Breaking News: Last week, the National Labor Relations Board (NLRB) announced that it’s moving to shorten the length of time in which a labor union certification election is held.
The Basics: According to the Board, this new rule would:
- Allow for electronic filing and transmission of election petitions and other documents;
- Ensure that employees, employers and unions receive and exchange timely information they need to understand and participate in the representation case process;
- Streamline pre- and post-election procedures to facilitate agreement and eliminate unnecessary litigation;
- Include telephone numbers and email addresses in voter lists to enable parties to the election to be able to communicate with voters using modern technology; and
- Consolidate all election-related appeals to the Board into a single post-election appeals process.
Impact on Employers: Currently, the average time between when a union files a representation petition—the first step in organizing a workplace into a union—is 38 days, but this new rule would reduce that to as few as 10 days. Consequently, unions could launch guerrilla-organizing campaigns that, because of the compressed timeline, deny management its legal right to discuss with their employees whether a union has anything worthwhile or constructive to offer them or the company.
As noted in a letter from the U.S. House of Representatives labor committee to NLRB chairman Mark Gaston Pearce (a former union attorney), “This rule will seriously limit employer free speech and undermine employee free choice.” The NLRB announcement also drew criticism from business groups such as the National Retail Federation.
Furthermore, employers need to be concerned about the impact on their employees’ privacy. As unions are exempt from some state laws against stalking or trespassing when their members are engaged in organizing activities, as a report from the U.S. Chamber of Commerce revealed in 2012, questions as to how and to what extent unions will use employees’ personal information remain unanswered.
What’s Next: The Board will be accepting public comments on the new proposed rulemaking through April 7, 2014. The Board will also hold a public hearing during the week of April 7.
Bottom line for Employers: With a clear Democratic majority, the Board will likely move quickly to implement this new rule. However, on March 5, 2014, the U.S. House of Representatives Education and Workforce Committee will be holding a hearing on the ambush election proposal. We will continue to keep you updated as the NLRB continues to push its pro-union agenda.
As union membership continues to tumble, organized labor is getting desperate. First, the unions sought help from Washington: the Employee Free Choice Act, the RAISE Act, and the President's unconstitutional "recess" appointment to the National Labor Relations Board were all attempts by labor friendly politicians to help unions gain access to the non-union American workforce. Now, federal agencies are riding to Big Labor's rescue, using the power of the executive branch to help organizers recruit more dues-paying union members.
Earlier this year, the Occupational Safety and Health Administration (OSHA)-the Department of Labor's workplace safety watchdog-issued a guidance letter that offered a new interpretation of a long-standing rule.This new interpretation will allow labor union officials to participate in safety inspections at the request of an employee even if the employer is non-union.
During an OSHA safety inspection, employees are entitled to have an observer accompany the government investigators on their tour of the workplace. For nearly half a century, this observer was understood to be an actual employee of the workplace in question; indeed, OSHA's own interpretative manual uses the word "employee" when describing the observer. But in this new guidance letter, written by OSHA Deputy Assistant Secretary Richard E. Fairfax, labor union officials could participate in safety inspections at the request of an employee-even if the employer is non-union.
By re-interpreting this "observer" law in such a expansive fashion, OSHA is giving unions an unprecedented opportunity to not only gain access to non-union facilities-an organized labor "Trojan Horse"—but to advance the idea that, without union representation, employees' personal safety is at risk
While ostensibly serving as an "observer," union representatives will be able to spread a pro-union message among employees, a sales pitch reinforced by the sudden discovery of a number of potential safety hazards and OSHA violations. For the union's gambit to succeed these alleged violations need not be legitimate; they only need to generate concern among the company's workforce that management is fostering potentially unsafe working conditions. And with an organizer, masquerading as an observer, on-site, the solution to this sudden spike in safety violations will be offered: union representation.
Employers can still fight back. First, companies must be prepared for the scenario described above. When an OSHA inspector and an organized-labor observer arrive at your worksite, it's critical to demonstrate an interest in identifying and remedying any potential safety issues. Such concern, however, does not mean being bullied by an "observer" attempting to undermine employee's faith in management. For instance, have an OSHA expert, whether it's an attorney or a member of your management team, accompany the "observer" on the tour of the plant. Be prepared to counter any exaggerated or erroneous violations made by the observer—a critical step in undermining the union's credibility, while demonstrating to employees that management takes safety seriously. Furthermore, make sure the "observer" is only allowed to participate in the actual inspection; don't let them wander the facility unsupervised.
Already struggling with a massive increase in federal regulations, health-care "reforms," and a sea of red tape, employers must now contend with a federal government determined to reverse the decline in organized labors membership roles. But employers can, and, indeed, must, take proactive steps to protect their rights, and the rights of their employees.
Last month, unions across America received a significant boost when the Sixth Circuit Court of Appeals upheld a 2011 ruling by the National Labor Relations Board that allowed unions to organize smaller “micro units” of workers.
The 2011 case, known as Specialty HealthCare, involved a union that wanted to try and organize a group of nonprofessional nursing assistants—despite the employer’s argument that other nonprofessional employees should have been included in the unit. In its ruling, the Board upheld the union’s position, while noting that if an employer believes employees should be included in a particular unit, it is the employer’s burden to demonstrate those workers “share an overwhelming community of interest”
In its review of the Specialty HealthCare decision, the Sixth Circuit determined that the Board has “wide discretion,” in determining the constitution of a bargaining unit,”—unless “the employer establishes that [the Board’s decision] is arbitrary, unreasonable, or an abuse of discretion.”
The Board’s decision in Specialty HealthCare turned 75 years of labor law on its head. And now, the Sixth Circuit has doubled-down on this seismic legal shift by affirming the Board’s decision. Yet, these rulings might still backfire on organized labor. Often, unions use micro units to gain a foothold in an employer’s workforce—the proverbial camel’s nose under the tent. In order to prevent unions from using the Specialty HealthCare decision to establish organizing beachheads, employers are now going to fight harder to keep their companies union-free.
Such an unanticipated consequence might toss a bit of cold water on organized labor’s post-Specialty HealthCare celebrations, but employers should still be wary: The Sixth Circuit’s decision will not only pave the way for an increase in union organizing activity; it will likely also embolden a National Labor Relations Board that already seems intent on giving organized labor an unfair advantage.
Do pre-employment criminal background checks discriminate against minorities? Not according to the U.S. District Court for the District of Maryland.
Last week, the U.S. District Court for the District of Maryland ruled that the Equal Employment Opportunity Commission failed to show that a nationwide event planning company’s use of criminal background and credit-checks resulted in a disparate impact against black and make job applicants.
In a stunning rebuke to the controversial Enforcement Guidance Regarding Consideration of Arrest and Conviction Records in Employment Decisions, the District Court hammered the EEOC’s evidence, dismissing its analyses as “flawed,” “skewed,” “rife with analytical errors,” “laughable,” and “an egregious example of scientific dishonesty.” Specifically, the court determined that one EEOC expert’s analysis focused on an unrepresentative section of applicants to fit the commission’s theory that pre-hire employee criminal background checks have a disparate impact on minorities.
Yet, the reports furnished by the EEOC were not the only thing that concerned the court; the EEOC also failed to meet its burden of raising triable disparate impact claims because “the commission did not identify a specific employment practice responsible for the alleged impact.” Citing Wards Cove Packing Co. v. Atonio, the court held that “under Title VII, it is not enough to show that ‘in general’ the collective results of a hiring process cause disparate impact. Statistical analysis must isolate and identify the discrete element in the hiring process that produces the discriminatory outcome.”
While the EEOC is still considering an appeal, the court’s ruling was clear: “it is simply not enough to demonstrate that criminal history or credit information has been used,” to advance a discrimination claim based on disparate impact. Granted, the issue of criminal background checks and disparate impact claims remains far from settled, last week’s U.S. District Court ruling should offer encouragement to employers drowning in red tape and over-zealous regulation.
Earlier this month, the United States Court of Appeals for the Second Circuit upheld a controversial NLRB decision—Mezonos Maven Bakery, 357 NLRB No. 47—regarding the award of backpay to undocumented aliens. Specifically, this case considered whether “undocumented workers who have engaged in fraud or criminal activity in violation of the Immigration Reform and Control Act (IRCA) in obtaining or continuing their employment are entitled to backpay where their employer…hired and retained them knowing they were undocumented.”
Finding that the instant matter was materially different from the Board’s decision in Hoffman Plastic, the administrative law judge initially found in favor of the employees. In Hoffman Plastic, the Board‘s holding precluded backpay in a scenario where the alien “violates the IRCA by presenting the employer with fraudulent documents,” and the “employer is unaware of the fraud.”
Specifically, the ALJ ruled that the instant matter was materially different from Hoffman Plastic because the employer—not the employee—violated the IRCA. As a result, the ALJ concluded that a backpay remedy was necessary. The Board, however, disagreed.
The Board Applies Hoffman Plastic
In August 2011, the Board declined to adopt the ALJ Order. According to the Board, Hoffman Plastic’s “holding is categorically worded” with “no distinction based on the identity of the IRCA violator.” As a result, Hoffman Plastic “broadly precludes backpay awards to undocumented workers regardless of whether it is they or their employer who has violated the IRCA. Indeed, “regardless of which party violated the IRCA, the result is an unlawful employment relationship.
A Matter of Public Policy
The Second Circuit Court of Appeals has weighed in as well, upholding the Board’s interpretation of Hoffman Plastic. In its decision, the Second Circuit places particular emphasis on public policy concerns: “Awarding backpay would ‘not only trivialize the immigration laws,” but would also “condone and encourage future violations.” Quoting Hoffman Plastic, the Second Circuit addressed the ALJ’s suggestion that aliens who did not present fraudulent documents but who are in the U.S. illegally, noting that it sees “no reason to think that Congress nonetheless intended to permit backpay where but for an employer’s unfair labor practices, an alien-employee would have remained in the United States illegally, and continued to work illegally, all the while successfully evading apprehension by immigration authorities. “
The Second Circuit did. However, remand the matter back to the Board for consideration of one additional issue: Whether to grant petitioners requested remedy of reinstatement contingent on the production of work authorization documents.
The Fourth Circuit Court of Appeals has joined the DC Circuit and Third Circuit in holding President Barack Obama’s recess appointments of three National Labor Relations Board members were unconstitutional.
The dispute arises from three NLRB appointments the President made on January 4, 2012—appointments made while the Senate was on a holiday break but still in session. Although the administration claimed that “the break qualified as a recess because there were not enough senators at work to conduct business,” the Fourth Circuit—in addition to previous holdings by the DC Circuit and the Third Circuit—disagreed. Specifically, the court held that “the framers of the Constitution meant to limit recess appointments to the period between congressional sessions, and that’s how it was done until a 1921 attorney general’s opinion.”
As a result of this decision, and the previous circuit court decisions, hundreds of NLRB decisions may possibly be invalidated.
The U.S. Supreme Court has agreed to hear the D.C. case.
Connecticut Legislature Restricts the Use of Non-Compete Agreements
Late last month, the Connecticut General Assembly passed “An Act Concerning Employer Use of Noncompete Agreements” (“Act”). Effective October 1, 2013, this new law will dramatically alter how employers approach mergers and acquisitions.
Specifically, under this new law, if, after a merger or an acquisition, an employee is being hired by, or continuing his or her employment with, the surviving entity, and the surviving entity intends to bind the employee to noncompetition restrictions, the employer must provide the employee with a written copy of the noncompete agreement and at least seven (7) days to consider signing the agreement.
While inconvenient for employers, this Act, on its face, isn’t particularly alarming. However, the practical implications are considerable. For example, as a result of this new law, employers may be forced to inadvertently give employees advance notice of possible business transactions, such as closings or consolidations. Ultimately, notice of plant closings resulting from mergers or acquisitions will be dictated by legislative fiat—not business necessity or the unique culture of each organization.
Furthermore, employers must also now consider the possibility that an existing employee might balk at signing a new non-compete agreement, thereby complicating—and perhaps even jeopardizing—a merger or acquisition.
Bottom Line for Employers
Effectively navigating a business merger or acquisition has never been easy. And with passage of the new Act, life for Connecticut’s employers just became a bit more complicated. For assistance in adhering to this new regulation contact Bud O’Donnell.
On Tuesday, May 7, 2013, the United States Court of Appeals for the District of Columbia issued another decision against the National Labor Relations Board. This time the court found that the NLRB had exceeded its authority when it issued the rule requiring employers covered by the National Labor Relations Act to post a notice informing workers of their right to unionize. Previously, this same court in January 2013 had invalidated the NLRB recess appointments made by President Obama. That case, Noel Canning v. NLRB, has now been appealed by the NLRB to the U.S. Supreme Court.
In this most recent decision, National Association of Manufacturers v. NLRB, the court concluded that the NLRB’s rule was in violation of the National Labor Relations Act because it subjected an employer to an unfair labor practice for the failure to post this notice; and it infringed upon the First Amendment right to free speech by forcing a company to disseminate a view that it did not agree with, i.e. the right to unionize.
The National Labor Relations Act includes a provision, Section 8(c) that grants employers the right to express “any view, argument or opinion, or dissemination thereof, whether in written, printed, graphic or visual form.” As long as there is no threat of reprisal these communications are protected from being treated as unfair labor practices. The court stated that the NLRB’s rule violated Section 8(c) because, “the right to disseminate another’s speech necessarily includes the right to decide not to disseminate it.”
While this case represents another significant setback to the NLRB, the court’s decision also raises the possibility that its rationale could be extended to other federal notice-posting requirements that have been imposed on employers by various agencies, i.e. OSHA and the EEOC. It remains to be seen whether this NAM case generates that type of litigation.
The DOL’s Wage and Hour Division has released a new FMLA Poster, which reflects the FMLA Final Rule to Implement Statutory Amendments. Changes to the FMLA regulations made in this Final Rule, including military caregiver leave for a veteran, qualifying exigency leave for parental care and the special leave calculation method for flight crew employees, become effective on March 8, 2013. (NB: Some provisions of the FY 2010 NDAA and the Airline Flight Crew Technical Corrections Act, such as the expansion of qualifying exigency leave to families of members of the Regular Armed Forces and the special eligibility hours of service requirement for flight crew employees, became effective as of the enactment date of those statutes. See 77 FR 8962 (Feb. 15, 2012)).
The new FMLA poster may be posted immediately, and must be posted to replace the existing FMLA poster by March 8, 2013.
One of my first jobs was that of a dishwasher. In the “back of the house,” I learned that cleanliness was most important to the servers—those who made the “big money.” I heard their talk, how attentive they need to be to their customers, and how every little effort counted toward the almighty tip. It was all about the tip. Every server hustled to be attentive, to run to their guests with extra forks, knives, spoons, plates and napkins.
From there, I became a cook’s assistant. As the restaurant showcased the kitchen in the “front of the house,” I could see the servers greeting guests, and doing everything in their power to be gracious and attentive. If the plates were not perfect in appearance, the server would carefully adjust the plate’s content for the best presentation. I was told, again, that it was all about the tip.
Next, I bussed tables. Not only did I clean and re-set the tables swiftly to help the servers turn the tables for more guests, but I filled water glasses and bread baskets. When I noticed a customer looking for their server, I would approach to see if I might be of assistance. Usually an extra plate, fork or napkin was the cure. Other times, the steak might need a bit more fire. Improving the guests’ dining experience trickled down to me: the servers showed their appreciation for my attentiveness by tipping out to me. Yes, I had come to appreciate that it was all about the tip.
My promotion to server was big—now I could earn tips. The small hourly wage reduced by the tip credit was important, but it paled in comparison to the tips. I worked hard and strived to be the best server in the restaurant. I worked with professional servers. For me, it was a job to get me through the end of high school, then college and then law school. Nevertheless, I saw the importance of guest service and winning the big tip.
It has been many years since I waited tables. The perpetual dream of forgetting to bring something to some table never goes away. Now, as an attorney, I represent the restaurant industry that taught me values such as guest attentiveness and the goal of prompt service.
Claims by some servers suggesting that many of their duties are not service-related or are “incidental” to service, so that they may void the tip credit and permit their counsel to recover fees in class actions, are troublesome. Have they forgotten what goes into securing the big tip? I haven’t.
Glenn Duhl represents restaurants and restaurant groups in defense of employment-related claims, including tip credit litigation under the Fair Labor Standards Act and corresponding provisions of state law.