Foiled Again: DR Horton Overturned (But Be Careful How You Phrase Your Arbitration Agreement)

Earlier this week, a three judge panel of the Fifth Circuit Court of Appeals issued its long-awaited decision in DR Horton Inc. v. NLRB. As expected by most labor lawyers, including us, the Fifth Circuit (with one judge dissenting) overruled the National Labor Relations Board’s dramatic extension of the law, that employers could not require employees to enter into agreements to individually arbitrate employment disputes, precluding collective or class action litigation. In DR Horton the NLRB had concluded that such agreements conflicted with employees’ rights to engage in concerted activity under the National Labor Relations Act (the “NLRA”) -- a conclusion that had since been rejected by almost every court to face the issue. The Fifth Circuit’s decision does contain a cautionary note for employers: an arbitration agreement may not appear to bar an employee from filing charges with the NLRB.

DR Horton

DR Horton is a home builder with operations throughout the United States. Beginning in 2006, DR Horton required all its employees to enter into a “Mutual Arbitration Agreement.” The agreement precluded civil litigation between the parties, requiring that all disputes be submitted to arbitration. Most critically, the agreement also barred any form of collective or class action proceeding. In 2008 the underlying plaintiff filed a putative class action lawsuit, contending that he had been misclassified as an exempt managerial employee in violation of the Fair Labor Standards Act. When DR Horton responded by insisting on individual arbitration pursuant to the agreement’s bar of collective actions, the plaintiff filed unfair labor practice charges with the Board.

The Board is charged with enforcing the NLRA, which protects “concerted activity” by employees. The Administrative Law Judge who initially heard the case concluded that DR Horton’s policy was unlawful, because a reasonable employee might read it as preventing an employee from filing charges of unfair labor practices with the Board. The Board went beyond the ALJ’s conclusion, and determined that the arbitration agreement in its entirety violated the NLRA. The Board reasoned that class or collective actions are themselves forms of concerted activity, and an attempt to preclude class litigation is thus a restrain on concerted activity which violates the NLRA.

Enter The FAA

 

However, while the Board is responsible for enforcing the NLRA, it is not charged with enforcing a different federal statute, the Federal Arbitration Act. The FAA declares federal policy favoring the arbitration of disputes, and generally directs that agreements to arbitrate be enforced, unless the agreement may be revoked for the same reasons other contracts may be revoked. As we have reported here, in recent years the US Supreme Court and other federal courts have interpreted the FAA broadly, including expressly upholding waivers of class action litigation in an arbitration agreement. Any doubt that agreements to individually arbitrate claims should be given full effect has been resolved by the US Supreme Court’s latest pronouncement on the subject, American Express v. Italian Colors Restaurant.  There, the Court upheld an arbitration agreement barring class claims, even though it was conceded that costs of litigating any individual claim would be greater than any potential recovery for the individual litigant.

 

Even while the Fifth Circuit considered the direct appeal of DR Horton, that case’s rationale has been considered by numerous courts. Plaintiffs attempting to avoid arbitration of various employment claims asserted the Board’s decision as a defense to the employer’s attempt to compel arbitration. In virtually every case, DR Horton’s rationale was rejected -- including every circuit court to consider the issue, including the Ninth Circuit in Richards v. Ernst & Young.

 

The Fifth Circuit’s decision rejecting the Board’s analysis was thus no surprise. After rejecting or side-stepping a number of challenges to the composition of the Board when it issued DR Horton (including belated complaints about the unconstitutionality of the recess appointed Board members who decided the case) the Fifth Circuit reached the central issue: the Board’s claim that the NLRA provided a basis to avoid the FAA.

 

The Fifth Circuit analyzed two different grounds offered by the Board as to why the NLRA trumps the pro-arbitration policy expressed by the FAA.   The first was the FAA’s “savings clause,” which permits an arbitration agreement to be avoided on the same basis as any other contract could be revoked.   The Fifth Circuit had no difficulty in disposing of this argument because the Board’s rationale, rather than being neutral, uniquely disadvantages arbitration.   The second argument -- that the NLRA expresses a congressional intent to override the FAA -- came up equally short. Simply stated, there is nothing in the text or history of the NLRA to suggest Congress meant to elevate the NLRA over the FAA. DR Horton thus cannot stand.

 

Caution: Access to the Board

 

The Fifth Circuit did uphold the Board in one regard: its determination that the arbitration agreement could be read as barring an employee’s ability to file unfair labor practice charges with the Board. In this regard, it is not just a question whether the arbitration expressly bars access to the Board; rather, it is an unfair labor practice if a reasonable employee could read the arbitration agreement to preclude the filing of charges.

 

Next Steps

 

The Board could, of course, seek further review by the full Fifth Circuit, or try to obtain review by the U.S. Supreme court. Observers are doubtful of the latter course, because of the strong pro-arbitration trend displayed by the current Court. Moreover, the Board may see no particular need to seek review by the Supreme Court, because of its doctrine of “non-acquiesence.” The Board regularly treats circuit court decisions with which it disagrees as non-binding in any other case. Employers have already had a taste of the Board’s approach, as several ALJ’s have expressed their opinion that they are bound by DR Horton, notwithstanding the strong contrary holding by the U.S. Supreme Court upholding bans on class proceedings in the Italian Colors case, which post-dated DR Horton.

 

Employers nonetheless now have more confidence that their mandatory arbitration agreements will ultimately withstand a challenge under the NLRA.   Such agreements should be carefully reviewed to be sure that they cannot be interpreted to bar access to the Board (or, as under Stoel Rives’ routine advice, other administrative agencies such as the EEOC).

Employers who wish to consider implementing a mandatory arbitration program, or revise their existing arbitration program, should contact their Stoel Rives Labor & Employment attorney.

Chasm Continues To Widen, For Now, Between NLRB and Federal Courts On Enforceability Of Class Action Waivers In Employment Agreements

Just last week, in the case GameStop Corp., a National Labor Relations Board (NLRB) administrative law judge applied recent Board precedent and ignored contrary cases from federal courts to find an employer’s arbitration agreement was unenforceable because it waived the right of employees to bring class or collective actions.  While the decision has yet to be approved by the NLRB itself (parties can appeal ALJ decisions to the NLRB), it illustrates the continuing tension in this area between the NLRB (which disfavors class action waivers in employee arbitration agreements) and the federal courts (which favor them). 

As we have reported, U.S. federal courts continue to hold that employees may enter into arbitration agreements in which they waive the right to file class or collective action claims.  The U.S. Supreme Court put its stamp of approval on such waivers in 2011 in the blockbuster case AT&T v. Concepcion, holding that the enforceability of arbitration agreements was governed by the Federal Arbitration Act (FAA), which preempted any state law purporting to regulate arbitration agreements, including arbitration agreements with class action waivers.  Building on a decades-long line of cases steadily increasing support for the concept of arbitration and similar alternative dispute resolution (“ADR”) methods for resolving litigation, Concepcion also held decisively that arbitration agreements could include waivers by the parties of the right to bring lawsuits as class actions.  The U.S. Supreme Court has re-affirmed Concepcion in subsequent decisions.

The NLRB Picks A Fight With the U.S. Supreme Court.  Who Do You Think Will Win?

Concepcion was a consumer class action case involving a class action waiver in a cell phone service agreement between a customer and cell phone provider.  But the Court’s reasoning left little doubt among employment law experts that the decision could apply to employment arbitration agreements as well. One employment expert did take exception to Concepcion, however: namely, the NLRB.  In early 2012, the NLRB issued its controversial opinion in the case D.R. Horton, which held that, despite Concepcion, a class action waiver in an employment agreement was unenforceable because it violated federal labor laws that protect employees’ right to engage in concerted or collective action to advocate for the improvement of working conditions.  While such “concerted action” typically has meant the right to form labor unions, in D.R. Horton, the NLRB held that filing class action discrimination or wage and hour lawsuits was a form of “concerted action” that could not be infringed upon or waived in an arbitration agreement. 

 

D.R. Horton put the NLRB directly at odds with the U.S. Supreme Court and put employers in a difficult spot.  On the one hand, the U.S. Supreme Court approved of the use of class action waivers in arbitration agreements, and many employers were eager to use them in employment agreements to help reduce the exposure to costly class action litigation, especially wage and hour class actions, which have been steadily on the rise over the past decade.  On the other hand, according to the NLRB, such waivers constitute a violation of federal labor law.

 

Right Answer: The U.S. Supreme Court.

 

Many employment law experts believe that D.R. Horton was based on shaky legal reasoning and would likely eventually be overturned by the federal courts.  In fact, lower federal trial courts have almost uniformly ignored D.R. Horton, and relying on Concepcion and related cases have continued to find that employment agreements with class action waivers can be fully enforceable under the FAA.  Employers got an additional boost over the past few weeks, when Ernst & Young’s employee class action arbitration waiver was upheld by both the Second and Ninth Circuits.  See Sutherland v. Ernst & Young LLP, 2013 U.S. App. LEXIS 16513 (2d Cir. N.Y. Aug. 9, 2013) Richards v. Ernst & Young, LLP, 2013 U.S. App. LEXIS 17488 (9th Cir. Cal. Aug. 21, 2013).  Those cases follow another similar decision from the Eighth Circuit in January of this year in Owen v. Bristol Care, Inc., 702 F.3d 1050 (8th Cir. Mo. Jan. 7, 2013) (affirming enforceability of class action waiver precluding FLSA collective action lawsuit and finding D.R. Horton “carries little persuasive authority.”)

So while the NLRB may be sticking to its guns for the moment in GameStop Corp., time may be on the side of employers hoping that Concepcion will carry the day.  It is unlikely that the NLRB's GameStop Corp. decision or D.R. Horton will continue to stand for long in light of the overwhelming and growing body of contrary law in the federal courts, which for most purposes trump the NLRB in the federal judicial pecking-order.  (The D.R. Horton decision itself is being reviewed by the Fifth Circuit Court of Appeals, with a decision expected soon.)  While employers should be aware of the continuing tension and flux over the enforceability of class action wavers in employee arbitration agreements, the developing weight of the law continues to shift in favor of enforceability.  Employers who wish to lower the risk of exposure to very costly and time-consuming class action litigation, particularly wage and hour collective or class actions, may wish to consider using arbitration agreements with appropriate class action waivers.

U.S. Supreme Court's Decisions on DOMA Extend FMLA Definition of "Spouse" To Same-Sex Partners In States Recognizing Gay Marriage

As almost everyone knows, the U.S. Supreme Court  issued two blockbuster decisions on gay marriage, U.S. v. Windsor, which struck down the Defense of Marriage Act's ("DOMA") definition of marriage for the purposes of federal law, and Hollingsworth v. Perry, which struck down California's "Proposition 8" prohibiting same-sex marriage in that state.  Those decisions will likely have significant effects on employers, such as with respect to employee benefits, health care and tax issues related to employees with same-sex partners.  For example,read here for a detailed discussion of how the Supreme Court's decisions may impact employee benefits.

Those decisions, particularly Windsor, also will have an immediate impact on employee coverage under the federal Family Medical Leave Act ("FMLA"), which requires covered employers to provide up to 12 weeks per year of unpaid leave to eligible employees for qualifying reasons (more leave may be required in certain situations, such as leave related to military duty).  One such qualifying reason entitles an employee to take leave to care for a family member, such as a family member with a serious health condition.  FMLA specifically defines family members to include a "spouse," which is further defined to mean a "husband or wife as defined or recognized under State law for purposes of marriage in the State where the employee resides, including common law marriage in States where it is recognized."  29 CFR 825.122.  Despite the fact that states have begun recognizing same-sex marriage in recent years, because the DOMA specifically defined marriage as only between a man and woman for the purposes of federal law, the DOMA basically overrode those states' laws for the purposes of FMLA coverage to spouses.

No longer.  Windsor invalidated the DOMA definition of "spouse" as an unconstitutional violation of the Fifth Amendment's equal protection clause.  Therefore, the FMLA definition of "spouse" is no longer limited by the DOMA, and employees in same sex marriages in states that recognize such marriages may now take FMLA-protected leave to care for their same-sex spouses.  Currently 13 states recognize same-sex marriage:  California, Connecticut, Delaware, Iowa, Massachusetts, New Hampshire, Maine, Maryland, Minnesota, New York, Rhode Island, Vermont, Washington, and also the District of Columbia.   Employers with employees residing in those states should evaluate their FMLA policies and practices immediately to ensure they are in compliance under the new post-Windsor interpretation of "spouse" under FMLA.

Some additional points to keep in mind:

  • The FMLA definition of "spouse" depends on the state law in the state in which the employee resides, not in which he or she was married.  FMLA does not cover leave to care for same-sex spouses for employees who don't reside in a jurisdiction that recognizes same-sex marriage (currently only those 14 jurisdictions listed above).
  • Many states have enacted their own family leave laws similar to FMLA that specifically cover leave for same-sex spouses regardless of whether same-sex marriage is legally recognized in the state, such as the Oregon Family Leave Act ("OFLA").  Employees in those states would already be eligible to take leave to care for same-sex spouses as a matter of state law even when not covered by FMLA after Windsor (Oregon does not yet recognize same-sex marriage). 
  • Note that in states with same-sex marriage and state family leave laws providing leave to care for same-sex spouses, employees with same-sex spouses may now actually have less available leave each year than before Windsor, strangely.  That is because, before Windsor any leave to care for a same-sex spouse would only count against the employee's bank of available leave under state law, but not under FMLA, which the employee was free to use for other reasons (such as caring for a child, related to the employee's own serious health condition, etc.)  Now the leave related to caring for a same-sex spouse will run concurrently under both FMLA and state law.
  • Employers can always provide family leave benefits more generous than what FMLA or related state laws like OFLA require.  So employers can of course provide leave to employees to care for same-sex spouses as a matter of company policy, even when not required by FMLA.
  • Employers may request supporting documentation from employees requesting leave to determine FMLA eligibility; this would likely include requesting marriage certificates or similar documents to confirm that a legal (same-sex) marriage exists.  However, unless this practice is applied equally to heterosexual couples, it may not be advisable as requesting such certifications for only employees in same-sex marriages could create the perception of sexual orientation discrimination.
  • Remember, an employee can usually always take FMLA leave to care for a child for whom the employee acts "in loco parentis" (in the place of a parent), even when the child is not a biological or adopted child.  This is true regardless of whether the employee is in a heterosexual or same-sex marriage.

 

Oregon Court of Appeals Upholds Wrongful Discharge Claim By Whistleblowing Prison Guard

Is the Oregon Court of Appeals back in the wrongful-discharge business? It’s a fair question to ask after the court’s decision last week in Lucas v. Lake County, --Or. App.-- (2012).  Reversing the trial court's motion to dismiss, the court held that a sheriff’s deputy who served as a correctional officer could sue for wrongful discharge in violation of public policy based on his allegation that he’d been fired for demanding that the sheriff implement a training program regarding sexual relations with inmates, and for concluding that another sheriff’s deputy had traded contraband for sex with an inmate.  

What Is An "Important" Public Duty?

Wrongful discharge has had an eventful history in the Oregon courts.  Broadly speaking, in a wrongful discharge claim an employee alleges that the employer terminated him for a reason that is inconsistent with an important public policy.  The key (and usually thorny) legal issue is identifying the public policy and weighing whether it is sufficiently important to protect an employee from being fired.  The Oregon courts have deemed an employee’s need to be absent from work to serve on a jury (Nees v. Hocks, 272 Or. 210 (1975)) and an employee’s internal protest that a fire department covered up evidence of a safety violation (Love v. Polk County Fire Dist., 209 Or. App. 474 (2006)) important enough to qualify.  On the other hand, a doctor’s disagreement with his medical group’s treatment recommendations (Eusterman v. Northwest Permanente P.C., 204 Or. App. 224 (2006)) and private security guards’ lawful arrest of drunken concertgoers (Babick v. Oregon Arena Corp., 333 Or. 401 (2002)) didn’t make the cut.

 

Courts and attorneys attempting to discern the difference among these cases were left scratching their heads about how to figure out whether a public policy was “important.”   Three years ago, the Oregon Supreme Court appeared to bring some clarity to the “important public policy” question in Lamson v. Crater Lake Motors, 346 Or. 628 (2009), where the court decided that a car salesman’s complaints about what he deemed to be unethical (although not unlawful) sales tactics did not go to an important policy, even though Oregon’s consumer protection laws clearly indicate a general policy against deceptive trade practices.  Going forward, the court said, an employee would have to do more than identify “some general public policy expressed in statute, constitution, or case law that would be ‘thwarted’ by the discharge at issue.”  Instead, “the sources of law that express the asserted ‘public policy’ must in some sense speak directly to those acts” that got the employee fired in the first place.

Lucas:  Keeping The Peace Is Sufficiently Important Public Duty For Prison Guards

Turning back to Lucas, is there any portion of Oregon law that “in some sense speak[s] directly” to a deputy’s recommendation that a sheriff’s office adopt a particular training policy, or his investigation of a subordinate's misconduct?  Not exactly.  Oregon law states that county sheriffs must be certified police officers, have the obligation to “arrest and commit to prison all persons who break the peace, or attempt to break it,” and that a deputy’s duties are derivative of the sheriff’s. ORS 206.010.  But that's as close as it comes to addressing the conduct that (allegedly) precipitated the deputy's termination. 

That was enough for the Court of Appeals, which said that because the deputy "alleged that he was terminated for seeking to enforce the criminal laws by preventing, detecting and investigating crime," he was entitled to go before a jury on his claim that his firing violated an important public duty.

Whither Wrongful Discharge?

In the long term, it's hard to know whether the Lucas decision signals that the Court of Appeals will be more receptive to wrongful-discharge cases that aren't grounded directly in a clear statutory command.  Certainly, the lurid facts of Lucas (not to mention the public safety context) made it easy for the Court to conclude that the termination violated public policy.  In addition, and whatever the difficulty of explaining just what is or isn’t an “important” public policy, it remains relatively simple for a plaintiff to state a similar type of claim under Oregon’s various whistleblower-protection statutes, primarily ORS 659A.199 (prohibiting employers from taking action against employees who report literally any unlawful activity), but also potentially ORS 659A.203 (for public employees), 659A.230 (protecting employees who complain of criminal conduct), and 659A.233 (employees who report violations of specific laws).  An employee who lacks a discrimination claim under Oregon’s anti-discrimination statutes can use the considerable ambiguity of the Lucas opinion (and of the whistleblower statutes) to pursue a wrongful discharge claim against his employer.  This area of the law bears watching in the future.

 

Where There Is At-Will, There Is A Way: NLRB Issues New Guidance On "At Will" Employment Policies

On Halloween, the National Labor Relations Board (“Board”) General Counsel’s Division of Advice handed out a rare treat to employers by issuing two Advice Memos (Mimi's Café, Case No. 28-CA-0844365 and Rocha Transportation, Case No. 32-CA-086799), deeming two particular (and common forms of) at-will employment policies contained in employee handbooks lawful under the National Labor Relations Act (the “Act").  

Earlier this year, an Administrative Law Judge frightened many employers by ruling a particular company’s “at-will” policy violated the Act because it theoretically could make employees believe that they could not form a union or otherwise advocate to change their at-will employment status. That challenged policy stated, “I further agree that the at-will employment relationship cannot be amended, modified or altered in any way.” The case, American Red Cross Arizona Blood Services Division, Case No. 28-CA-23443 (February 1, 2012), was settled before the NLRB could review it on appeal. 

The Division of Advice’s Halloween memoranda distinguished American Red Cross case from Mimi's Café and Rocha Transportation – noting that the at-will policy in American Red Cross used the personal pronoun “I” (“I further agree that the at-will employment relationship cannot be amended, modified or altered in any way”), which as written essentially constituted an impermissible waiver of any right of employees to try and change at-will status (i.e., to try to form a union).  The Division of Advice also noted that the policy in American Red Cross declared that the at-will employment relationship could never be modified under any circumstances whatsoever, which could be interpreted as chilling employees’ rights under the Act to engage in protected concerted activity such as forming a union.   Finally, the Division of Advice, perhaps dismissively, noted that American Red Cross had settled before getting to the Board level.

In contrast, in the two cases and policies analyzed by the Division of Advice’s Halloween memoranda, one employer’s handbook specifically provided for possible changes to an employee’s at-will employment status if made in writing and signed by the company president, and the other employer’s handbook merely said that no one in management had authority to make changes to the at-will policy. Specifically, the two at-will policies validated by the Division of Advice provided:

At-Will Employment

The relationship between you and Mimi’s Café is referred to as “employment at will.” This means that your employment can be terminated at any time for any reason, with or without cause, with or without notice, by you or the Company. No representative of the Company has authority to enter into any agreement contrary to the foregoing "employment at will" relationship. Nothing contained in this handbook creates an express or implied contract of employment.

Statement of At-Will Employment Status

Employment with Rocha Transportation is employment at-will. Employment at-will may be terminated with or without cause and with or without notice at any time by the employee or the Company. Nothing in this Handbook or in any document or statement shall limit the right to terminate employment at-will. No manager, supervisor, or employee of Rocha Transportation has any authority to enter into an agreement for employment for any specified period of time or to make an agreement for employment other than at-will. Only the president of the Company has the authority to make any such agreement and then only in writing.

The Rocha Transportation handbook also contained an "Acknowledgment of Receipt" that employees were required to sign, acknowledging that "nothing in the employee handbook creates or is intended to create a promise, contract, or representation of continued employment ...” The Division of Advice noted this was important in showing that the employer was trying to protect against contract claims, as opposed to trying to restrict employees’ rights under the Act.

The Division of Advice’s memoranda provide a welcome respite from an otherwise troubling (for employers) spate of Board decisions affecting both non-union and unionized employers on topics such as social media, off-duty access, and confidentiality policies. Although the Division of Advice’s memoranda are technically not binding, the Board’s Acting General Counsel has instructed all NLRB Regional Offices to consult with the Division of Advice before issuing any complaint challenging an employer’s at-will policy. And employers now have some helpful guidance from these memoranda concerning how to word at-will policies.

 

As the Election Nears, Employers Should be Cautious of Politics in the Workplace

From the Presidential debates to lawn signs, and TV ads to the Voters’ Pamphlet in your mailbox, there’s no denying that election season is in full swing. For employers, the home stretch to November 6 means not only around-the-clock coverage, but the potential for spirited debates—and resulting employee discord—in the workplace. Although with limited exception political activity or affiliation is not a protected status, and Oregon employers no longer have to worry about giving employees time off to vote due to mail-in ballots, the impending election still has significant potential to invoke myriad workplace issues ranging from discrimination and harassment to free speech and bullying. Here are some “dos and don’ts” to help guide employers over the next several weeks and keep polarizing political discourse from disrupting your workplace:

* Do set the tone. If you haven’t already, employers should clearly communicate their expectations to employees and foster a culture of mutual respect and understanding. Diversity—even with respect to politics—can be embraced as a positive. Employers lead the way by conveying their acceptance of varying ideologies, and encouraging employees to handle differences of opinion civilly and without letting it affect normal operations. Political conversations between employees often lead to discussion of sensitive (and protected) issues such as race, religion, immigration, and women’s rights. However, election season should not provide a license for employees to harass or bully one another by attacking contrasting political views, bragging about which ballot measures did or did not pass, or gloating over a candidate’s defeat. Employers can minimize risk by reminding employees that their policies prohibiting harassment, discrimination and retaliation apply to all political discussions, and investigating any complaints promptly. Moreover, some employers have in fact included political activity in their EEO or anti-harassment policies, so it may be prudent to dust off and review your handbook, because employees certainly will know what you have promised. Similarly, given that unions are frequently politically active, some union contracts prohibit politics-based discrimination.  

* Don’t allow bad behavior in the name of “free speech.” Contrary to popular belief, there is no blanket right of “free speech” in a private workplace. The First Amendment covers only state action, and private sector employers are therefore free to limit political discussions in the workplace. Be careful, however, that any such limitations don’t run afoul of laws such as the National Labor Relations Act (NLRA) (see next "do," below) or federal and state anti-discrimination laws.

Read on for more election "dos and don'ts" below!

 

* Do be mindful of the NLRA. The NLRA offers some protections for employees’ political speech, both on and off the job, and even if you do not have a union-based workforce. As the National Labor Relations Board (NLRB) states on its website, employees have the right to work together to “improve their pay and working conditions or fix job-related problems, even if they aren’t in a union.” (See https://www.nlrb.gov/concerted-activity). Employers should be particularly cautious to ensure that any restrictions on employee communications, political or otherwise, don’t impede on employees’ ability to act in concert with respect to work-related matters such that they would run afoul of Section 7 protections.

* Don’t forget about social media. Undoubtedly, social media has played a significant role in 2012—and it’s likely becoming an increasing presence in your employees’ day-to-day lives, too. Employers should remind employees of any policies regulating internet usage in the workplace, along with any policies specifically governing social media. Although such policies should encourage employees to be respectful, they should not be so broad-sweeping as to prohibit political discussions over social media, as this again has the risk of crossing over into Section 7 protections referenced above. The NLRB has stated that employers should not “caution employees against online discussions that could become heated or controversial.”

* Do be cautious of Company political endorsements. It’s common for employers to provide general election information to employees, such as informing them when ballots are mailed or simply encouraging them to vote. In recent years, however, many employers have taken it further and perhaps garnered unintended press for making political statements—most often during election season. Although there is no per se law prohibiting a private company from voicing its own political views to employees, employers who do so should also make clear that employees retain the sole right to vote as they choose. Employers should also be mindful of the resulting pitfalls. For example, would a gay or lesbian employee be more likely to bring a sexual orientation discrimination claim against an employer that had voiced its opposition to same-sex marriage? There’s no way to know, but most employers probably wouldn’t want to be the test case.    

* Don’t enforce policies on a selective basis. Many employers maintain no-solicitation or no-distribution policies, which generally prohibit employees from requesting support for or distributing materials about non-work events or causes. To be effective, however, these policies must be both strictly and evenly enforced. Don’t let a Democrat post political flyers, but not a Republican. And don’t let the CEO hand out buttons supporting the candidate of his or her choice, but prohibit employees from doing the same thing.

Do know if local or state law protects provides greater protections. As mentioned above, political activity is not a protected status for most employees working for private employers under federal law, and only a handful of states have promulgated laws making it unlawful for employers to discriminate or retaliate based on an employee’s political activity or affiliation. Oregon in Washington have not, but California is one of the few states that has. Some protections are derived on a more local level, such as the City of Seattle, which prohibits discrimination based on political ideology, affiliation or similar terms. Public employers need to be ever mindful of the circumstances when political speech crosses the threshold into free speech, thus precluding adverse action on that basis.

* Don’t hesitate to reach out if things get sticky. Election-related employment issues can be complex and difficult to navigate. If you run into problems in the pre- or post-election flurry, contact your employment attorney.  Although it may seem that all anyone cares about these days is the election, you’ve still got a business to run—and help is available.

Happy voting!

California Legislature Prohibits Requesting Employee Social Media Passwords

As we blogged about earlier this week, there have been a lot of recent cases before the National Labor Relations Board ("NLRB") testing the validity under federal labor laws of employer policies seeking to restrict employee use of social media.

The NLRB isn't the only place action is happening recently in this developing clash between employment law and social media.  Responding to an emerging controversy about whether employers can require disclosure of social media passwords during the hiring process, the California Legislature has passed Assembly Bill 1844, which Governor Jerry Brown signed in late September.  It takes effect on January 1, 2013.

This legislation prohibits an employer from requiring or requesting that an employee or job applicant disclose a user name or password for the purpose of accessing personal social media. AB 1844 also prohibits requiring or requesting that an employee or applicant access personal social media in the presence of the employer, or divulge any personal social media.  Finally, it also prohibits retaliation against an employee or applicant for not complying with an employer's request for such information.

The law does contain a few limited exceptions.  An employer may request that an employee divulge personal social media that the employer reasonably believes to be relevant to an investigation of allegations of employee misconduct or employee violation of law, provided that the social media is used solely for purposes of that investigation.  Additionally, the law does not preclude an employer from requiring or requesting that an employee disclose a user name, password or other method for the purpose of accessing an employer-issued electronic device.

With the passage of this law, California becomes the third state (along with Maryland and Illinois) to legislatively limit employer access to social media accounts. Companies with employees in California should assess their hiring and employment practices to make sure they are in compliance with these new restrictions.

NLRB Finds Employee Arbitration Agreement Waiving Class Claims Violates Federal Labor Law

In DR Horton, a decision issued on January 3 and applicable to most private sector employers, whether unionized or not, the National Labor Relations Board (NLRB) held that federal labor law prevents employers from requiring their employees, as a condition of employment, to agree to broad waivers that would deny their right to pursue employment-related class actions both in court and in arbitration, leaving them no forum for pursuing class or collective claims.  As a result, an important tool for managing the risk of employment-related litigation has been taken away (for now). 

The facts of the case are straightforward.  DR Horton, like many employers, required its employees to sign an arbitration agreement as a condition of employment.  The agreement required employees to arbitrate all claims arising out of their employment, and precluded arbitrators from issuing class or group relief.  As a result, employees were prevented from bringing class or collective actions in any forum.  Relying on this agreement, DR Horton refused to arbitrate a class action alleging that it had misclassified certain employees as exempt from the protections of the Fair Labor Standards Act (FLSA).

 

Not so fast, according to the NLRB.  Tracing federal labor law back to its origins, the NLRB found that the filing of a class action “to redress workplace wrongs or improve working conditions” is activity at “the core” of what Congress intended to protect when it enacted the National Labor Relations Act in 1935.  This intent, the NLRB reasoned, is reflected in Section 7 of the Act, which gives employees the right to engage in “concerted activities” for the purposes of “mutual aid or protection.”  Relying on Section 7, the NLRB found that Employers cannot compel their employees, as a condition of employment, to entirely waive the right to bring class or collective actions.

 

The NLRB’s ruling in DR Horton clashes with the U.S. Supreme Court’s recent decision in AT&T Mobility v. Concepcion, which held that arbitration clauses that waive the right to bring class claims entirely (in the commercial contract context) may be lawful and enforceable.  But unless and until the courts intervene to resolve this tension, requiring your employees to completely waive the right to bring employment-related class or collective actions - a common feature of arbitration agreements - is probably no longer permissible under federal labor law.

 

If You're Interested In Learning More, Sign Up For Our Webinar

Stoel Rives is hosting a webinar on January 11, 2012, to address employee arbitration agreements generally and the DR Horton decision in particular.  Click here if you're interested in learning more or attending.

Thanks For Nominating Stoel Rives World of Employment As A Top 25 L&E Law Blog!

Based on feedback from you, our readers, LexisNexis has nominated the Stoel Rives World of Employment as a "Top 25" law blog in the Labor and Employment category!  Thanks to those of you who nominated us to this elite group.  Readers now have until September 12 to vote for their favorite blog.  After voting is completed LexisNexis will announce which of the nominated blogs are selected to the final top 25.

Please Cast Your Vote For Us

At this point we'd like to engage in a bit of shameless self-promotion, and urge you to cast your vote for us before September 12.  To do that, simply click here to vote, scroll to the very bottom of the page to the Add a Comment section, and add a comment.  In the comment field, type something like "I vote for the Stoel Rives World of Employment blog."  You can also view information about the competition and see the other nominated blogs on this page too.  If you haven't already used the LexisNexis Communities feature, you may need to create an account to be able to vote.

Again, thanks for the nomination and support!  (Here ends the shameless self-promotion...now we'll get back to blogging.)

- Your Stoel Rives World of Employment Bloggers

 

 

 

 

 

Oregon Court Of Appeals Holds Non-Disabled Employees Are Protected When Requesting Accommodations

On Thursday, in Herbert v. Altimeter, the Oregon Court of Appeals held that an employee does not need to actually be disabled in order to be protected from retaliation for requesting an accommodation under Oregon’s disability anti-discrimination law.  The case serves as a useful reminder that anti-retaliation protections, like those in the Oregon disability law, can be very broadly applied and protect many types of employee requests or complaints. Employers should be careful when disciplining or terminating any employee who has recently made some kind of arguably protected request or complaint.

Sherrie Herbert was terminated from her truck-driving job with Altimeter shortly after she became ill, allegedly from exhaust fumes in the cab of her truck, and she reported those problems to her boss. She sued under various retaliation theories, including that she was terminated in retaliation for her having requested an accommodation for a disability (i.e., requesting to be reassigned to a different truck). The trial court granted a directed verdict for Altimeter at the close of Herbert’s case at trial and dismissed all claims.

The Court of Appeals reversed.  Altimeter argued that it couldn’t have retaliated against plaintiff for requesting an accommodation as a matter of law, because she was not disabled and therefore not protected under the Oregon disability law's anti-retaliation provisions.  The court rejected that argument, noting that while the law requires Oregon employers to provide a reasonable accommodation to a “person with a disability,” the anti-retaliation provision, ORS 659A.109, protects any “worker” who requests an accommodation.  So, the court reasoned, by its plain terms the statute protects a broader class of employees (all of them) who make protected requests for accommodations, even though those employees may not be entitled to an actual accommodation. 

The opinion also contained an illustrative reminder about the importance of well-drafted written responses filed with the Equal Employment Opportunity Commission (“EEOC”), the Oregon Bureau of Labor and Industries (“BOLI”), and similar agencies. Those written position statements are admissible later; if they’re not carefully drafted they could come back to bite the complainant. In Herbert, Altimeter’s BOLI position statement included several damaging admissions, the worst of which essentially stated that she was terminated because she insisted she be reassigned to another truck, i.e., requested an accommodation.  Despite a general lack of other evidence of retaliation presented by Herbert at trial, the Court held that Altimeter's admission in the BOLI statement alone was enough to allow that claim to go to a jury. 

Oops!  While there are no easy, hard-and-fast rules about how to draft effective BOLI or EEOC position statements, generally you want to say as little as possible while still making your case, and above all, you don't want to provide the only evidence a plaintiff will need to take his or her case all the way to a jury!!  Those kinds of careless statements early on can make litigating employment discrimination lawsuits very expensive for employers, because they become much harder to get dismissed before trial.


Oregon Legislature Bans Mandatory Meetings

A new Oregon bill will prohibit employers from requiring employees to attend mandatory or "captive audience" meetings on, among other topics, labor unions.  Governor Ted Kulongoski is expected to sign the bill, which would them become law effective January 1, 2010.  Click here to read SB 519

SB 519 prohibits an employer from taking action against an employee who refuses to participate in communications concerning the employer’s opinions on religious or political matters. Religious or political matters is defined broadly and includes communications to employees about unionization.  An employee who suffers economic loss (through termination or suspension) as a result of the bill can sue his or her employer and recover treble damages.  The bill also allows employees to obtain an injunction prohibiting additional "captive audience" meetings. 

This law might not be long-lived:  the U.S. Supreme Court found a similar California law to be preempted by federal labor law.  Click here to read that opinion in Chamber of Commerce v. Brown.  Even if a court finds Oregon's statute to be similarly preempted (and we believe a court will), the law could still apply to employers that are not covered by federal labor law - namely, Oregon public and agricultural employers.  Also, the word from Salem is that the legislature will still revise the law to provide additional protections for religious employers (such as churches and some hospitals) who hold religious meetings, so keep an eye out for those changes in the next week or so. 

President Bush Signs ADA Amendments Act

As expected, President Bush yesterday signed the ADA Amendments Act ("ADAAA") into law, significantly expanding the scope of the Americans with Disabilities Act.  The final version of the law can be downloaded here.  The Stoel Rives World of Employment has been actively covering the law as it wound its way through Congress, and you can follow our reporting here

The ADAAA goes into effect January 1, 2009.  To help you get ready, Stoel Rives is offering free seminars on the ADAAA in its Portland, Boise and Seattle offices on December 2, 2008.  For more information and to register, click one of these links: 

ADA Amendments Act Passes House - Next Stop White House

The ADA Amendments Act ("ADAAA") was passed by the U.S. House of Representatives earlier today.  For more information, read the House's Press Release.  As reported previously by the Stoel Rives World of Employment, the same version of the bill was recently approved by the U.S. Senate. 

The next stop for the ADAAA is the White House.  President Bush previously indicated he has some misgivings about the ADAAA, but given the broad bipartisan support that carried the bill through Congress, he is expected to sign it into law.  (Keep in mind, it was George H.W. Bush that signed the original ADA.) 

Assuming it becomes law, the ADAAA will greatly broaden the scope of the ADA.  Some highlights of the ADAAA:

  • Reverses several Supreme Court decisions that have seemingly narrowed the coverage of the ADA, restoring what the drafters perceive to be the original Congressional intent
  • Broadens the definition of disability, including what it means to be “substantially limited in a major life activity
  • Clarifies that accommodations are not be required if an individual is merely "regarded as” having a disability
  • Prohibits the consideration of mitigating measures such as medication, prosthetics, and assistive technology, in determining whether an individual has a disability
  • Provides coverage to people who experience discrimination based on a perception of impairment regardless of whether the individual experiences disability

The Stoel Rives World of Employment will let you know as soon as we receive word on what the White House intends to do.  Stay tuned!

ADAAA Update: Senate Approves ADA Amendments Act

The U.S. Senate yesterday approved the ADA Amendments Act (ADAAA) by unanimous consent, making enactment of the ADAAA likely.  As the Stoel Rives World of Employment previously reported, the ADAAA would overturn several U.S. Supreme Court decisions that many critics claim have too narrowly interpreted the Americans with Disabilities Act's coverage.  To read the Senate version of the ADAAA, click here

The ADAAA passed the House of Representatives in June by a 402-17 vote.  There are minor differences between the House and Senate versions of the bill, and the House is expected to adopt the Senate version on September 17.  After that, it's on to President Bush to sign the bill, which he is expected to do.  Keep watching the Stoel Rives World of Employment for further updates.