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NLRB General Counsel Issues New "Three Strike" Rule On Discriminatory Enforcement Of No Solicitation Rules

October 15, 2001

In the wake of the tragic events of September 11, many employees and charitable groups have engaged in fundraising activities in workplaces throughout the country. Responding to employer concerns that permitting this activity might compromise the employer’s otherwise valid no solicitation policy, the General Counsel of the National Labor Relations Board ("NLRB") issued a memorandum on September 28, 2001 providing important guidance on this issue.

Generally, an employer may make and enforce work rules that bar non-employees (including union representatives) from distributing literature or otherwise soliciting employees on the employer's private property. Employers also may make and enforce work rules that prohibit employees from distributing literature or otherwise soliciting their co-workers while on working time and under certain other circumstances.

However, discriminatory enforcement of such work rules is an unfair labor practice under the National Labor Relations Act (the "NLRA"), and the NLRB holds that it is unlawful to enforce such policies with regard to union activities but not to enforce them with regard to other activities, including charitable or civic activities like the United Way, the Red Cross, and Goodwill Industries. For example, in Sandusky Mall Co., 329 NLRB No. 62 (1999), nine different groups, including the United Way, Easter Seals, and the American Lung Association had solicited contributions at a mall during a period of several months. When one of the stores in the mall engaged a non-union contractor to conduct renovations, the local carpenters union distributed handbills, urging customers not to patronize the store. The mall owner had the union handbillers arrested for trespass when less drastic measures proved ineffective to stop the activity. The union filed unfair practice charges, and the NLRB ruled that by permitting the charitable solicitation activities but enforcing the policy against the union handbillers, the mall owner had unlawfully discriminated against union activity.

In contrast to cases such as this, the NLRB often has held that employers may allow a small amount of isolated charitable solicitation activity as a permissible exception to otherwise lawful no solicitation/no distribution policies. The distinction between the lawful exception and unlawful discrimination turns on the quantum of incidents at issue -- too many such incidents over too extended an amount of time constitute unlawful discrimination, while a sufficiently small number of sporadic incidents amount to a lawful exception. The problem is that there has never been a clearly defined rule as to where the lawful exception ends and unlawful discrimination begins. An employer that allowed its employees from time to time to collect charitable contributions could not be sure if it would commit an unfair labor practice by enforcing its no solicitation rule to ban union related solicitation.

In his recent memorandum to the NLRB's Regional Directors, the General Counsel noted the increase in fundraising activities since the terrorist attacks and attempted to provide concrete guidance to assist employers in determining whether permitting such activities while prohibiting union activities might compromise otherwise valid no solicitation/no distribution rules and constitute an unfair labor practice. The memorandum declared:

Although the [NLRB] has not defined the exact number of incidents necessary to find unlawful discrimination, it has found that three incidents of employer condonation of charitable solicitation was permitted. On the other hand, the [NLRB] has found discriminatory enforcement of otherwise valid no-solicitation/no distribution rules where the incidents of charitable solicitation occurred frequently and/or for an extended duration of time.

While the General Counsel is not empowered to declare binding law under the NLRA, his office in effect is the "prosecutor" when an unfair labor practice charge is filed before the NLRB, and the General Counsel’s memoranda therefore significantly impact the outcome of such charges. Under the September 28 memorandum, an employer may allow up to three incidents of charitable solicitation without fear of compromising its ability to bar union solicitation or distribution pursuant to a valid policy. Moreover, even though the introduction to the memorandum refers to charitable fundraising in the wake of September 11, the rule stated should apply to charitable activities of all kinds, not just those related to the terrorist attacks.

Employers should note, however, that the three incidents have to be sufficiently isolated or sporadic in order to avoid tainting the employer's policy. In one case that was cited with approval in the General Counsel's memorandum, the fact that there were only three incidents of charitable solicitation did not prevent a finding of discriminatory enforcement of the policy because all three took place on the same day that the policy was enforced against union activity.