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 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.
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.
11th Circuit Disagrees With NLRB And Finds Nurses Are "Supervisors" In Lakeland Health Care Decision
Several weeks ago the U.S. Court of Appeals for the 11th Circuit weighed in on the ongoing debate in labor law over the definition of who is a “supervisor,” and therefore not eligible to join a union, under the federal National Labor Relations Act (“NLRA”). The opinion, Lakeland Health Care Associates , is but the latest installment in an area of labor law that has been evolving over at least the past decade. While this line of cases, including Lakeland Health Care, are specific to the “supervisor” status of nurses working in the residential care industry, the relevant legal tests are the same for all industries. Employers who may wish to oppose unionization efforts among employees it believes are supervisors will therefore want to continue to pay close attention to these cases to see what could be done to maximize the chance that the National Labor Relations Board (“NLRB” or “Board”) would also find those employees are supervisors.
LPNs Supervise Other Employees, But Are They “Supervisors” Under The NLRA?
As with many things in labor law, determining who is a “supervisor” is rarely straightforward: simply giving someone the title of “supervisor” is never enough. In many cases employees may have only partial supervisory authority—the issue in cases like Lakeland Health Care is whether the employees had enough supervisory authority to be “supervisors” under the NLRA.
Lakeland Health Care operates residential care facilities (until recently known commonly as “nursing homes”). Consistent with industry-wide practice, Lakeland Health Care staffs its facility primarily with Certified Nursing Assistants (“CNAs”), who perform most of the day-to-day work providing physical care to residents—such as feeding, dressing, bathing, turning, etc.—and charge nurses, usually Licensed Practical Nurses (“LPNs”) or sometimes Registered Nurses (“RNs”), who provide basic medical care to residents such as administering medication, inserting or monitoring intravenous lines, and performing blood draws. Also consistent with industry practice, the RNs and LPNs have general day-to-day supervision over the CNAs with whom they work each shift, but do not have independent hire/fire authority.
Section 2(11) of the NLRA and related case law has a very detailed and complex definition of who is a “supervisor.” To summarize, a “supervisor” is any employee who has the authority to hire, fire, discipline, or assign work to other employees, or to effectively recommend any of those actions, or who “responsibly direct[s]” other employees in their day-to-day work. The supervisor must also use “independent judgment” in performing those supervisory functions and not merely report employee conduct to higher level managers to take action. Those who meet the "supervisors" tests are not "employees" eligible to organize into unions under the NLRA.
After reviewing the testimony of company witnesses, and employee handbooks and written job descriptions, the 11th Circuit concluded, in contrast to the NLRB, that the Lakeland Health Care LPNs were supervisors under that NLRA definition. Specifically, the Court found that even though LPNs could not hire or fire CNAs, they could independently issue them written and verbal coaching (i.e., discipline) and assign work. The Court also found that LPNs “responsibly directed” CNAs in their day-to-day work in that the LPN ultimately could be held responsible, and disciplined, if the CNAs failed to provide adequate care to residents. The Court found that the LPNs exercised sufficient “independent judgment” in performing all of these functions with respect to CNAs.
A Brief Recent History Of “Supervisor” Status
The supervisory status of charge nurses in the residential care industry has been the subject of much labor litigation over the past 10 years (perhaps because that industry has specifically been targeted for organization drives by many major national and local unions). While the reasoning in Lakeland Health Care summarized above may sound straight-forward, other cases with nearly identical facts have reached very differently results. These differing outcomes make it difficult for employers to know when employees are supervisors, and appear to be largely influenced by two factors.
First, the NLRB’s own interpretation of the law can change dramatically over time depending on whether a pro-union Democrat or pro-business Republican is President. For example, in 2006 the Bush-era Board issued employer-friendly decisions that broadly applied the “supervisor” exception in its Oakwood Health Care “trilogy” (also involving the status of charge nurses in residential care facilities). In so doing, Oakwood Health Care departed from Clinton-era NLRB decisions that had made it much more difficult to show that employees like LPNs are “supervisors.” In recent years, the Obama Board has distinguished Oakwood Health Care to turn back the clock to the broader Clinton-era interpretations of “supervisor.” Perhaps most difficult, the NLRB rarely outright reverses earlier opinions, but instead tries to find subtle factual nuances to harmonize its decisions, even though the different outcomes sometimes seem to be based on very similar factual patterns.
Second, there is also tension between the (generally pro-union) NLRB and the federal circuit courts, which have jurisdiction to reverse those decisions and may tend to be more pro-employer. For example, the 11th Circuit in Lakeland Health Care specifically held that the employer must only show that the LPNs have the authority to perform the supervisory functions (through written job descriptions, handbooks, and the testimony of managers), not that they demonstrate a practice of actually having used that authority in specific cases. That holding may be a departure from recent cases where the Board found under virtually identical facts that charge nurses were not supervisors, because, even though written policies and job descriptions showed they had supervisory authority, they did not actually discipline CNAs, or did not do so often enough.
Back To The Future: More Conflicting Decisions To Come?
It will be interesting to see how the Obama Board will respond to the 11th Circuit’s opinion in Lakeland Health Care. As we have blogged about repeatedly, the current Obama Board has been very active, tends to be pro-union, and is not afraid of taking positions potentially at odds with federal courts, even the U.S. Supreme Court. And the NLRB could only be emboldened now that President Obama has won re-election. It is therefore difficult to see how this tug-of-war will play out. Maybe the only thing that is certain is that more fireworks are likely over the next few months and years in this area.
In the meantime, Lakeland Health Care may offer some help to employers who wish to oppose unionization efforts involving potentially supervisory employees. While circuit court opinions are not technically binding on the NLRB or its regional offices, they can be persuasive authority. Also, while this line of cases is particularly relevant for employers like Lakeland in residential care, the “supervisor” tests are the same everywhere. Employers in all industries may wish to pay particular attention to the weight the 11th Circuit gave to the handbooks and written job descriptions, which helped show that the LPNs in that case had the necessary supervisory authority, and revise their own written job descriptions if needed. If you find yourself in an NLRB hearing involving the supervisory status of employees, the quality of your written job descriptions and handbooks could help make the difference in proving your case.
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.
Continuing its campaign to educate employees about their rights, the National Labor Relations Board (NLRB) yesterday launched a public webpage that explains the rights of employees (union or non-union) to engage in concerted activity under the National Labor Relations Act (NLRA). The launch of this webpage follows shortly on the heels of a ruling by a South Carolina federal court that struck down the NLRB's requirement that employers post a notice of employee rights under the NLRA.
In addition to providing a description of protected concerted activity, the page recites recent Board cases involving such activity and identifies them by geographic location. These cases include examples involving a construction crew fired after refusing to work in the rain near exposed electrical wires, a customer service representative who lost her job after discussing her wages with a coworker, an engineer at a vegetable packing plant fired after reporting safety concerns affecting other employees, a paramedic fired after posting work-related grievances on Facebook, and poultry workers fired after discussing their grievances with a newspaper reporter. In each instance, the Board has indicated that the involved conduct is protected by the NLRA and that firing employees for engaging in such conduct violates the NLRA.
As was prudent in the face of the now-defunct NLRB posting requirement, employers should review their employment policies to ensure compliance with the NLRA. Employers also should train managers regarding the requirements of the NLRA specifically relating to protected concerted activity. Finally, employers should consider implementing employee education programs and reminding employees of the internal complaint procedures available to them.
The NLRB's new webpage can be found at www.nlrb.gov/concerted-activity.
In response to two federal court cases we previously blogged about here and here, the NLRB has indefinitely postponed implementation of its notice posting rule pending appeals in both of those cases. The bottom line is that no employer needs to post the notice for the time being.
The U.S. Court of Appeals for the D.C. Circuit will hear the NLRB’s appeal of an emergency injunction that court issued against the rule, but the hearing will not occur before September 2012. In the trial court ruling in that case, the judge found the NLRB's posting rule valid, but its enforcement provisions invalid. The NLRB is also appealing the South Carolina federal trial court decision we previously blogged about, in which a judge deemed the NLRB's entire posting rule invalid. No schedule has yet been set for the South Carolina appeal.
See the NLRB’s statement about this issue here.
The NLRB’s new posting rule, which would apply to virtually all private sector employers, was scheduled to go in effect on April 30, 2012. Yesterday, we blogged about a South Carolina federal trial court decision striking down the posting rule. More good news for employers arrived today, as the United States Court of Appeals for the District of Columbia issued an emergency injunction preserving the “status quo” and delaying implementation of the NLRB’s posting rule until that Court of Appeals determines its validity. The D.C. trial court had previously determined the posting rule was valid (contrary to the South Carolina case) but that its remedies were invalid. Oral argument in the D.C. appellate case is currently estimated to occur in September 2012. A copy of the D.C. Court of Appeals injunction decision is here.
We now have two courts that have stymied the NLRB posting rule. It is still unknown whether the NLRB will appeal the South Carolina and D.C. Court of Appeals decisions. But for now, absent an emergency appeal, it appears that the NLRB’s posting rule will, at a minimum, be delayed for several months. We will keep you “posted” as developments occur.
As previously blogged here, a federal court located in the District of Columbia upheld the National Labor Relations Board's (“NLRB”) rule requiring nearly all private sector employers, whether unionized or not, to post a notice to their employees about certain employee rights under the National Labor Relations Act. While upholding the rule, that federal court did at least strike down the rule’s main enforcement provisions. A copy of that federal court decision is here. As we blogged then, another legal challenge to the NLRB’s rule was also pending in a South Carolina federal court. That decision is now here, and it is a good one for employers.
The U.S. Chamber of Commerce and the South Carolina Chamber of Commerce challenged the NLRB’s rule. On April 13, 2012 (perhaps Friday the 13th from the NLRB’s perspective), the federal judge in that South Carolina case ruled that the NLRB’s entire posting rule is invalid, finding the NLRB exceeded its authority when it required employers to post notices explaining workers’ rights to form a union. In his ruling, the South Carolina federal judge said the NLRB lacked the legal authority to issue the notice and thus the rule was not lawful. “Based on the statutory scheme, legislative history, history of evolving congressional regulation in the area, and a consideration of other federal labor statutes, the court finds that Congress did not intend to impose a notice-posting obligation on employers, nor did it explicitly or implicitly delegate authority to the Board to regulate employers in this manner,” the court ruled.
Many labor law professionals feel that the NLRB has become overly aggressive in supporting and expanding union rights during the Obama administration. This sentiment is especially strong in a conservative state like South Carolina, which also was at the center of a now-settled dispute between the NLRB and Boeing over Boeing’s decision to move production of its 787 Dreamliner airplane from Washington State to South Carolina. The South Carolina federal judge appears to agree that the NLRB is becoming overly aggressive, stating, “The Board also went seventy-five years without promulgating a notice-posting rule, but it has now decided to flex its newly-discovered rulemaking muscles.” A copy of the South Carolina decision is here. Its authority is technically legally limited to that particular court, but because of its import we expect it to have an effect nationally as the NLRB seeks to regroup and rethink what it will do. If the NLRB does not appeal the South Carolina court’s decision, the ruling will stand and, from a practical perspective the posting requirement will be invalidated nationally. But most pundits anticipate that the NLRB will file an appeal over the South Carolina decision.
The bottom line is that we now have two conflicting federal court rulings on the issue, and await the NLRB’s decision on whether it will appeal the South Carolina ruling, and/or delay implementation of its previously stated April 30, 2012 posting deadline. Stay tuned.
Update: A federal trial court in the District of Columbia has upheld the notice posting requirement in the National Labor Relations Board's (“NLRB”) recently issued final rule requiring nearly all private sector employers, whether unionized or not, to post a notice to their employees about certain employee rights under the National Labor Relations Act. To view the Court's decision, click here. The court also held, however, that the rule’s main enforcement provisions, including making an employer’s failure to post a per se unfair labor practice, are invalid. Unless this decision is overturned or another court finds the rule to be invalid, the notice posting requirement will still take effect April 30, 2012. An appeal is likely in the District of Columbia case, and at least one other court challenge is pending in South Carolina.
For additional information regarding the NLRB's rule and posting requirement, including links to the rule and the poster employers must post, see our prior discussion on this topic by following this link.
In order to allow more time for legal challenges to its notice-posting rule to be resolved, the National Labor Relations Board has again postponed the rule's effective date, this time to April 30, 2012. Stay tuned.
For additional information regarding the NLRB's new rule and posting requirement, including links to the new rule and the poster employers must post, see our prior post on this topic by following this link.
Your bulletin board full of required workplace postings just got more crowded. The National Labor Relations Board (“NLRB”) has issued a final rule that will require nearly all private sector employers, whether unionized or not, to post a notice to their employees about certain employee rights under the National Labor Relations Act (“NLRA”). The notice must be posted by no later than November 14, 2011 (now postponed until January 31, 2012, see update below). The new rule is one of many new developments arising from the current NLRB’s implementation of the Obama administration’s labor policy.
This new notice is a form designed by the NLRB. Among other things, it contains:
· A summary of employee rights under the NLRA, including the right to discuss wages and working conditions with co-workers or a union, form or join a union, take collective action to improve working conditions, and engage in other protected activities.
· Examples of violations of those rights, and an affirmation that unlawful conduct will not be permitted.
· Information about the NLRB, the NLRB’s contact information, and details on how to file an unfair labor practice charge with the NLRB.
· A statement about the employer's obligation to bargain in good faith if a union has been selected by employees.
This new rule applies to almost all employers except public sector employers, very small employers below the NLRB’s jurisdictional standard for impacting interstate commerce, and other limited classes of employers outside of the NLRA’s jurisdiction. The NLRB may find that an employer’s failure to post the notice constitutes an unfair labor practice. The remedy for a violation may not be severe because the NLRB cannot impose fines – but much worse, a violation can be evidence of unlawful motive and prevent the running of the statute of limitations.
The full text of the actual required notice is available here. Private sector employers will be required to post this notice in conspicuous places, including where they customarily post other workplace notices. In addition, employers who customarily post personnel policies and rules on an internet or intranet site must include this new notice there or provide a link to the NLRB’s website section containing the notice. If an employer has employees working at another employer’s site, it will also need to determine whether it can post notices at that site if the other employer does not already have the notice posted. If 20 percent or more of an employer’s employees are not proficient in English and speak the same foreign language, the notice must also be posted in that language. The NLRB will provide translations in such circumstances. Copies of the required 11x17 posters will be available at no cost from the NLRB upon request, and will also be downloadable from the NLRB’s website, www.nlrb.gov. A federal contractor will be regarded as complying with the NLRB’s new posting requirement if it already posts the notice required of federal contractors by the U.S. Department of Labor. See our earlier discussion of those posting requirements here.
The NLRB fact sheet with further information about the rule is available here. There are likely to be legal challenges to the NLRB’s new notice posting rule, and at least one bill has already been introduced in Congress seeking to invalidate it. For now, employers will need to be prepared to comply with the new posting requirement. While already unionized employers will likely see little impact from the new rule other than the actual posting requirement itself, non-unionized employers may be faced with employees raising questions about their rights under the NLRA. Because such questions will invariably be directed toward their immediate supervisors, it is important for non-unionized employers to make sure that supervisors are properly trained regarding how to maintain a union-free environment without violating the NLRA. Non-unionized employers might also be tempted to post their own notice alongside the new NLRB poster, advising employees why a union is not needed. As with all such efforts, missteps can lead to challenges before the NLRB, so employers should consult with their Stoel Rives labor attorney.
UPDATE: On September 14, 2011, the NLRB made available the poster that employers must post. The link to that poster is here. The NLRB recently postponed the implementation date for its new notice-posting rule by more than two months in order to allow for enhanced education and outreach to employers. See here. The new effective date of the rule, and the date by which the new notice must be posted, is January 31, 2012.
This morning the United States Supreme Court issued a highly-anticipated decision in New Process Steel v. National Labor Relations Board, ruling 5-4 to effectively invalidate almost 600 decisions made by the NLRB during the time it only had two members.
Normally, the NLRB is comprised of five members, but typically delegates its powers to decide most cases to panels of three members, in which a two-member majority can (and often does) carry the day. However, from late 2007 through March 2010, the Board only had two members. Those two members argued that they had the authority to decide cases as long as they agreed on the decision; after all, had they been the majority on a three-person panel, they would have made the same decisions.
The Supreme Court disagreed. It held that the National Labor Relations Act (NLRA), the law that gives the NLRB its powers, only allows the Board to delegate the authority to decide cases to a panel of at least three members. Accordingly, no two-member panel could have decision-making authority under the NLRA.
What does this mean for employers? If you had one of the 600 cases decided by the two-member Board, it may mean that your case will have to be reconsidered by a new three-member panel. We suspect, however, that the vast majority of those cases will be decided the same way. For the rest of us, this decision will have little impact. The two-member Board did not take up any controversial cases and did not issue any decisions that would overturn existing precedent or make "new law."
More Federally Mandated Wallpaper: Federal contractors must post a notice of employee rights under the National Labor Relations Act
Once again, employers are being given an old line: we are from the federal government and we’re here to help you . . . with your office decorating. Shortly after his inauguration, President Obama issued Executive Order 13496 (the “Order”). The Order directed that all federal contractors post a notice to their employees advising the employees of their rights under the federal labor laws. The Order required the United States Department of Labor to prepare implementing regulations, including the text of the posting. After a year’s work, the Department has completed its work, and the required poster is now available. Federal contractors and all subcontractors must begin posting the required notice by June 19, 2010.
Posting requirements are not new for federal contractors. In the 1980s, the first President Bush required contractors to post a notice advising employees of their rights to refrain from supporting unions’ political activities (the so-called “Beck” notices named after the U.S. Supreme Court case addressing the issue). President Clinton issued an executive order rescinding the Beck poster requirement; the second President Bush then reinstated the posting obligation. No surprise – in the Order President Obama again rescinds the obligation to post the Beck notice.
The new poster is available from the Department of Labor’s website here. The poster generally advises employees about their rights to engage in protected concerted activity under the National Labor Relations Act, as well as their right to refrain from engaging in that activity. The poster also describes the industries and employees that are not subject to the NLRA. Generally, the poster does a fair job of describing employee rights, and unlawful actions by both employers and unions. Of course, a single 11-inch by 17-inch poster cannot describe all of the complexities that have developed in the 75 years of NLRA enforcement. For example, health care employers should note that the poster does not even attempt to address the special rules applicable to various union activities in patient care areas.
The obligation to post the notice applies to all federal contracts that are above the “simplified acquisition threshold” applicable to federal contracts. Generally, the simplified acquisition rules are applicable to contracts with a total value less than $100,000. These provisions of the federal acquisition regulations are sometimes complex, and employers with questions as to their coverage should consult their attorney.
Federal contractors are required to include a contract provision requiring posting of the notice in all subcontracts, with a value of more than $10,000. Thankfully, in the final regulations the Department backed off its original proposal that subcontracts had to include the full text of the poster; now contractors can satisfy their obligations in this regard by incorporating the regulation by reference. Contractors should note that among the requirements of the contract clause is the obligation for subcontractors to include the provision in their contracts with their subcontractors; the Department’s regulations thus expressly require all businesses performing work on the federal contract to post the notice, regardless of their subcontract “tier” or whether the subcontract might itself be under the simplified acquisition threshold.
The poster must be physically displayed in the normal “conspicuous places” other employment related posters are located. The notice must be posted at all locations on which work on the federal contract is performed or is being allocated to the federal contract. When a substantial portion of the workforce does not speak English, the notice must be posted in the language spoken by those employees. When the employer routinely provides employees notices by electronic means, the employer must do so in this instance as well, typically by providing a link to the Department of Labor website.
What is a federal contractor or subcontractor to do?
For federal contractors or subcontractors that are already ubiquitously unionized, the poster may not cause any substantial headaches. Indeed, reminding unionized employees that there are certain things their union cannot do, as the poster plainly does, may not be a bad thing. For federal contractors or subcontractors that are not currently unionized, however, substantial issues are raised – especially if the employer wants to remain union-free. The new poster may raise employees’ awareness of their rights under the NLRA. It should also raise union-free employers’ attention to a systematic union avoidance program:
- Nothing in the Executive Order or the Department’s regulations prevents an employer from posting its own notice, right alongside the newly required poster.
- Employers should remind employees that it is official company policy that the employer does not believe a union is necessary or appropriate.
- The employer should remind employees of the advantages they enjoy by being union-free.
- If the company has not reviewed its nonsolicitation and nondistribution policy, it should be reviewed promptly to make sure that all of its provisions are in compliance with the law. If the company does not have a nonsolicitation and nondistribution policy – implement one!
- Make sure that your nonsolicitation and nondistribution policy, and any other policies or practices that might impact employees or others engaging in union organizing, are applied in a fair and nondiscriminatory fashion.
Of course, before undertaking any these actions, federal contractors or subcontractors should consult with their labor law attorney.
Earlier this month, the United States Supreme Court declined to review a ruling from the Court of Appeals for the District of Columbia Circuit holding that unauthorized aliens are "employees" under the National Labor Relations Act (NLRA) and therefore entitled to cast votes in a union election.
In Agri Processor Co. v. NLRB, the employees elected the United Food and Commercial Workers Union Local 342 as their bargaining agent in 2005 election; however, the employer refused to bargain with the union on the basis that 17 of the 21 employees who cast ballots were not legally authorized to work in the United States, and therefore not "employees" under the NLRA.
In a 2-1 decision that was affirmed by the D.C. Circuit, the National Labor Relations Board held that the certification of Local 342 was valid because the voters were employees under the NLRA even if they were hired in violation of the Immigration Reform and Control Act. That decision will stand now that the Supreme Court has passed on its opportunity to review the case. With the passage of the Employee Free Choice Act appearing all but certain, authorization cards signed by unauthorized alien employees will likely be held valid as well.
Earlier this week, the Seventh Circuit Court of Appeals ruled that an employer does not violate the National Labor Relations Act by refusing to reinstate economic strikers because it had hired permanent replacements, even though those "permanent" workers are at-will employees. The decision in United Steelworkers v. NLRB upheld an earlier National Labor Relations Board ruling, also in favor of the employer.
The court upheld the NLRB's ruling board permissibly held that employer and the replacement employees had a "mutual understanding" that, despite an at-will clause in the replacements' employment applications, their employment was, for purposes of replacing the strikers, "permanent." The Court agreed with the NLRB that an at-will employment clause in the striker replacements' job applications did not make them "temporary" replacements who normally must be terminated in favor of returning strikers.
This ruling gives employers greater flexibility in hiring permanent replacement workers in the event of a strike. Nevertheless, whether an employer may "permanently" replace strikers in a particular strike is a very complex legal issue. In any strike situation, employers need to be very careful about whether to hire "permanent" or "temporary" replacement workers, and to only permanently replace strikers if they are legally entitled to do so. And in any event, employers may not ever replace a striking Tina Fey, because she's too funny.