedent unless at least three Members vote to do so.