In a 2-1 ruling in DirecTV Inc. v. National Labor Relations Board, the U.S. Court of Appeals for the D.C. Circuit affirmed the NLRB’s ruling that DirecTV must reinstate technicians who were terminated for complaining about a company pay policy during a television interview, finding that the employees’ conduct constituted protected, concerted activity and was not “so disloyal, disparaging and malicious” as to lose protection of the NLRA.

Background

In early 2006, DirecTV informed its installation contractors (whom DirecTV hires to install satellite television receivers in subscribers’ homes) that it wanted each of its television receivers to be connected to a working telephone landline in customers’ homes, which would offer additional options for the customers and allow DirecTV to track customers’ viewing habits to help guide its programming decisions. DirecTV informed MasTec Advanced Technologies, one of its installation contractors, that it would begin charging MasTec $5 for each receiver installed without a phone line connection.  MasTec in turn instituted a new pay policy under which technicians would be paid $2 less for each receiver they installed, but would receive an additional $3.35 if they connected the receiver to a phone line.  In addition, technicians who failed to connect receivers to phone lines more than half the time in a 30-day period would be “back-charged” $5 for each unconnected receiver.

MasTec technicians immediately began to express their displeasure over the new policy. In response, DirecTV and MasTec provided advice to the technicians on how they could connect more receivers.  Some of the advice either involved standard sales techniques or was “plainly not meant to be taken literally,” for example, a MasTec manager’s comment that technicians should tell customers that their DirecTV system would “blow up” without a phone connection.  The technicians “continued to voice their concerns and frustration,” but the pay policy remained in place.  A group of MasTec technicians then contacted a local news station, which agreed to air a story.  The technicians appeared at the news station in DirecTV vans and wearing their DirecTV uniforms.  They proceeded to discuss the pay policy and the “advice” that was provided to them about getting customers to connect their receivers to phone lines, with one of the technicians stating: “Tell the customer whatever you have to tell them.  Tell them if these phone lines are not connected the receiver will blow up.  We’ve been told to say that.  Whatever it takes to get that phone line into that receiver.”  After the segment aired, DirecTV instructed MasTec to terminate the technicians who appeared in the broadcast.

ALJ and Board Decisions

An unfair labor practice was filed against MasTec and DirecTV and the ALJ initially ruled in favor of the companies, finding that while the technicians’ television appeal related to an ongoing labor dispute (as necessary for their conduct to qualify as protected concerted activity under the NLRA), their actions nevertheless fell outside of the Act’s protections because they were “so disloyal, disparaging and malicious to be unprotected.”

The matter was appealed to the Board, which reversed the ALJ’s decision. The Board stated that, under the two-pronged test first set out in American Golf Corp., 330 NLRB 1238 (2000) (Mountain Shadows Golf), “employee communications to third parties in an effort to obtain their support are protected where: (i) the communication indicates it is related to an ongoing dispute and (ii) it is not so disloyal, reckless or maliciously untrue as to lose the Act’s protection.”

The Board found that the ALJ “clearly erred” with regard to the second prong of the test, as “almost all of the statements [made by the technicians during the broadcast] were truthful representations of what the companies told them to do,” and any “arguable departures from the truth were no more than good-faith misstatements or incomplete statements, not malicious falsehoods.” The Board further found, with regard to whether the statements amounted to “unprotected disloyalty or reckless disparagement,” that it “will not find a public statement unprotected unless it is flagrantly disloyal, wholly incommensurate with any grievances which the employees might have” and that the technicians’ statements did not meet that standard.

Circuit Court Decision

The D.C. Circuit affirmed the NLRB’s decision, finding that “the Board acted within its discretion” and did not reach a conclusion so unsupported by substantial evidence as to warrant a reversal.

Citing the Mountain Shadows Golf test, the court found that the “first prong of the test—whether ‘the communication indicates it is related to an ongoing dispute between the employees and the employers’—focuses on whether it would be apparent to the target audience that the communication arises out of an ongoing labor dispute.”  Here, stated the court, “there is no dispute” that the technicians’ statements in the interview segment satisfied this prong, and noted that the companies did not challenge the Board’s finding “that the employee communications here were clearly related to their pay dispute.”

As to the second prong of the test—whether the technicians’ third-party appeal communications were “so disloyal, reckless or maliciously untrue as to lose the Act’s protection” —the court first rejected the dissent’s argument that “the NLRA doesn’t immunize disloyal behavior.” Rather, stated the court, the issue is “not of whether the employees’ third-party appeal was disloyal, but instead of whether it exhibited ‘such detrimental disloyalty as to provide cause for dismissal,’” quoting the standard articulated by the Supreme Court in NLRB v. Local Union No. 1229, Int’l Bhd. of Elec. Workers, 346 U.S. 464 (1953) (Jefferson Standard).

In concluding that the Jefferson Standard test was not met here, the circuit court found that the Board had substantial evidence that the technicians’ statements were not flagrantly disloyal or maliciously untruthful.  The court cited the fact that the technicians approached the television station “only after repeated unsuccessful attempts to resolve” their dispute through discussions with MasTec.  The court also noted that although the newscast “shed unwelcome light” on the pay practices and “advice” in question, the segment “directly related to the technicians’ grievance about what they considered to be an unfair pay policy that they believed forced them to mislead customers” about the need for a phone connection.

Thus, the court affirmed the Board’s conclusion that the technicians’ statements were not “wholly incommensurate with their grievances.” The court also affirmed the Board’s finding that “while the technicians might have been aware that the newscast could lead some consumers to cancel their service, there was no evidence the technicians specifically intended to inflict such harm on the companies in their statements in the segment.”

Rejecting the companies’ argument that “it was maliciously untruthful for the technicians to say that they would lose money if they did not lie,” the court noted that the technicians “had little, if any, control over the editing of their interview or the content of the final segment” and agreed with the Board that the technicians’ statements “fairly reflected their personal experiences under the new pay scheme.”

In a dissent, U.S. Circuit Judge Janice Rogers Brown stated that this was “not a close case” and found that the technicians’ complaints about being instructed to lie were “malicious and untrue” and “crossed a line—from labor dispute to public disparagement.” Judge Brown also disagreed with the majority’s conclusion that there was no evidence that the technicians did not intend to inflict harm on the companies, stating: “Had the MasTec technicians honestly and fairly discussed their labor dispute with the news station, their aggressive tactics could be sustained as a proper appeal to outside parties. . . . But these technicians chose instead to feed the station a false, disparaging story they knew would trigger public outrage.”

This case reinforces the need for employers to carefully evaluate the risks of taking action against employees who make statements, particularly as a group, to outside parties about workplace grievances. As we have noted, the Board itself is hardly consistent in this area.