Miklin Enterprises, Inc. v. National Labor Relations Board
861 F.3d 812, 2017 WL 2835648 (2017)
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Rule of Law:
Employee communications to the public, even when related to an ongoing labor dispute, lose protection under Section 7 of the NLRA if they constitute a sharp, public, disparaging attack on the quality of the employer's product or business policies in a manner reasonably calculated to harm the company's reputation and reduce its income, regardless of the employees' subjective 'malicious motive'.
Facts:
- MikLin Enterprises, Inc. owned and operated ten Jimmy John's sandwich-shop franchises and did not offer paid sick leave, requiring absent employees to find a replacement or face termination.
- In early 2011, employees involved in an Industrial Workers of the World (IWW) union organizing campaign began demanding paid sick leave from MikLin.
- IWW organizers designed and initially posted "Sick Day Posters" in MikLin stores, which featured images of sandwiches and text suggesting they could be made by sick workers and posed a health risk to consumers.
- On March 10, 2011, IWW supporters distributed a press release, an open letter (falsely claiming "health code violations occur at MikLin stores nearly every day"), and the sandwich poster to over one hundred media contacts, threatening "dramatic action" if demands for paid sick leave were not met.
- On March 20, 2011, IWW supporters publicly distributed a new version of the Sick Day posters across the city, listing MikLin co-owner Robert Mulligan’s personal telephone number and instructing customers to call him to demand "HEALTHY WORKERS MAKING YOUR SANDWICH!".
- Robert Mulligan subsequently received numerous phone calls for about a month from people concerned about eating at Jimmy John's.
- On March 22, 2011, MikLin fired six employees who coordinated the public poster campaign and issued written warnings to three who assisted.
- During this period, MikLin supervisors posted disparaging comments and images about a prominent union supporter, David Boehnke, on an employee-created "Jimmy John’s Anti-Union" Facebook page, encouraging others to widely disseminate degrading content.
- An area manager removed union literature, including an IWW "FAQ about the Union Election & Settlement" and copies of amended unfair labor practice charges, from an employee tack board in a MikLin store, despite the company generally permitting employee access to such boards.
Procedural Posture:
- The Industrial Workers of the World (IWW) union lost a Board-conducted representation election at MikLin Enterprises, Inc. in October 2010.
- The IWW filed unfair labor practice charges and objections to the election with the National Labor Relations Board (NLRB).
- MikLin and the IWW settled these objections on January 10, 2011, agreeing to a Board-conducted rerun election under certain conditions.
- Following employee discharges and other employer actions, the NLRB's Administrative Law Judge (ALJ) concluded that MikLin violated Sections 8(a)(1) and 8(a)(3) of the NLRA.
- A divided panel of the NLRB affirmed the ALJ’s findings and conclusions.
- MikLin Enterprises, Inc. petitioned the U.S. Court of Appeals for the Eighth Circuit for review of the NLRB Order; the NLRB cross-petitioned for enforcement.
- A divided panel of the Eighth Circuit initially enforced the NLRB’s Order in its entirety.
- The Eighth Circuit granted rehearing en banc and vacated the panel decision.
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Issue:
Does an employer violate Sections 8(a)(1) and 8(a)(3) of the National Labor Relations Act when it discharges and disciplines employees for publicly distributing posters that sharply and falsely disparage the quality of the company’s product as unhealthy, even when these communications are related to an ongoing labor dispute, and does it violate Section 8(a)(1) by encouraging disparagement of a union supporter or by removing union literature from company bulletin boards?
Opinions:
Majority - Loken, Circuit Judge
No, an employer does not violate Sections 8(a)(1) and 8(a)(3) of the NLRA when it discharges and disciplines employees for publicly distributing posters that sharply and falsely disparage the quality of the company’s product as unhealthy, even when these communications are related to an ongoing labor dispute. The court concluded that the means used in the poster attack were so disloyal as to exceed the employees' right to engage in concerted activities, as construed in the controlling Supreme Court precedent, NLRB v. Local Union No. 1229, IBEW (Jefferson Standard). The court found that the NLRB fundamentally misconstrued Jefferson Standard by requiring proof of a malicious subjective intent to harm the employer, rather than focusing on the objective impact and nature of the disparaging attack. The appropriate inquiry distinguishes between communications targeting labor practices (protected) and those indefensibly disparaging product quality or services (unprotected), because the latter causes harm that outlasts the labor dispute. The MikLin employees' attack was "sharp" and "reasonably calculated to harm the company’s reputation and reduce its income," particularly by choosing flu season, making materially false and misleading statements (e.g., claiming employees "can’t even call in sick" or that "health code violations occur nearly every day"), and while working and collecting wages. Such calculated, devastating attacks are not protected by the Act. Consequently, MikLin's solicitation of employees to remove these unprotected posters also did not violate Section 8(a)(1). However, the court enforced the remainder of the NLRB's order, finding that MikLin did violate Section 8(a)(1) by: (1) its supervisors' public efforts to disparage and degrade union leader David Boehnke on Facebook, which would reasonably intimidate Boehnke and other employees from exercising their Section 7 rights; and (2) its removal of IWW union literature (FAQs and unfair labor practice charges) from in-store employee tack boards, given that the company otherwise permitted employee access to such boards, thus interfering with the employees’ right to communicate about ongoing organizational activity.
Dissenting - Kelly, Circuit Judge
Yes, an employer violates the NLRA by discharging employees for public communications unless those communications are unprotected by Jefferson Standard, which the Board reasonably interpreted to require a direct link to a labor dispute and a malicious motive to harm the employer, neither of which was met here to justify finding the activity unprotected. The dissent argued that Jefferson Standard did not establish an explicit test for disloyalty, leaving the task of defining Section 7's scope to the NLRB. The Board's test, requiring that communications be directly linked to an ongoing labor dispute and that employees possess a malicious motive to harm the employer, is a permissible and reasonable interpretation of the Act. The posters were directly linked to the sick leave dispute ("Help Jimmy John’s Workers Win Sick Days"), unlike the handbills in Jefferson Standard. Furthermore, the Board's reliance on a malicious motive is consistent with Supreme Court and Eighth Circuit precedent (Washington Aluminum Co., Red Top, Inc.) and is entitled to Chevron deference. The dissent contended that the majority's strict dichotomy between targeting labor practices versus disparaging product quality is unsupported and impractical in labor disputes where such issues often intersect. The Board's finding that the employees lacked a malicious motive and that the communications merely suggested a "realistic potential for illness" was a reasonable conclusion, and thus, the court should have deferred to the Board's decision that the Sick Day poster campaign was protected activity. Therefore, the solicitation to remove the posters would also be an unfair labor practice.
Concurring - Colloton, Circuit Judge
The Board's conclusion that employees lacked a malicious motive was not supported by substantial evidence. While concurring in the judgment (that MikLin lawfully disciplined/discharged employees regarding the posters), the concurring opinion declined to join the majority's broader interpretation of Jefferson Standard. Instead, it relied on the narrower ground that, even under the Board’s own standard (which requires a "malicious motive" for disloyalty), the evidence in this case compelled the opposite conclusion. The concurrence argued that the employees "obviously intended to harm MikLin’s business" through their actions, such as intentionally choosing flu season, including materially false and misleading statements, and selecting public communications "calculated to alienate the public’s patronage." Therefore, the employees acted with malicious motive and their conduct was "flagrantly disloyal, wholly incommensurate with any grievance," making the Board's finding to the contrary unsupported by substantial evidence. The concurrence agreed with the majority's conclusions regarding the other two Section 8(a)(1) violations.
Analysis:
This case significantly clarifies the distinction between protected concerted activity and unprotected disloyalty under the National Labor Relations Act, reaffirming the enduring strictures of Jefferson Standard. By rejecting the NLRB's "malicious motive" standard for product disparagement, the Eighth Circuit shifts the focus back to an objective assessment of the means used by employees and the nature of the harm caused. The ruling provides employers with greater latitude to discipline employees for public communications that sharply disparage the company's product, especially when those communications contain false or misleading statements, even if made in the context of a legitimate labor dispute. This decision underscores that the right to engage in concerted activities is not absolute and does not grant employees a license to inflict severe, long-lasting damage to an employer's business reputation through product-focused attacks.
