14-3284(L) Triple Play v. National Labor Relations Board

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 21st day of October, two thousand fifteen.

PRESENT: CHESTER J. STRAUB, BARRINGTON D. PARKER, RICHARD C. WESLEY, Circuit Judges. ______________________

THREE D, LLC d/b/a TRIPLE PLAY SPORTS BAR AND GRILLE,

Petitioner‐Cross‐Respondent,

‐v.‐ Nos. 14‐3284 (Lead); 14‐3814 (XAP)

NATIONAL LABOR RELATIONS BOARD,

Respondent‐Cross‐Petitioner. ______________________

FOR PETITIONER‐CROSS‐RESPONDENT: MELISSA A. SCOZZAFAVA, (Eric M. Grant, on the brief), Yamin & Grant, LLC, Waterbury, CT.

FOR RESPONDENT‐CROSS‐PETITIONER: HEATHER S. BEARD (Jill A. Griffin, on the brief), for Richard F. Griffin, Jr., General Counsel, National Labor Relations Board, Washington, D.C.

Appeal from the National Labor Relations Board.

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,

ADJUDGED AND DECREED that the August 22, 2014 Decision and Order of

the National Labor Relations Board is AFFIRMED.

Petitioner‐Cross‐Respondent Three D, LLC, d/b/a Triple Play Sports Bar

and Grille (“Triple Play”) appeals a decision of the National Labor Relations

Board (“NLRB” or “Board”) finding that Triple Play violated Section 8(a)(1) of

the National Labor Relations Act (“NLRA” or “Act”) by taking certain actions

against its employees, including discharge, for their Facebook activity. Triple

Play also appeals the Board’s finding that Triple Play violated Section 8(a)(1) of

the Act by maintaining an overbroad Internet/Blogging policy.

“We uphold the NLRB’s findings of fact if supported by substantial

evidence and the NLRB’s legal determinations if not arbitrary and capricious.”

Cibao Meat Products, Inc. v. NLRB,

(2d Cir. 2008) (internal

quotation marks and alteration omitted). Substantial evidence means “such

2 relevant evidence as a reasonable mind might accept as adequate to support a

conclusion.” NLRB v. Starbucks Corp.,

(2d Cir. 2012) (internal

quotation marks omitted). We assume the parties’ familiarity with the facts and

record below, which we reference only as necessary to explain our decision.

Employee Discharges and Other Violations of Section 8(a)(1)

Section 7 of the Act guarantees that “[e]mployees shall have the right to

self‐organization, to form, join, or assist labor organizations . . . and to engage in

other concerted activities for the purpose of . . . mutual aid or protection . . . .”

. Section 8(a)(1) of the Act protects employees’ Section 7 rights by

prohibiting an employer from “interfer[ing] with, restrain[ing], or coerc[ing]

employees in the exercise of the rights guaranteed in [Section 7] . . . .”

(a)(1).

An employee’s Section 7 rights must be balanced against an employer’s

interest in preventing disparagement of his or her products or services and

protecting the reputation of his or her business. See Valley Hosp. Med. Ctr., Inc.,

, 1252–53 (2007). Accordingly, an employee’s communications

with the public may lose the protection of the Act if they are sufficiently disloyal

or defamatory. See MasTec Advanced Technologies,

, slip op. at *6

3 (2011). These communications may be sufficiently disloyal to lose the protection

of the Act if they amount to criticisms disconnected from any ongoing labor

dispute. See NLRB v. Elec. Workers Local 1229 (Jefferson Standard),

,

476–77 (1953).

An employee’s public statement is defamatory if made maliciously,

meaning “with knowledge of its falsity, or with reckless disregard of whether it

was true or false.” Linn v. United Plant Guard Workers of America, Local 114,

(1966). “The mere fact that statements are false, misleading or

inaccurate is insufficient to demonstrate that they are maliciously untrue. Where

an employee relays in good faith what he or she has been told by another

employee, reasonably believing the report to be true, the fact that the report may

have been inaccurate does not remove the relayed remark from the protection of

the Act.” Valley Hosp., 351 NLRB at 1252–53.

The Board determined as an initial manner that the only employee conduct

at issue was (1) Spinella’s “like” of LaFrance’s initial status update (“Maybe

someone should do the owners of Triple Play a favor and buy it from them. They

can’t even do the tax paperwork correctly!!! Now I OWE money...Wtf!!!!”); and

(2) Sanzone’s comment stating “I owe too. Such an asshole.” Special App’x 5.

4 Regarding this conduct, the Board concluded that, “in the context of the ongoing

dialogue among employees about tax withholding,” Spinella and Sanzone had at

maximum endorsed LaFrance’s claim that Triple Play had erred in her tax

withholding. Special App’x 5. The Board declined to hold either Sanzone or

Spinella responsible for any other statement posted in the Facebook discussion

on ground that “neither Sanzone nor Spinella would have lost the protection of

the Act merely by participating in an otherwise protected discussion in which

other persons made unprotected statements.” Special App’x 5.

The ALJ found and the Board agreed that the Facebook activity in this case

was “concerted” under the standard set forth in Meyers Industries,

,

887 (1986) enfd. sub nom. Prill v. NLRB,

(D.C. Cir. 1987), cert. denied

(1988), because it involved four current employees and was “part

of an ongoing sequence of discussions that began in the workplace about [Triple

Play’s] calculation of employees’ tax withholding.” Special App’x 3 (internal

quotation marks omitted). The Board also adopted the ALJ’s recommendation

that the Facebook activity was “protected” because “the discussion concerned

workplace complaints about tax liabilities, [Triple Play’s] tax withholding

5 calculations, and LaFrance’s assertion that she was owed back wages.” Special

App’x 3.

After finding that Sanzone’s and Spinella’s Facebook activity constituted

protected concerted activity, the only remaining question before the Board was

whether that Facebook activity was so disloyal or defamatory as to lose the

protection of the Act. The Board applied Jefferson Standard to conclude that

Sanzone’s and Spinella’s Facebook activity was not so disloyal as to lose

protection of the Act because “[t]he comments at issue did not even mention

[Triple Play]’s products or services, much less disparage them.” Special App’x 5.

The Board further concluded that Triple Play failed to meet its burden under

Linn to establish that the comments at issue were defamatory because “there is

no basis for finding that the employees’ claims that their withholding was

insufficient to cover their tax liability, or that this shortfall was due to an error on

[Triple Play]’s part, were maliciously untrue.” Special App’x 6.

Triple Play argues on appeal that because Sanzone’s and Spinella’s

Facebook activity contained obscenities that were viewed by customers, the

Board should have found that this activity lost the protection of the Act under

Starbucks, a case in which a Second Circuit panel remanded a Board Order for

6 reconsideration of the proper standard to apply when analyzing an employee’s

utterance of obscenities in the presence of customers.

. In Triple

Play’s view, the panel in Starbucks “strongly suggested” that an employee’s

obscenities uttered in the presence of customers “would not be protected in most

or all circumstances.” Appellant’s Br. 20.

Triple Play’s reliance on Starbucks is misplaced. The Starbucks panel

premised its decision on a finding that the Board had “disregarded the entirely

legitimate concern of an employer not to tolerate employee outbursts containing

obscenities in the presence of customers.” Starbucks,

. Here, the

Board stated unequivocally that its application of Jefferson Standard and Linn was

based on its longstanding recognition “that an employer has a legitimate interest

in preventing the disparagement of its products or services and, relatedly, in

protecting its reputation . . . from defamation.” Special App’x 4.

Furthermore, accepting Triple Play’s argument that Starbucks should apply

because the Facebook discussion took place “in the presence of customers” could

lead to the undesirable result of chilling virtually all employee speech online.

Almost all Facebook posts by employees have at least some potential to be

viewed by customers. Although customers happened to see the Facebook

7 discussion at issue in this case, the discussion was not directed toward customers

and did not reflect the employer’s brand. The Board’s decision that the Facebook

activity at issue here did not lose the protection of the Act simply because it

contained obscenities viewed by customers accords with the reality of modern‐

day social media use.

Triple Play further argues that, even if the Board were correct to apply

Jefferson Standard and Linn, the Board’s factual conclusions relating to those

standards were unsupported because “no evidence in the record . . . establishes

that Sanzone’s comment was limited” only to “endorsing LaFrance’s complaint

that she owed money on her taxes due to a tax withholding error on [Triple

Play]’s part.” Appellant’s Br. 27–28 (internal quotation marks omitted). Triple

Play would have us find that “the evidence, when taken as a whole,

demonstrates that Sanzone clearly endorsed such a comment by LaFrance and

that Spinella also endorsed disparaging comments about Triple Play and its

owners.” Appellant’s Br. 28. Triple Play also argues that the Board erred in

concluding under Linn that Sanzone’s comment was not defamatory because

“the evidence unequivocally establishes that Sanzone’s endorsement of

LaFrance’s complaint was knowingly false, as Sanzone did not believe that Triple

8 Play had made any errors with respect to her income tax withholdings.”

Appellant’s Br. 33.

We agree with counsel for the Board that “Spinella’s and Sanzone’s

communications, which were made to seek and provide mutual support looking

toward group action, were not made to disparage Triple Play or to undermine its

reputation.” NLRB Br. 34. The Facebook discussion clearly disclosed the

ongoing labor dispute over income tax withholdings, and thus anyone who saw

Spinella’s “like” or Sanzone’s statement could evaluate the message critically in

light of that dispute.

We also agree with counsel for the Board that Sanzone’s comment was not

defamatory under the Linn standard in light of the fact that she had

conversations with other employees regarding their tax concerns prior to the

Facebook discussion. As the Board observed, “simply because Sanzone knew

that Triple Play did not make an error on her (own) tax withholdings does not

mean that Sanzone’s endorsement of LaFrance’s complaint about Triple Play

making tax withholding errors was deliberately or maliciously false.” NLRB Br.

40–41. Although Sanzone may not have believed that Triple Play erroneously

withheld her taxes, that has no bearing on the truth of her statement “I owe too”

9 or her conceivable belief that Triple Play may have erroneously withheld other

employees’ taxes. It is certainly plausible that Sanzone truly owed taxes, even if

that was not the result of an error on Triple Play’s part—and even if other

employees’ claims regarding erroneous tax withholdings later proved inaccurate,

such inaccuracies by themselves do not remove the statement from the protection

of the Act.

In addition to finding that the discharges of Sanzone and Spinella violated

the Act, the Board adopted the ALJ’s conclusions that Triple Play violated the

Act by (1) threatening employees with discharge for their Facebook activity; (2)

interrogating employees about their Facebook activity; and (3) informing

employees that they were being discharged for their Facebook activity. Because

Sanzone’s and Spinella’s Facebook activity did not lose the protection of the Act,

Triple Play’s challenge to the other violations of Section 8(a)(1) must necessarily

fail.

Internet/Blogging Policy

A rule violates Section 8(a)(1) if it would reasonably tend to chill

employees in the exercise of their Section 7 rights. Lafayette Park Hotel,

, 825 (1998), enfd.

(D.C. Cir. 1999). If the rule explicitly restricts

10 activities protected by Section 7, then it is unlawful. NLRB v. Martin Luther Mem’l

Home, Inc. d/b/a Lutheran Heritage Village—Livonia,

, 646 (2004). “If

the rule does not explicitly restrict activity protected by Section 7, the violation is

dependent upon a showing of one of the following: (1) employees would

reasonably construe the language to prohibit Section 7 activity; (2) the rule was

promulgated in response to union activity; or (3) the rule has been applied to

restrict the exercise of Section 7 rights.”

.

Neither party disputed the ALJ’s findings that Triple Play’s

Internet/Blogging policy (1) did not explicitly restrict the exercise of Section 7

rights, (2) was not promulgated in response to union activity, and (3) was not

applied to restrict Section 7 rights. The inquiry before the Board was thus limited

to whether “employees would reasonably construe the language to prohibit

Section 7 activity.”

Although the ALJ found that employees would not reasonably construe

the language of the Internet/Blogging policy to restrict Section 7 activity, the

Board declined to adopt this recommendation and found instead that, under the

Lutheran Heritage framework, “employees would reasonably interpret [Triple

Play]’s rule as proscribing any discussions about their terms and conditions of

11 employment deemed ‘inappropriate’ by [Triple Play].” Special App’x 7. We

believe that the majority opinion of the Board correctly identified the Lutheran

Heritage framework as the governing rule on this question and reasonably

applied that rule to the facts of this case.

For the foregoing reasons, we AFFIRM the Board’s August 22, 2014

Decision and Order.

FOR THE COURT: Catherine O’Hagan Wolfe, Clerk

12