NLRB Final Rule: “Quickie” Elections are Now Reality

As anticipated, on December 12, 2014 the NLRB announced that the final “Quickie” Election Rule will be published in the Federal Register on December 15, 2014 and will take effect on April 14, 2015. Among other changes, the rule will shorten the time between the filing of a petition and the election for union representation from approximately 42 days to as little as 10 to 14 days. The final rule is substantially similar to the rule that was invalidated by the D.C. District Court for procedural reasons in May 2012 and re-issued in draft form last February.

The NLRB contends that the rule will “reduce unnecessary litigation and delay” in the context of union organizations. In reality, the new rule will be a boon to organized labor, speeding up the union election process while limiting an employer’s ability to challenge potential voter eligibility until after the election has already taken place.

As we reported earlier this year, under the current approach, unions must gather authorization cards from at least 30 percent of employees in the unit sought to be represented in order to file a petition for an election with the NLRB.  Sometimes employers know about the organizing drive before the petition is filed, but sometimes they do not. During the pendency of the election (which was formerly about 40 days), employers have an opportunity to provide employees with information about the union, its tactics, and the costs and disadvantages of joining a union.

Under the new rule, the campaign period is further compressed to as few as 8 to 10 days, resulting in the union getting a quick vote before the employer can make its case against unionization. This means that employees will be voting based on the information provided to them by the union, which is less than complete and often less than factual. Once the employees vote in the election and the union is certified, the employees may not seek to decertify the union for at least a year, or until after the expiration of the first collective bargaining agreement, whichever is longer.

The rule also requires employers to provide the union with voter lists in electronic form, including home and mobile telephone numbers and personal email addresses when it has them available. The new rule also defers most aspects of litigation (such as contesting the appropriateness of the bargaining unit) and any appeals until after the election.

What should I do now?

Although litigation to challenge the rule is likely, employers should ready themselves to respond quickly to organizing campaigns. Steps you can take now include:

  • Educate managers and supervisors about the organizing process and what they can do to educate employees about the benefits of their current employment situation.
  • Update job descriptions and job titles for supervisors and be sure you are clear on what constitutes supervisory status under Board law.
  • Consider preparing basic election campaign information for employee distribution if the union comes knocking.

U.S. Supreme Court Finds Post-Shift Security Checks Noncompensable in Integrity Staffing v. Busk, But Employers Shouldn’t Get Too Excited

The U.S. Supreme Court, in a rare unanimous decision earlier this week in Integrity Staffing Solutions v. Busk, held that time spent by warehouse employees at Amazon.com warehouses waiting to go through security checks at the end of their shifts was “postliminary” activity not compensable under the federal Fair Labor Standards Act (“FLSA”) and its major amendment, the Portal to Portal Act (“PPA”).  While Busk may provide welcome clarity for employers who wish to implement such screens, the case probably does little to radically change the analysis of compensability of other pre- and post-shift activities beyond its narrow set of facts.

Amazon.com’s Warehouse Security Checks

Integrity Staffing is a staffing agency that provides employees to Amazon.com.  Those employees work in the company’s warehouses pulling products from shelves and getting them packaged for mailing to buyers.  Because of concerns related to employee theft, Integrity Staffing required employees to go through security checks before leaving the warehouse at the end of their shift, but did not pay employees for that waiting time.  Waiting in line and going through these security checks took about 25 minutes.

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NLRB Reverses Sodexo Off Duty Access Decision – a Crack in the Door After Noel Canning…Or Not?

Employers often maintain policies prohibiting off-duty employees from accessing their facilities.  The NLRB has maintained its “Tri-County Medical” rule for nearly 40 years:  an employer’s rule barring off-duty employee access to a facility is valid only if it (1) limits access solely to the interior of the facility, (2) is clearly disseminated to all employees, and (3) applies to off-duty access for all purposes, not just for union activity.  In two recent decisions, the Board interpreted the third prong of Tri-County Medical to significantly limit employers’ ability to prohibit off-duty access by employees.

In St. John’s Health Center, 357 NLRB No. 170 (2011), the Board invalidated a hospital’s policy that permitted employees to come onto hospital property “to attend Health center sponsored events, such as retirement parties and baby showers.”  And in Sodexo, 358 NLRB No. 79 (2012), the Board invalidated a hospital’s rule that permitted off-duty employees access for “hospital related business,” which was defined as “the pursuit of the employee’s normal duties or duties as specifically directed by management.”  The 2012 Board majority disallowed this rule because it gave the hospital “free rein to set the terms of off-duty employee access.”  Former Member Hayes dissented in both decisions, stating that, under the majority view, an employer cannot maintain a valid off-duty access policy if it permits activities “as innocuous as allowing employees to pick up paychecks or complete employment-related paperwork.”

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Nostradamus, Minimum Wage, and Paid Sick Leave

Thumbs upAllow us to pat ourselves on the back for a moment.  Prognosticating from 2013 into the future, we accurately predicted that in 2014 the Seattle Seahawks would win the Super Bowl and that the public would continue to strongly support minimum wage increases and paid sick leave laws.  (Please politely ignore our Portland Trailblazers NBA championship prediction.)

This year voters in five states overwhelmingly supported an increased minimum wage, while voters in Massachusetts and three New Jersey and California cities adopted paid sick leave.  These states and cities join a growing trend of support for “living wages” and paid sick leave laws.  Earlier this year, for instance, Seattle approved a minimum wage of $15 per hour, while Portland implemented its paid sick leave law and California became the second of now three states to give its employees paid sick leave on a statewide basis (see our posts on Portland’s law here, and California’s law).

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EEOC’s Tough Stance on Employee Separation Agreements

pharmacistEmployers like separation agreements.  Separation agreements, of course, are contracts that employees sign when their employment is terminated that allows them to be paid severance and in exchange they usually give up the right to sue their employer.  Separation agreements provide finality to employment terminations by offering employers protection from claims and potential claims.  The agreements many employers use are often standardized and have served them well for years.  But now might be the time to take another look at those documents, lest the Equal Employment Opportunity Commission (“EEOC”) looks first.

Recently, the EEOC has aggressively asserted its (re)interpretation of the law regarding the enforceability of separation (severance) agreements, suing several companies for using what it perceived to be overly broad agreements.  See, EEOC v. CVS Pharmacy, Inc. no. 1:14-cv-00863 (N.D. Ill. 2014); see also, EEOC v. CollegeAmerica Denver, Inc., no. 14-cv-01232-LTB (E.D. Co. 2014).  The EEOC doesn’t like separation agreements that do not make it sufficiently clear (in the EEOC’s opinion) that employees do not waive the right to file charges with the EEOC or participate in agency investigations, even though the employee can waive claims for damages under the statutes the EEOC enforces like Title VII or the Americans with Disabilities Act (“ADA”).  In the CVS Pharmacy and CollegeAmerica cases, the EEOC alleged the employers’ separation agreement forms constituted a “pattern or practice” of denying employees their statutory rights.  (“Pattern or practice” is significant because such cases can carry much higher penalties than a run-of-the-mill lawsuit; they can also inspire class-action lawyers to start snooping around.)

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AB 1897: California’s New Labor Contracting and Client Liability Law

sledgehammerCalifornia Governor Jerry Brown recently signed AB 1897 thereby creating new liability for businesses that engage in labor contracting.  Current California law prohibits employers from entering into labor or services contracts with a construction, farm labor, garment, janitorial, security guard, or warehouse contractor, if the employer knows or should know that the agreement does not include sufficient funds for the contractor to comply with laws or regulations governing the labor or services to be provided.  AB 1897, which goes into effect January 1, 2015, greatly expands this law by requiring all “client employers” to share with “labor contractors” all civil legal responsibility and civil liability for all workers supplied by that labor contractor for the payment of wages and the failure to secure valid workers’ compensation coverage.

AB 1897 defines “client employers” as any business entity “that obtains or is provided workers to perform labor within its usual course of business from a labor contractor” and “labor contractors” as any individual or entity “that supplies, either with or without a contract, a client employer with workers to perform labor within the client employer’s usual course of business.”  While there are limited exceptions, the practical effect of these broadly defined terms is to impose joint liability on employers for the employment violations of their subcontractors and staffing agencies. All is not lost, however.  The new law does not prohibit employers from agreeing to any otherwise lawful remedies against labor contractors for indemnification from liability created by acts of the labor contractor.  Second, the law only applies to employers who are provided with workers to perform labor “within the client employer’s usual course of business.”  As such, independent contractors are excepted so long as a bona fide independent contractor relationship exists.

This new law confirms that California businesses must continue to do everything in their power to ensure that their subcontractors and staffing agencies are complying with all aspects of California’s wage and hour laws.  In addition, employers must ensure that any contracts with such parties contain valid indemnification provisions.  It is only by taking these and other steps that employers can protect their businesses from any loss or harm (including attorneys’ fees) arising from claims by the subcontractor’s or staffing agencies’ employees.

What Does Alaska’s and Oregon’s Legalization of Marijuana Change for Employers? Answer: Probably Not Much.

In this week’s mid-term election on November 4, Oregon, Alaska, and the District of Columbia became the latest jurisdictions to pass referendums decriminalizing the recreational possession and use of small amounts of marijuana.  They join Colorado and Washington, which took this step in 2012.  Oregon’s law becomes effective in July 2015; Alaska’s probably in February 2015.

Each of these laws is slightly different (read the full text here of the measures in Oregon, Alaska, and D.C.).  But employers in all these jursidcitions may be wondering about the same question:  does this affect my company’s anti-drug policy or drug testing program and if so, how?

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NLRB Attempts to Make an End Run Around Courts Invalidating its Rulings on Arbitration Agreements

FootballOn October 28, 2014, the National Labor Relations Board (“NLRB”) issued its decision in Murphy Oil USA Inc., once again attempting to prohibit employers from requiring employees to enter into agreements to arbitrate employment disputes if those agreements preclude collective or class action litigation. As we have blogged about in the past, this new decision runs contrary to an overwhelming majority of federal district and appellate court decisions rejecting and criticizing the Obama NLRB’s previous attempt to so extend the law.  A copy of the Murphy Oil USA decision can be found here.

In Murphy Oil, the NLRB split 3-2 along party lines, with the majority finding that gas station chain Murphy Oil’s arbitration agreements were unlawful.  In so doing, the NLRB reaffirmed its controversial January 2012 DR Horton ruling, where the Board ruled that such agreements conflict with employees’ rights to engage in concerted activity under the National Labor Relations Act.  The Fifth Circuit Court of Appeals refused the enforce the Board’s order, and the NLRB declined to seek review from the U.S. Supreme Court.  In what some might say is refusing to take “no” for an answer, the NLRB is trying to resurrect its DR Horton decision.

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Washington Supreme Court Finds Employer’s Discretionary Bonus Not Unlawful “Rebate” Under Wage Rebate Act (“WRA”)

In a 5-4 decision, the Washington Supreme Court has ruled in an employer’s favor and clarified what are, and are not, statutory “wages” and unlawful wage “rebates” under Washington State’s Wage Rebate Act (“WRA”), RCW 49.52 et seq.  The case is LaCoursiere v. CamWest Development, No. 88298-3 (Wash. Oct. 23, 2014) (slip op.).  Camwest Development (“CamWest”) was represented by Stoel Rives attorneys Jim Shore and Karin Jones.

CamWest, a real estate development company, created an optional bonus program via individual written contracts with its participating managers. The bonus program was intended to provide the potential for larger manager bonuses in profitable years, but it also carried a downside risk of smaller, or no, bonuses in leaner years.  Participating managers’ contracts made expressly clear that the decision whether or not to award an annual bonus, and the amount of any bonus, was in CamWest’s discretion.  Managers did not have to participate in this higher reward/higher risk bonus program and could instead choose to receive a safer, set bonus.  Managers who chose to participate in the optional bonus program were required by its terms to contribute a percentage of each annual bonus into a capital account in a separately formed managers LLC.  The LLC would in turn loan money to CamWest to be invested in real estate projects that CamWest would develop.  The hope and intention at the time was that this arrangement would yield higher profit and bonuses for participating managers. Manager contributions to the LLC vested at 20% per year.

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Seven Steps for Employers to Address the Ebola Threat (Step 1: Don’t Panic!)

This might be too much.  But be prepared.

This might be too much. But be prepared.

The recent outbreak of the Ebola virus in West Africa, with the few isolated cases occurring in the United States, is spurring employers to review their emergency response plans for pandemic preparedness.  In seven steps, this writing sets forth best practices for pandemic preparedness, considerations regarding travel during a pandemic, and addressing employees’ immediate concerns without running afoul of relevant employment laws.

1.        Don’t Panic and Stay Informed

With any emergent threat, accurate and reliable information is critical; with a pandemic threat, not having accurate and reliable information causes panic.  Note that as of this writing, the current Ebola outbreak has not been declared a pandemic (meaning, a global epidemic), but employers should monitor communications from the Centers for Disease Control and Prevention (CDC) for up-to-date information.

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