Employer Acted Improperly By Disciplining Employee For Public Criticism Of Terms And Conditions

Written by Robert G. Brody on November 25, 2000

In Allstate Ins. Co., 332 N.L.R.B. No. 66 (2000), the Board held Allstate acted improperly by disciplining an employee for publicly criticizing the terms and conditions of her employment.  Carolyn Penzo, a neighborhood office agent for Allstate Insurance Company, was disciplined for criticizing her terms and conditions of employment in an interview with Fortune magazine.  The day after the publication, Allstate gave Penzo a “job in jeopardy” disciplinary warning due to the unauthorized contact with the media.

Section 2(11) of the National Labor Relations Act defines “supervisor” as

any individual having authority, in the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibly to direct them, or to adjust their grievances, or effectively to recommend such action, if in connection with the foregoing the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment.

In its defense, Allstate argued Ms. Penzo was a supervisor or manager and therefore such action was lawful.  However, the NLRB found Ms. Penzo was an employee and therefore covered by the National Labor Relations Act.  Carolyn Penzo was primarily paid by commission, received a modest salary, a limited office expense allowance and could hire and fire staff.

The Board found any authority Penzo exercised over assistants was in her own interest, not in the interest of Allstate.  Although Ms. Penzo was able to hire and set wages for assistants, she had to use her own funds if she exceeded the allowance given to her by Allstate and therefore she was acting at her own financial risk.  Further, the Board added she had not exercised any such authority for several years, which raised the question of whether she actually offshore merchant account possessed the authority at all.

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Related Topics: Labor Management Issues, Legal Updates, NLRB

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Robert G. Brody is the founding member of Brody and Associates, LLC. He has been quoted and published in national publications and appears as a guest T.V. commentator on contemporary Labor and Employment issues. Learn More