NLRB 2008 Report Shows Efficient, Aggressive Enforcement of Labor Law
Ronald Meisburg, General Counsel for the National Labor Relations Board (NLRB) issued his annual Summary of Operations memo on October 29, 2008. (The NLRB is the federal agency that enforces our country's labor laws and conducts union elections.) Mr. Meisburg's memo is full of interesting news and developments on all facets of the NLRB's operations. To read the complete memo, click here. If you want the Cliff's Notes version, here you go:
- Case intake is up: ULP cases are up 1.6%, from 22,147 in FY 2007 to 22,501 in FY 2008. New representation cases are up 2.3% from 3,324 to 3,400.
- Elections are being held sooner: the NLRB closed 83.5% of all representation cases within 100 days, exceeding its target of 80%. 93% of all initial union representation elections were conducted within 56 days of the filing of the petition, with a median of 39 days from filing.
- ULPs are being investigated faster: The Board closed 68.1 percent of all ULP cases within 120 days, meeting its target of 68%, and closed 75.2% of meritorious ULP cases within 365 days, meeting its target of 75%.
- The NLRB is winning a lot: Its Regional Offices won 90.8% of Board and Administrative Law Judge unfair labor practice decisions in whole or in part in FY 2008 (up 5% from 2007), and it recovered a total of $70,001,594 on behalf of employees as backpay or reimbursement of fees, dues, and fines. It obtained reinstatement for 1,564 terminated employees.
- The NLRB is using injunctions. The Board authorized a total of 28 Section 10(j) injunction cases in FY 2008, as compared to 25 in FY 2007. The “success rate” (the percentage of 10(j) cases in which the NLRB achieved either a satisfactory settlement or substantial victory in litigation) was 84%.
- The NLRB is more efficient: It met all three of its primary goals, closing 83.50% of all
representation cases within 100 days (target 80%), 68.10% of all unfair labor practice cases within 120 days (target 68%), and 75.22% of all meritorious unfair labor practice cases within 365 days (target 75%).
What does this mean for employers? The NLRB is more efficient and pushing cases to resolve more quickly, which may give employers less time to respond to petitions for election. Also, the Board continues to be more aggressive in litigation and in seeking injunctions, which is rarely good news for employers. In short, don't take the NLRB lightly.
California Supreme Court to Review Rest and Meal Break Case
Back in August, we reported a California Court of Appeals decision that employers must provide rest and meal breaks, but are not required to control that the breaks were taken. Last week, the California Supreme Court granted review of that case - it might uphold the decision, but it might also overturn it.
The grant of review means the lower court case has no effect until the Supreme Court rules. California employers should return to policing meal and rest breaks to make sure employees take them, at least until a new decision comes from the California Supreme Court, probably early next year. Watch the Stoel Rives World of Employment for updates!
Homeland Security Issues Final Supplemental "No-Match" Rule
Yesterday the Department of Homeland Security (DHS) issued a supplemental final rule regarding employers' obligations upon receiving a "no match" letter from the Social Security Administration (SSA). (A "no match" letter states that an employee's reported Social Security number appears invalid). The final rule is identical to the department's previous rule, which was blocked from implementation by a California federal district court; however, DHS said it hopes that additional explanatory material provided in the rule will address the issues raised by the court. For more information, read DHS's press release.
Under the final rule, the SSA will be required to include in all no-match letters information telling employers that they are required to resolve discrepancies or risk legal liability. The rule also provides employers with a "safe harbor" provision, which provides steps employers may take when they receive a no-match letter. DHS will not use anemployer's receipt of a no-match letter as evidence to find that it violated the law by knowingly employing unauthorized workers as long as the employer follows the safe harbor rules. For text of the final rule, click here.
The final rule will not be effective until published in the Federal Register, and even then it will not go into full effect until the federal court lifts its injunction against the rule - assuming the court is convinced the final rule is lawful. Stay tuned to the Stoel Rives World of Employment for further updates.
Fourteen Million Reasons Not to Misclassify Employees as Independent Contractors
A class of current and former FedEx Ground drivers misclassified as "independent contractors" will receive an additional $9 million in reimbursements for employment-related expenses, an appointed referee ruled October 20. This award will be combined with a previous award of $5.3 million the drivers received in 2006. The award will reimburse the drivers for such expenses as truck maintenance and registration, uniforms, fuel, and liability insurance. For more information on the drivers' lawsuit, click here.
As this case shows, employers run a substantial risk by misclassifying its employees as "independent contractors." Not only can the misclassified employees bring lawsuits (for any number of reasons, such as unpaid overtime, minimum wage violations, family and medical leave issues, and more), but state and federal tax agencies can bring collection actions seeking unpaid payroll taxes, unemployment taxes and penalties.
Concerned that your independent contractor might be a misclassified employee? The IRS has this handy information on how to determine whether the employee is correctly classified. There is even an IRS form (Form SS-8) that you can file to seek the Service's help in determining if your employee is correctly classified. Of course, if you believe that you have misclassified employees working as contractors, it might be a good time to contact your labor and employment attorney.
Sexual Harassment Fail
It's a slow news day here at the Stoel Rives World of Employment. No Supreme Court cases, no big lawsuits, not even an obscure city ordinance to report on. But here's an amusing photo, courtesy of the Fail Blog:
Come to think of it, I believe I spoke at that seminar....
Driving Not a "Major Life Activity" Under ADA
Is driving a car a major life activity under the Americans with Disabilities Act (ADA)? No, the Tenth Circuit Court of Appeals recently concluded, joining two other federal circuit courts that have held that just because a person cannot drive does not mean that person meets the legal definition of "disabled." Kellogg v. Energy Safety Services, Inc.
Kellogg, who has epilepsy, sued her employer alleging disability discrimination. Kellogg asserted that because she is not allowed to drive due to the risk of seizure, she is substantially limited in the major life activity of "driving." After Kellogg prevailed on her claim at a jury trial, The Tenth Circuit reversed. (The Tenth Circuit covers Oklahoma, Kansas, New Mexico, Colorado, Wyoming, and Utah.)
The court held that driving is merely a "means to an end," and not a major life activity in and of itself. For some plaintiffs, an inability to drive may prevent them from engaging in other major life activities (such as working), but because Kellogg presented no evidence that she was substantially impaired in any activity except driving, she failed to prove she was "disabled." The Tenth Circuit thus joins both the Second and Eleventh Circuits in holding that driving is not a major life activity.
Don't expect Kellogg to set precedent for long: this case almost certainly would have been decided differently under the ADA Amendments Act (ADAAA), which goes into effect January 1, 2009. Under the much broader definition of "disability" under the ADAAA, Kellogg's epilepsy alone almost certainly would have qualified her for the protections of the ADA. For more on the ADAAA, check out the Stoel Rives World of Employment's coverage, here.
Ninth Circuit Upholds San Francisco Health Care Ordinance
The Ninth Circuit Court of Appeals recently upheld a San Francisco city ordinance that requires many employers to either contribute a specified amount toward their employees' health care costs on a regular basis or pay into a city health care fund for San Francisco residents.
The San Francisco Health Care Security Ordinance went into effect on January 9, 2008. It is a "pay or play" health care plan, as it requires employers either to "pay" for health care or "play" by the rules of the city health care fund. The ordinance applies to for-profit employers with at least 20 employees and non-profit employers with at least 50 employees. For more information on the ordinance, including compliance information, click here.
In Golden Gate Restaurant Association v. San Francisco, a group of employers brought a lawsuit seeking the federal court to declare that the San Francisco ordinance is preempted by the federal Employee Retirement Income Security Act of 1974 (ERISA). The Ninth Circuit disagreed, and the ordinance will continue to be in effect. This decision may pave the way for other state and local governments to pass similar "pay or play" health care laws, knowing that they will likely withstand a legal challenge.
New Federal Legislation Would Penalize Employers' Use of "Independent Contractors"
The U.S. Congress is currently considering legislation that would impose significant penalties on employers who improperly classify employees as "independent contractors" to avoid paying for benefits.
The Employee Misclassification Prevention Act (S. 3648) was introduced in the Senate on September 29, and is sponsored by Senators Edward M. Kennedy (D-Mass.), Barack Obama (D-Ill.) and John Kerry (D-Mass.). Features of the bill include:
- Amending the Fair Labor Standards Act (FLSA) to prohibit the misclassification of an employee as an independent contractor, providing for liquidated damages and civil penalties of up to $10,000.
- Requiring employers to keep records on and notify workers of their employment or independent contractor classification and their right to challenge that classification.
- Requiring state unemployment insurance agencies to audit employers who misclassify employees.
- Allowing the Department of Labor and the Internal Revenue Service to share information on cases where employers misclassify workers.
- Requiring the Department of Labor to perform targeted audits focusing on employers in industries that frequently misclassify employees.
- Directing the Department of Labor to establish a Web site that summarizes the rights of employees under the FLSA and other federal laws.
A companion bill, H.R. 6111, was introduced in the House in May. Don't expect this bill to become law as long as President Bush is in the White House, but with a likely democratic majority in Congress and a new President, passage of the bill appears very likely. Employers should be aware of the existing risks of incorrectly classifying employees as "independent contractors," including claims for unpaid overtime, minimum wage claims, benefits claims, workers' compensation liability, and tax penalties.
Free Lunch Seminar on California Law for Oregon Employers October 30
Do you have an office or a facility in California? Do you have any employees who work in California? If you've had to confront the challenges of complying with California's unique employment laws and regulations, you'll want to join us.
We will have a lively discussion led by Tony DeCristoforo, a labor and employment law specialist based in our Sacramento office, and Victor Kisch, a Portland based attorney who practiced in California for about a decade. They will summarize the important differences between Oregon and California employment laws.
- Where? Stoel Rives' Portland Office
- When? 11:30 a.m., October 30, 2008
- Cost? Free! As Tom Peterson would say, "Free is a very good price!"
For registration information, click here.
Washington: Public Policy Against Domestic Violence Supports Claim of Wrongful Discharge
Is a Washington employer prohibited from terminating an at-will employee because she took leave from work to protect herself from domestic violence? Yes, according to last week's opinion from the Washington Supreme Court in Danny v. Laidlaw Services.
In Danny, the plaintiff sued her former employer in federal court, alleging she was terminated for taking leave from work in order to respond to domestic violence. The federal court certified to the Supreme Court the question of whether Washington has a clear public policy that would support Danny's claim of wrongful discharge. The Washington Supreme Court responded in the affirmative, stating that Washington "has...established a clear mandate of public policy of protecting domestic violence survivors and their families and holding their abusers accountable."
Washington employers take note: if you have an employee who is taking time off from work - perhaps in violation of your attendance policy - to respond to an incident of domestic violence or to testify against an abuser, terminating that employee will be extraordinarily risky. A safer course may be to work with that employee to find a way to allow her or him to get the time off that she or he needs, and then return to work. Need more help on how to work with an employee who is dealing with domestic violence? Check out these resources from the Family Violence Prevention Fund.
U.S. Supreme Court to Hear Six L&E Cases This Term
The U.S. Supreme Court opened its 2008-2009 term on October 6 with six labor and employment law cases on its docket. (For docket information and questions presented, click on the name of the case).
- Locke v. Karass: may a public employee union may charge nonmembers for representational costs for litigation expenses incurred by the international union on behalf of other bargaining units?
- Kennedy v. Plan Administrator for DuPont Savings & Investment Plan: is a qualified domestic relations order (QDRO) is the only valid way under ERISA for a divorcing spouse to waive his or her right to the other spouse's pension benefits?
- Crawford v. Metro. Gov't of Nashville & Davidson County: Is an employee who cooperates with an employer-initiated investigation into alleged unlawful discrimination protected by Title VII's anti-retaliation provisions?
- Ysursa v. Pocatello Education Ass'n: does an Idaho law that prohibits local government employers from allowing employee payroll deductions for political activities violate the First Amendment free speech rights of unions and their members?
- 14 Penn Plaza LLC v. Pyett: do employees covered by a collective bargaining agreement which providies that statutory employment discrimination claims must be pursued through the contractual grievance and arbitration procedures have a right for a court to decide their discrimination claims?
- AT&T Corp. v. Hulteen: must an employer give full service credit for purposes of calculating retirement benefits for pregnancy leaves taken before the Pregnancy Discrimination Act of 1978 if the plan gave full credit for other types of temporary disability leaves?
Some of these cases (such as the Penn Plaza and Crawford cases) have the potential to make significant changes in existing law. Stay tuned to the Stoel Rives World of Employment for developments as they occur!
Oregon: Arbitration Agreements Need Not Contain Express Waiver of Jury Trial
Late last month, the Oregon Court of Appeals held that an arbitration agreement between an employer and an employee need not contain an express waiver of the employee's right to a jury trial to be enforceable. The opinion can be read here: Hays Group, Inc. v. Biege.
In Hays Group, a trial court denied an employer's motion to compel arbitration of an employee's wage and age discrimination claims on the basis that the arbitration agreement did not contain an express waiver of the right to a jury trial, just a statement that claims would be “settled by final and binding arbitration.” The Court of Appeals reasoned that the employee did knowingly waive his right to a jury trial, given that “[c]laims cannot be settled by ‘final’ and ‘binding’ arbitration except by a waiver of the right to a jury trial.”
This decision gives Oregon employers some added leeway in drafting arbitration agreements. The best practice remains to include an express waiver of the right to a jury trial - there is no harm in including one, and it helps cut off any employee's arguments that he or she did not understand the scope of the agreement.
Oregon employers should also be aware that, pursuant to a new statute effective January 1, 2008, all employee arbitration agreements must be presented in a "written employment offer" that must be "received" by the employee at least two weeks before the first day of the employee's employment. Arbitration agreements may be presented to current employees, but will not be enforced unless entered into at the time of a "bona fide advancement" (such as a promotion).
Governor Schwarzenegger Signs Two New Employment Laws, Vetoes Many Others
California employers take note: late last month, the Governator signed a few new employment laws, but vetoed many others.
Two bills are now law in California:
- A.B. 10, which immediately exempts from state hourly overtime pay requirements computer professionals earning more than $75,000 a year .
- A.B. 2001, which gives local governments authority to establish whistleblower hotlines, and requires cities and counties to protect the confidentiality of whistleblowers.
The bills that Governor Schwarzenegger vetoed include:
- A.B. 2279, which would have prohibited employers from discriminating in hiring, termination, or employment conditions based on the use of medical marijuana.
- A.B. 437, which would have reversed (for state law purposes only) the "paycheck rule" on equal pay claims as set forth in the U.S. Supreme Court's 2007 decision in Ledbetter v. Goodyear Tire & Rubber Co.
- A.B. 2386, which would have changed the rules for farmworkers' union elections, providing for either secret mail-in ballots or a traditional ballot box election.
- A.B. 3063, which would have prohibited employers from asking job applicants about arrests or detentions that did not result in convictions, or about participation in pre-trial or post-trial diversion programs.
- S.B. 1717, which would have doubled the amount of weeks a worker could receive disability pay.
Starbucks Settles NLRB Charge With Wobbly Organizer
The New York Times is reporting that Starbucks has settled with the National Labor Relations Board an unfair labor practice claim filed by a former employee who alleged he was terminated for attempting to organize his coworkers to join the Industrial Workers of the World, aka "the Wobblies."
Under the terms of the settlement, Starbucks will post a notice in the employee's store for 60 days informing workers they have a right to unionize under federal law. Starbucks will also remove from its files any reference to the employee's firing and will repay him for any loss of earnings. (Starbucks had already voluntarily reinstated the employee before he filed his charge with the NLRB). For more about the Starbucks Workers' Union (a branch of the IWW), click here.
This case is a reminder to employers that it is unlawful to discharge or take any other adverse action against an employee because of that employee's support for or activities on behalf of a labor union. Just because the employee supports a union does not require you to give him or her special treatment, nor does it make them immune for discipline unrelated to their union activities; however, if you terminate a union organizer, you proceed at your own (substantial) risk.
