NLRB Insights For Hospitality Managers
In a region known for its lobster shacks and craft breweries, the hospitality industry is a major driver of the New England economy. Anyone who has spent time in the industry knows that staff turnover is common due to thin profit margins and less predictability than 9 to 5 careers. As hospitality industry managers and owners, understanding the legal implications of employee terminations is crucial for maintaining compliance and avoiding potential legal pitfalls. A recent decision by the National Labor Relations Board (NLRB) involving Tipsy Foods, Inc. offers valuable lessons for business owners, even those operating non-unionized establishments. This post summarizes key takeaways from the decision and underscores the importance of consulting with legal counsel before taking disciplinary actions against employees.
1. Think Carefully Before Terminating Employees for Complaints or Attitude Issues
In the case of Tipsy Foods, Inc., the NLRB found that the company unlawfully disciplined and terminated an employee, Dawn McCurdy, for engaging in protected concerted activities. McCurdy had expressed concerns about her hours and earnings, which the NLRB deemed as protected under the National Labor Relations Act (NLRA). Specifically, she complained to fellow employees about her shifts being cut and about not being able to serve the biggest-tipping areas of the store — common complaints in the industry. The restaurant felt that this disrupted morale and employees complained about her conduct. However, the act protects employees' rights to engage in concerted activities for mutual aid or protection, which includes discussing wages, hours, and working conditions with coworkers.
The key lesson here is the importance of seeking legal advice before terminating or disciplining an employee who has raised complaints about their work conditions. An attorney can help determine whether the employee's actions are protected under the NLRA and guide you in making legally sound decisions. Terminating an employee without this consultation could lead to claims of unfair labor practices, resulting in significant legal and financial consequences.
2. The NLRB's Jurisdiction Extends Beyond Unionized Workplaces
A common misconception among non-unionized businesses is that the NLRB's jurisdiction does not apply to them. However, the Tipsy Foods, Inc. case highlights that the NLRB can cite businesses for unfair labor practices regardless of their union status. The NLRA protects all employees, whether or not they are part of a union, from retaliation for engaging in protected concerted activities. With the NLRB’s broad interpretation of what constitutes protected activity, employers must be very careful. Everyone knows that there are laws in place against firing an employee on the basis of their race or gender, for example, but the types of activities that the National Labor Relations Act are much more nuanced, and frequently change as different General Counsels are politically appointed.
In this case, McCurdy's relatively routine gripes to her coworkers about her work conditions were deemed protected activities. The NLRB ruled that the company's actions to discipline and eventually terminate her for these discussions were unlawful. This decision serves as a reminder to all hospitality industry managers that their businesses are subject to NLRB regulations.
3. Document and Follow Fair Disciplinary Procedures
The NLRB's decision also emphasizes the importance of having clear, documented disciplinary procedures and following them consistently. Tipsy Foods, Inc. faced scrutiny for its handling of McCurdy's complaints and the subsequent disciplinary actions. The lack of a thorough investigation and inconsistent application of disciplinary measures were factors that contributed to the ruling against the company.
To mitigate risks, hospitality managers should ensure that all disciplinary actions are well-documented and based on established and previously-vetted company policies. Conducting fair and unbiased investigations into employee complaints and performance issues is essential. Consistency in applying disciplinary measures helps protect the business from claims of unfair treatment and reinforces a culture of fairness and transparency.
Conclusion
Tipsy Foods, Inc.’s consequences in this case were severe. It not only had to re-instate the employee with full back pay, it also had to go through the embarrassing ritual of reading a list of its violations to its employees and posting them around the restaurant. The public relations, hiring, and business consequences of such a step can impact growth and revenue for years, even if the finding of a violation was a pretty close call.
The NLRB's decision in the Tipsy Foods, Inc. case underscores the critical need for hospitality industry managers and owners to be vigilant about employee rights and legal compliance. Always consult with an attorney before terminating or disciplining employees, understand that NLRB regulations apply to all businesses, and maintain clear, documented, and consistently applied disciplinary procedures. By doing so, you can protect your business from legal challenges and foster a positive and legally compliant workplace environment.
