TV SalesmanAn employee goes on television and maligns his bosses for a new company policy with half-truths—and his bosses fire him for disloyalty. Sounds justified, right? Wrong. A National Labor Relations Board (NLRB) decision (recently affirmed by a D.C. Circuit panel) said as long as the employee’s statements to the media are not “flagrantly disloyal” or “maliciously untrue” the conduct is legally protected, concerted activity. Employees have the right to engage in protected, concerted activity surrounding a labor dispute, but employers also have the right to terminate insubordinate employees who make damaging statements about the company—and in DirecTV, Inc. v. NLRB, the D.C. Circuit found that the employee protection trumped the employer’s prerogative.

Facts of the Dispute

DirecTV wanted to see each of its television receivers connected to landline phones in customers’ homes. This connection enabled customers to have certain enhanced features and benefitted DirecTV by allowing them to track customer viewing habits. To further that goal, DirecTV instituted a new policy for its installation contractors to promote more land-line connections whereby the technicians would be back-charged or docked up to $5 for each customer installation performed that did not connect the receiver to the phone line. This new sales incentive did not sit well with the technicians who had a hard time convincing customers to connect the receivers to the phone line because customers could receive the full range of TV channels without the landline connection. Some of the technicians thought the sales advice suggested that they mislead or lie to customers about the necessity of a phone connection, and did not end up resulting in increasing connection numbers. One manager jokingly instructed technicians that they should tell customers that the TV system would “blow up” without a phone connection, and other supervisors, according to the technicians, instructed them to simply connect the phone line without telling the customer or try to advise customers that the receiver would not work without the phone connection.

After unsuccessfully talking with management to try and get the policy changed, nonunion technicians working for DirecTV’s installation contractor contacted a local news network to air their grievances on the evening news. The TV reporter interviewed the technicians as a group in their company uniforms. Not surprisingly, the interview painted an unflattering picture of DirecTV, with the technicians stating “if we don’t lie to the customers, we get back charged for it” and “we’ve been told to tell the customer whatever it takes to get that phone line into that receiver.”

After the interview aired DirecTV told the contractor that the technicians involved in the interview were not to be in customers’ homes, resulting in their being fired, even those who did not speak on air. Shortly thereafter, the fired employees filed an unfair labor practice grievance with the NLRB.

Legal Protections for Complaining Employees

Generally, employees (even nonunionized employees) in a labor dispute can appeal to third parties to win over support for their cause, but employers also have the prerogative to fire employees where, for instance, an employee publicly criticizes the company even if the criticism was an attempt to draw support to the labor dispute. The NLRB concluded that an appeal to a third party relating to an employment-related dispute can be protected concerted activity even if the third-party appeal is disloyal and disparaging as long as it relates to an ongoing dispute and does not rise to the level of “flagrant disloyalty” or contain “maliciously untrue statements.” In this case, there was no dispute that the technicians’ appeal related to a labor dispute because the pay-docking grievance.

The big question before the D.C. Circuit was whether the interview statements were “so disloyal, reckless or maliciously untrue as to lose the Act’s protection” and centered on the employees’ intent. Prior precedent held that employees have the right to support a consumer boycott of the employer’s products as long as they do not go beyond the dispute to disparage the employer’s product itself. George A Hormel and Co v NLRB. Here, the Board concluded there was no evidence that the technicians intended to cause customers to cancel their service—they were simply seeking public support for their cause and only after their attempts to resolve the dispute with the company failed. The company argued that the focus should not be on the employee’s actual intent, but on what an objective, reasonable observer would infer from the employees’ actions. The Board found, and the D.C. Circuit affirmed, that it could consider subjective intent when assessing whether a third party appeal rises to the level of flagrant disloyalty and concluded that the technicians did not specifically intend to inflict harm on the company and did not act recklessly without regard to the financial consequences to the company, but intended only to garner public support for their position. The Board also found that “for the most part” the technicians’ statements in the news were accurate representations of what the company had told the technicians and “any arguable departures from the truth … were not more than good-faith misstatements” but not malicious falsehoods.

A scathing dissenting opinion found that “when these technicians falsely accused their employer during a television broadcast of certain outrageous business practices, they crossed a line—from labor dispute to public disparagement; from concern about wages and working conditions to a vendetta aimed at undermining the Companies’ reputation” to make it “not a close case.” She noted that the DirecTV policy did not, in fact, require the technicians to lie and did not seriously encourage them to scare customers into accepting an unnecessary service. She further noted that prior precedent rejected the taking of a subjective approach to disloyalty, and that evaluation of whether an act was sufficiently disloyal to warrant termination was an objective one and was shown in this case by the technicians’ acts

Employer Takeaways

The balance between employees’ rights to engage in protected conduct and the employers’ right to fire insubordinate employees will not always yield consistent results. But in cases where it seems that termination is warranted for disloyalty the employees’ subjective intent—whether flagrant and malicious or purely seeking support for their cause—will likely be the determining factor. This protection is in play for concerted activity even in nonunion settings, as was the case here. Employers beware when making termination decisions on the basis of disloyalty—the NLRB doesn’t think things are cut and dried.