Colorado Professional Security Services (27-CA-203915)

United States Government

National Labor Relations Board

OFFICE OF THE GENERAL COUNSEL

Advice Memorandum

DATE:

August 7, 2018

TO:

Paula S. Sawyer, Regional Director

Region 27

FROM:

Jayme L. Sophir, Associate General Counsel

Division of Advice

SUBJECT: Colorado Professional Security Services, LLC

(COPSS)

Cases 27-CA-203915, -206097, -206104

512-5009-6767

512-5012-0125

512-5036-6720

512-7550-6000

These cases were submitted for advice as to whether the Employer violated

Section 8(a)(1) of the Act by: (1) discharging one of the Charging Parties pursuant to

unlawfully overbroad Employer rules; and (2) filing and maintaining a lawsuit

against the Charging Parties, allegedly in retaliation against their participation in

federal and state wage-and-hour lawsuits against the Employer. We conclude that

the Employer violated Section 8(a)(1) by maintaining overbroad work rules. We

further conclude that the Employer did not violate the Act by discharging one of the

Charging Parties or by filing and maintaining its lawsuit against the Charging

Parties.

FACTS

Colorado Professional Security Services, LLC (“the Employer”) provides armed

security services to shopping malls, car dealerships, and other clients in and around

Colorado Springs, Colorado. Among its other policies, the Employer maintains the

following provision:

Harm to Business or Reputation: Employees must refrain from

engaging in conduct that could adversely affect the Company’s business

or reputation. Such conduct includes, but is not limited to:

1. publicly criticizing the Company, its management or its

employees . . .

* * *

Beginning in

2016, Charging Party 1, a former security guard employee

of the Employer, filed federal and Colorado state court lawsuits against the Employer

st refrain from

engaging in conduct that could adversely affect the Company’s business

or reputation. Such conduct includes, but is not limited to:

1. publicly criticizing the Company, its management or its

employees . . .

* * *

Beginning in

2016, Charging Party 1, a former security guard employee

of the Employer, filed federal and Colorado state court lawsuits against the Employer

(b) (6), (b) (7)(C)

Cases 27-CA-203915, et al.

- 4 -

Employer’s clients and their workers/clients; and (4) insidious remarks regarding the

Employer’s company name, business, security officers, and clients while working. The

termination notices emphasized that Charging Party 2 had made the insidious

remarks in the Facebook video while on duty and in uniform. The Employer’s

position statement expressly states that Charging Party 2 was terminated, inter alia,

for the remarks and conduct that hurt the Employer’s reputation, and cites the

Employer’s “Harm to Business or Reputation” policy. In addition, the Employer’s

owner expressly cited the policy in

explanation for discharging Charging Party 2.

The Employer’s owner has also stated that, to

knowledge, the client at the

location where Charging Party 2 worked was not aware of

Facebook video and did

not complain about it.

C. The Employer Files a State Court Lawsuit against Charging Party 1,

Charging Party 1’s

, and Charging Party 2

On

, the Employer filed a state court lawsuit against Charging Party 1,

Charging Party 1’s

and Charging Party 2, alleging that the defendants’

Facebook posts constituted defamation, interference with contractual relations, and

interference with business relations. The Employer’s state law complaint does not

allege that Charging Party 1, Charging Party 1’s

, or Charging Party 2 acted with

malice, and the complaint does not specify any actual damages the Employer may

have suffered from their statements

alleging that the defendants’

Facebook posts constituted defamation, interference with contractual relations, and

interference with business relations. The Employer’s state law complaint does not

allege that Charging Party 1, Charging Party 1’s

, or Charging Party 2 acted with

malice, and the complaint does not specify any actual damages the Employer may

have suffered from their statements. The complaint in the Employer’s lawsuit

emphasizes the federal wage-and-hour lawsuit that Charging Party 1 initiated,

although the Employer’s lawsuit is not a counterclaim to the wage-and-hour lawsuit,

but instead is an entirely independent legal action. In particular, the Employer’s

lawsuit states:

* * * *

8. In 2016 a claim was filed in the US District Court for Colorado, case

number 1

by three Plaintiffs, one of whom was and

is [Charging Party 1], alleging any number of violations by COPSS of

Federal and State of Colorado employment laws. It was originally filed

with the expectation by the plaintiffs in that matter that a group of

employees and former employees of COPSS could be assembled into a

class action against COPSS. That effort has so far failed and the

plaintiffs in that lawsuit are now deemed an Opt-In Collective.

[Charging Party 2] is now one of the plaintiffs in the Federal court

action.

9. Since joining in the Federal matter, [Charging Party 1] and

wife,

[ ] have made efforts to encourage other employees of COPSS to join

the lawsuit and have made statements to any number of clients of

COPSS that they should also join the Federal lawsuit. It is unclear

(b) (6), (b) (7

(b) (6), (b)

(b) (6), (b) (

(b) (6), (b) (7)(C

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C

(b) (6), (b) (7)

(b) (6), (b) (7)(C)

in the Federal matter, [Charging Party 1] and

wife,

[ ] have made efforts to encourage other employees of COPSS to join

the lawsuit and have made statements to any number of clients of

COPSS that they should also join the Federal lawsuit. It is unclear

(b) (6), (b) (7

(b) (6), (b)

(b) (6), (b) (

(b) (6), (b) (7)(C

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C

(b) (6), (b) (7)

(b) (6), (b) (7)(C)

(b) (6), (b)

Cases 27-CA-203915, et al.

- 5 -

how COPSS clients could join the lawsuit involving former and current

employees, but that fact did not deter [Charging Party 1 and

]

from making the requests.

10. As part of the effort by [Charging Party 1 and

to

encourage others to join the Federal lawsuit, both of those Defendants

have made a number of statements about COPSS that are both untrue

and defamatory.[5]

* * * *

The Employer has offered no direct evidence that would indicate that any of the

statements it alleges as defamatory were false, and has offered no evidence at all that

Charging Party 1, Charging Party 1’s

or Charging Party 2 acted with malice, or

that the Employer had any actual damages from the statements at issue in the

lawsuit.

ACTION

Initially, we conclude that the Employer violated Section 8(a)(1) by maintaining

unlawfully overbroad rules. Second, we conclude that the Employer’s discharge of

Charging Party 2 did not violate Section 8(a)(1) because

conduct did not constitute

protected concerted activity and was gross misconduct. Finally, while the Employer’s

state court lawsuit lacks a reasonable basis, we conclude that it was not filed with an

unlawful retaliatory motive.

I.

The Employer Maintains Overbroad Rules that Violate Section 8(a)(1)

We conclude that the Employer’s “Harm to Business or Reputation” policy

prohibiting employees from criticizing the Employer, and the standard disciplinary

letter language prohibiting employees from discussing their discipline with coworkers

or clients, violate Section 8(a)(1) of the Act

unlawful retaliatory motive.

I.

The Employer Maintains Overbroad Rules that Violate Section 8(a)(1)

We conclude that the Employer’s “Harm to Business or Reputation” policy

prohibiting employees from criticizing the Employer, and the standard disciplinary

letter language prohibiting employees from discussing their discipline with coworkers

or clients, violate Section 8(a)(1) of the Act. Under Boeing,6 these provisions are

Category 2 rules that violate Section 8(a)(1) because the impact on employee NLRA

rights outweighs the Employer’s business justification. Regarding the policy, by

prohibiting any public criticism of the Employer or its management, the Employer is

5 The allegation in paragraph 10 of the Employer’s lawsuit does not appear to refer to

any of the particular statements alleged as defamatory in the Employer’s lawsuit, as

none of those statements would have been related to encouraging others to join in the

federal wage-and-hour lawsuit.

6 365 NLRB No. 154, slip op. at 3-5 (Dec. 14, 2017).

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C

(b) (6), (b)

Cases 27-CA-203915, et al.

- 8 -

III. The Employer’s State Court Lawsuit

In Bill Johnson’s Restaurants v. NLRB,11 the Supreme Court held that the Board

may enjoin as an unfair labor practice the filing and prosecution of a lawsuit only

when the lawsuit: (1) lacks a reasonable basis in law or fact; and (2) was commenced

with a retaliatory motive. In BE & K Construction Co.,12 the Board clarified that a

baseless lawsuit, whether ongoing or completed, violates the Act if the motive for

initiating the lawsuit was to retaliate against Section 7 rights, but that a reasonably

based lawsuit does not violate the Act regardless of the motive for bringing it.13

A

asonable basis in law or fact; and (2) was commenced

with a retaliatory motive. In BE & K Construction Co.,12 the Board clarified that a

baseless lawsuit, whether ongoing or completed, violates the Act if the motive for

initiating the lawsuit was to retaliate against Section 7 rights, but that a reasonably

based lawsuit does not violate the Act regardless of the motive for bringing it.13

A.

The Employer’s state court lawsuit is baseless

A lawsuit is objectively baseless when its factual or legal claims are such that “no

reasonable litigant could realistically expect success on the merits.”14 The analysis of

this issue requires “[an examination of] the plaintiff’s evidence to determine whether

it raises any material questions of fact.”15 The burden rests on the court plaintiff to

present the Board with evidence showing genuine issues of material fact and that

there is prima facie evidence supporting each cause of action alleged.16

In Linn v. Plant Guard Workers Local 114,17 the Supreme Court held that a state

court has jurisdiction to apply state remedies against defamation in a lawsuit brought

by “either party to a labor dispute” against the other party only where the state

complainant “pleads and proves that the [allegedly defamatory] statements were

made with malice and injured him.”18 The Court and the text of the Act itself have

11 461 U.S. 731, 748–49 (1983).

12 351 NLRB 451 (2007).

13 See also, e.g., Ashford TRS Nickel, LLC, 366 NLRB No. 6, slip op. at 4, 6 (2018)

(employer’s retaliatory, baseless, and preempted lawsuit attacking union’s Section 7-

protected consumer boycott violated Section 8(a)(1)); Atelier Condominium & Cooper

Square Realty, 361 NLRB 966, 968 (2014), enforced, 653 Fed. Appx. 62 (2d Cir. 2016).

14 BE & K, 351 NLRB at 457.

15 Geske & Sons, Inc. v. NLRB, 103 F.3d 1366, 1376 (7th Cir. 1997). See also Bill

Johnson’s, 461 U.S. at 745–47.

16 Bill Johnson’s, 461 U.S. at 746, n.12

d lawsuit attacking union’s Section 7-

protected consumer boycott violated Section 8(a)(1)); Atelier Condominium & Cooper

Square Realty, 361 NLRB 966, 968 (2014), enforced, 653 Fed. Appx. 62 (2d Cir. 2016).

14 BE & K, 351 NLRB at 457.

15 Geske & Sons, Inc. v. NLRB, 103 F.3d 1366, 1376 (7th Cir. 1997). See also Bill

Johnson’s, 461 U.S. at 745–47.

16 Bill Johnson’s, 461 U.S. at 746, n.12.

17 383 U.S. 53 (1966).

Cases 27-CA-203915, et al.

- 9 -

made it clear that the term “labor dispute” is to be broadly interpreted in this

context,19 and would include a wage-and-hour lawsuit pursued by current or former

employees against an employer. In order to prove malice, the plaintiff must show

that the statements were made with knowledge of falsity or with reckless disregard of

whether the statements were true or false.20 Demonstrating the federal overlay of

actual malice is a “heavy burden” that must be shown by “clear and convincing

proof.”21 And, where, as here, a plaintiff alleges harm to its reputation, the plaintiff

must also show evidence of actual damages or loss due to any such reputational

harm.22 The Board has recognized that Bill Johnson’s and Linn are to be read

together, and that in a defamation case arising out of a labor dispute, a plaintiff must

prove the “[f]ederal overlay of both actual malice and damages” to have its lawsuit

treated as reasonably based.23 In addition, the Linn standard equally applies to

18 383 U.S. at 55

Board has recognized that Bill Johnson’s and Linn are to be read

together, and that in a defamation case arising out of a labor dispute, a plaintiff must

prove the “[f]ederal overlay of both actual malice and damages” to have its lawsuit

treated as reasonably based.23 In addition, the Linn standard equally applies to

18 383 U.S. at 55. See also Beverly Health & Rehabilitation Services, 331 NLRB 960,

961 n.3, 963 (2000) (“where a party to a labor dispute circulates false and defamatory

statements, a state court defamation lawsuit is not preempted by the Act ‘if the

complainant pleads and proves that the statements were made with malice and

injured him.’”), reconsideration denied, Beverly Health & Rehabilitation Services, 336

NLRB 332, 333 (2001) (“where the plaintiff has alleged and can prove actual malice

and damages, the defamation suit is not preempted” and “the Board cannot enjoin it

unless and until the Board determines that it lacks a reasonable basis and is

retaliatory”).

19 See, e.g., Letter Carriers v. Austin, 418 U.S. 264, 278–79 (1974) (“whether Linn’s

partial pre-emption of state libel remedies is applicable obviously cannot depend on

some abstract notion of what constitutes a ‘labor dispute’; rather, application of Linn

must turn on whether the defamatory publication is made in a context where the

policies of the federal labor laws leading to protection for freedom of speech are

significantly implicated”); Section 2(9) of the Act (“[t]he term ‘labor dispute’ includes

any controversy concerning terms, tenure or conditions of employment, or concerning

the association or representation of persons in negotiating, fixing, maintaining,

changing, or seeking to arrange terms or conditions of employment, regardless of

whether the disputants stand in the proximate relation of employer and employee”).

20 Linn, 383 U.S. at 65.

21 Id.

22 Id.; Intercity Maint. Co. v

controversy concerning terms, tenure or conditions of employment, or concerning

the association or representation of persons in negotiating, fixing, maintaining,

changing, or seeking to arrange terms or conditions of employment, regardless of

whether the disputants stand in the proximate relation of employer and employee”).

20 Linn, 383 U.S. at 65.

21 Id.

22 Id.; Intercity Maint. Co. v. Service Employees Local 254, 241 F.3d 82, 89-90 (1st Cir.

2001) (despite evidence of malice, plaintiff alleging defamation in labor dispute “could

not rest on the common law presumption of damages” and failed to show “evidence of

actual loss due to reputational harm and consequent lost profits”).

Cases 27-CA-203915, et al.

- 10 -

allegations of tortious interference with contract or business relations, which are also

at issue here.24

Thus, to determine if the filing and maintenance of a defamation lawsuit

constitutes an unfair labor practice, the Board examines whether the plaintiff has

pled and can prove malice and actual damages.25 For instance, in Beverly Health &

Rehabilitation Services, the Board dismissed aspects of the ULP complaint that

alleged that the employer had unlawfully maintained a preempted lawsuit, because

the employer there had satisfied the Linn framework by pleading malice and

damages.26

Here, the Employer’s state court lawsuit lacks a reasonable basis in law or fact

because the Employer has entirely failed to plead the required Linn elements, and

has failed to present the Region with any evidence demonstrating that the Charging

Parties’ statements were made with malice, or that it has some reason to believe that

it may be able to demonstrate malice before the court.27 Indeed, the Employer has

not even offered any proof, as required by state law, that the allegedly defamatory

statements were false.28

23 Beverly Health & Rehabilitation Services, 336 NLRB at 333

arties’ statements were made with malice, or that it has some reason to believe that

it may be able to demonstrate malice before the court.27 Indeed, the Employer has

not even offered any proof, as required by state law, that the allegedly defamatory

statements were false.28

23 Beverly Health & Rehabilitation Services, 336 NLRB at 333.

24 See Beverly Hills Foodland, Inc. v. Food & Commercial Workers Local 655, 39 F.3d

191, 196 (8th Cir. 1964) (“the malice standard required for actionable defamation

claims during labor disputes must equally be met for a tortious interference claim

based on the same conduct or statements”).

25 See Beverly Health & Rehabilitation Services, 331 NLRB at 963.

26 Id.

27 See Ashford TRS Nickel, 366 NLRB No. 6, slip op. at 6 (“[N]ot only did the

Respondent fail to adequately plead actual malice, the Respondent did not assert any

facts that, if proven, would have established actual malice . . . . Thus, from the

beginning, an essential element of the lawsuit was lacking, preordaining the lawsuit’s

failure.”); Beverly Health & Rehabilitation Services, 331 NLRB at 963 (Board

examines whether defamation suit raises a genuine issue of material fact under Bill

Johnson’s and whether plaintiff’s pleadings are adequate under Linn).

28 Under Colorado law, defamation and interference with contract or business

relations can only be found where the defendant has made statements of “verifiable

facts . . . capable of being proved true or false.” Keohane v. Stewart, 882 P.2d 1293,

1300 (Colo. 1994). Thus, mere opinions, even derogatory opinions, cannot be found to

be defamatory. See, e.g., Fry v. Lee, 408 P.3d 843, 855-56 (Colo. App. 2013)

n and interference with contract or business

relations can only be found where the defendant has made statements of “verifiable

facts . . . capable of being proved true or false.” Keohane v. Stewart, 882 P.2d 1293,

1300 (Colo. 1994). Thus, mere opinions, even derogatory opinions, cannot be found to

be defamatory. See, e.g., Fry v. Lee, 408 P.3d 843, 855-56 (Colo. App. 2013)

Cases 27-CA-203915, et al.

- 11 -

Additionally, the Employer has not pled any specific damages or offered any proof

that it suffered any actual damages. There is no evidence showing damages from the

Charging Party 2’s Facebook video; indeed, the Employer

has stated that, to

knowledge, the client at the location where Charging Party 2 worked was not

aware of

Facebook video and did not complain about it. The Employer’s

has

claimed, without offering any evidentiary support, that some employees of one of the

Employer’s clients saw Charging Party 1’s

Facebook posts and that the

Employer “ended up cutting ties with this client.” But there is no evidence that would

indicate any causal linkage between the Facebook posts and the end of the business

relationship, particularly where the Employer’s

says that

cut ties with the

client, not that the client did so. The Employer has presented no other evidence that

would indicate any damages or actual harm. Therefore, because the Employer has

not shown that it possesses or reasonably believes it can obtain evidence to support

essential elements of its cause of action -- that the Charging Parties’ statements were

made with malice and that the Employer experienced actual harm as a result of the

Defendants’ statements -- the Employer’s lawsuit is baseless under Bill Johnson’s.

B

or actual harm. Therefore, because the Employer has

not shown that it possesses or reasonably believes it can obtain evidence to support

essential elements of its cause of action -- that the Charging Parties’ statements were

made with malice and that the Employer experienced actual harm as a result of the

Defendants’ statements -- the Employer’s lawsuit is baseless under Bill Johnson’s.

B.

The Employer’s state court lawsuit is not unlawful because it is

not directed at any protected conduct and has not been otherwise

shown to retaliate against the Charging Parties’ protected conduct

Factors for discerning an employer’s unlawful retaliatory motive for initiating a

state court lawsuit include whether the lawsuit targeted protected concerted

activity;29 evidence of the plaintiff’s prior animus toward protected rights;30 whether

the lawsuit is baseless;31 and any claim for excessive damages.32

(“[a]lternative torts cannot be used to evade the constitutional requirements for

defamation actions”); Henderson v. Times Mirror Co., 669 F.Supp. 356, 357 (D. Colo.

1987) (a “claim of intentional interference with contract cannot be predicated on [an]

expression of opinion”) (citing Redco Corp. v. CBS, Inc., 758 F.2d 970 (3d Cir. 1985),

cert. denied, 474 U.S. 843 (1985), for the proposition that “since the defendants could

not be liable for defamation arising out of their statements of opinion, the intentional

interference with contractual relations claim was likewise not actionable”), affirmed,

876 F.2d 108 (10th Cir. 1989). Thus, even statements by a Charging Party considered

to be insults would not satisfy the Employer’s burden under state law.

29 See, e.g., Ashford TRS Nickel, 366 NLRB No. 6, slip op. at 6; Summitville Tiles, 300

NLRB 64 (1990).

30 See, e.g., Atelier Condominium & Cooper Square Realty, 361 NLRB at 970

31 Id.; Bill Johnson’s, 461 U.S. at 747.

(b) (6), (b) (7

(b) (6), (b)

(b) (6), (b) (7)(C)

even statements by a Charging Party considered

to be insults would not satisfy the Employer’s burden under state law.

29 See, e.g., Ashford TRS Nickel, 366 NLRB No. 6, slip op. at 6; Summitville Tiles, 300

NLRB 64 (1990).

30 See, e.g., Atelier Condominium & Cooper Square Realty, 361 NLRB at 970

31 Id.; Bill Johnson’s, 461 U.S. at 747.

(b) (6), (b) (7

(b) (6), (b)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b)

(b) (6), (b) (7)(C)

Cases 27-CA-203915, et al.

- 12 -

Here, while the Employer’s lawsuit in the instant cases is clearly baseless, it is

not itself directed at any protected conduct, and there is insufficient evidence to show

that the Employer commenced its suit to retaliate against the Charging Parties’

Section 7 activity. In this regard, we particularly note the timing here -- the

Employer’s lawsuit came soon after Charging Party 1’s

and Charging Party 2’s

Facebook posts and almost one year after Charging Party 1 first filed the wage-and-

hour lawsuits. This supports the Employer’s assertion that it was the Facebook posts

that were the reason for its state court lawsuit, and not the Charging Parties’ earlier

lawsuits.

Moreover, although the Employer’s state court complaint references the Charging

Parties’ participation in the federal wage-and-hour lawsuit against it, that in itself

does not demonstrate animus toward their participation in the wage-and-hour suit.

Rather, it appears to be an attempt to provide context for the Employer’s state court

lawsuit and to show that what the employees were doing on Facebook was actually

not in furtherance of their lawsuit, because the Charging Parties would not be able to

add the Employer’s clients to their lawsuit which is limited to former and current

employees of the Employer (i.e., the Employer appears to have been defending in

advance against an argument the Charging Parties would be likely to use in defense

of the statements at issue in the Employer’s lawsuit)

actually

not in furtherance of their lawsuit, because the Charging Parties would not be able to

add the Employer’s clients to their lawsuit which is limited to former and current

employees of the Employer (i.e., the Employer appears to have been defending in

advance against an argument the Charging Parties would be likely to use in defense

of the statements at issue in the Employer’s lawsuit). And, while the Employer’s

lawsuit does target former employees who were prominent in the federal and state

wage-and-hour lawsuits against the Employer, it is undisputed that these employees

also made the allegedly defamatory statements, and there is no evidence that any

other employees or former employees made any similar statements targeting the

Employer.

In addition, we note that, although the Board will consider a lawsuit’s lack of a

reasonable basis as a factor in its analysis of motive, that factor alone is insufficient to

prove unlawful retaliation.33 Finally, in the absence of any clear demand for excessive

punitive damages or injunctive relief, we would not rely on the speculativeness of the

damages sought by the Employer. Therefore, despite the clear lack of merit to the

Employer’s state court lawsuit, the allegation that it violated Section 8(a)(1) should be

dismissed, absent withdrawal.

Accordingly, the Region should issue complaint, absent settlement, alleging that

the Employer violated Section 8(a)(1) by maintaining unlawfully overbroad rules. The

32 See, e.g., Atelier Condominium & Cooper Square Realty, 361 NLRB at 971, 1006;

H.W. Barss Co., 296 NLRB 1286, 1287 (1989).

33 Allied Mechanical Services, 357 NLRB 1223, 1234 (2011), enforcement denied, 734

F.3d 486 (6th Cir. 2013).

alleging that

the Employer violated Section 8(a)(1) by maintaining unlawfully overbroad rules. The

32 See, e.g., Atelier Condominium & Cooper Square Realty, 361 NLRB at 971, 1006;

H.W. Barss Co., 296 NLRB 1286, 1287 (1989).

33 Allied Mechanical Services, 357 NLRB 1223, 1234 (2011), enforcement denied, 734

F.3d 486 (6th Cir. 2013).

(b) (6), (b) (7)

Cases 27-CA-203915, et al.

- 13 -

Region should dismiss, absent withdrawal, the allegations regarding the Employer’s

discharge of Charging Party 2 and the Employer’s state court lawsuit.

/s/

J.L.S.

ADV.27-CA-203915.Response.CoPSS

(b) (6), (b) (7)(