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.
NLRB's New "Vote Now, Litigate Later" Union Election Rules To Become Effective April 2012
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The NLRB gave organized labor a meaningful gift just before the holidays by issuing a final rule adopting new election case procedures that will likely result in more and faster union elections, and probably also result in more employers having unionized workforces. The new rule becomes effective on April 30, 2012.
The New Year: Out With The Old Rules...
During union campaigns, the union and the employer may disagree (vigorously) about the proper size ("scope") of the proposed bargaining unit. Such disputes can include whether certain employees are "supervisory" employees and thus ineligible to vote, or whether different classifications of employees share enough of a "community of interest" to be included in the same bargaining unit, and covered by the same contract. How those disputes are resolved often determine the outcome of the election. Under the existing (er, now old) election rules, employers had the opportunity to litigate these types of bargaining unit scope issues before the election.
...In With The New
The NLRB's new rule essentially eliminates the employer's opportunity to litigate, prior to the election, any disputes over the scope of the bargaining unit proposed by the union. Under the rule, such issues will ordinarily be addressed only after the election takes place. Employers should be aware of how this "vote now, litigate later" rule could impact union elections.
Shorter Election Campaigns: Under the old rules, litigating bargaining unit scope issues usually delayed the election, giving employers additional time to discuss the pros and cons of unions with its workers before the vote. That additional campaign period is now lost, depriving employers of valuable time to counter an organizing campaign that may have started months before the union went to the NLRB seeking an election.
Greater Difficulty in Challenging The Union's Proposed Unit: Although employers may technically be able to litigate unit scope and voter eligibility issues after the NLRB conducts the election, in those cases where the vote results in a "yes" vote for the union (which under the old rules happened more than 60% of the time), employers will be in the difficult position of having to contest threshold legal issues after the employees have already "won" the right to representation. This procedure tilts the playing field in favor of unions.
Considered in the context of the NLRB's August 2011 decision in Specialty Healthcare, this rule means that the petitioning union will get a quick election in the unit of employees it has chosen to organize. Specialty Healthcare enables unions to organize small or "micro" units of employees (such as single classifications of employees or individual departments). The Board held that for an employer to add excluded employees to the union's proposed unit, it must demonstrate that the excluded employees share an "overwhelming community of interest" with the employees the union seeks to represent. In a dissenting opinion, NLRB Member Brian Hayes noted that this test makes it “virtually impossible” for the employer to prove the union's proposed unit is not proper. To make matters worse, now the Employer will ordinarily have to make that argument after the union has already "won."
Why Now? Election Year Politics, That's Why.
That the NLRB issued these new rules now probably had less to do with the holiday spirit than with an election of a different sort--the 2012 U.S. Presidential election and the related gridlock in the U.S. Congress. Up until last week, the Board had three members (out of a possible five) which, after the U.S. Supreme Court's 2010 decision in New Process Steel, is the minimum required for the NLRB to decide cases and issue regulations. Last week was when President Obama's controversial recess appointment of Member Craig Becker ended. The NLRB may have wanted to enact the new rules before it was reduced to two members again, as that may be the last opportunity in an election year for the Obama Administration to do something substantial for organized labor, an important constituency. While nominations for the three NLRB Member vacancies are pending, the gridlocked Senate is not expected to act on those nominations any time soon. While the President could make another recess appointment to ensure a functioning, three-member NLRB, that risks (further) alienating Senate Republicans, all 47 of whom recently signed a letter urging the President not to fill NLRB vacancies using recess appointments. The next few weeks, before Congress reconvenes on January 23 from its holiday recess, could be very interesting for NLRB-watchers. Stay tuned...
Update!
...well you didn't have to stay tuned for long! President Obama has announced three recess appointments to the NLRB. The appointees include two Democrats (Richard Griffin and Sharon Block) and one Republican (Terence Flynn), giving Democrats a 3-2 Board majority. The President’s decision to bypass the Senate confirmation process quickly drew the ire of Senate Republicans, but the President chose that fight over the alternative of allowing the NLRB to go through a prolonged period in which it was unable to issue decisions or adopt regulations. As a result of these appointments, we can expect more pro-labor decisions in 2012.
Update - New Rule Requires Employers to Post Notice of Employee NLRA Rights
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.
New Rule Requires Employers to Post Notice of Employee NLRA Rights
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.
NLRB Facebook Settlement Creates More Questions Than It Answers
On Monday, February 7, the NLRB issued a news release about a settlement in a case in which an employee criticized her supervisor on her Facebook page. In that post, she called her supervisor a “17,” (which is terminology for a psychiatric patient) and said her supervisor was being a “d***” and a “scum***." This new development has garnered a significant amount of media attention.
We say “development” because, despite the media furor over this case, there was no landmark opinion issued by the NLRB, which is the way the Board makes a policy change or an announces a new policy. Instead, an NLRB Regional Director in Hartford, Connecticut -- there are over 35 of them nationwide -- decided to issue a complaint alleging the firing of the employee was unlawful and the policy was overbroad. After the complaint was issued, there was no hearing before an administrative law judge and there was no ruling by Members of the NLRB in Washington. There was simply a settlement for an undisclosed amount, which was likely modest since remedies under the NLRA are limited to reinstatement (waived in this case), back pay and benefits. The company also agreed to revise its policy.
So, what’s to be learned from this settlement? Not much. The basic rule that came into play is an employee’s right to engage in protected and concerted activity – sometimes referred to as “free speech” in the workplace. Under NLRB case law, broad rights are provided to employees to criticize their supervisors, their employer, and, in general, to communicate in the work place about good and bad developments, such as pay raises and bonuses. However, employees cannot make threats of physical violence and they cannot engage in disloyal conduct.
Unresolved questions going forward include:
(1) Whether an employee is engaged in concerted activity when posting on a social media platform?
(2) What is protected and unprotected on social media, and do the same rules that apply to verbal communications in the workplace apply to social media?
(3) Does it make a difference if the post is done during non-work time?
There are several issues to work through and unfortunately this case clarified very little.
Editor's Note: For more in-depth analysis and discussion about this case, check out Victor's appearance on KGW's Live at 7.
NLRB to Consider Scope of Permissible Solicitation On Employer Premises
The National Labor Relations Board (NLRB) is on its way to making some significant changes, which favor organized labor. One change that may be coming relates to non-solicitation rules. These rules determine when a union organizer can come on a company’s property and solicit employees to join a union. For the time being, a company can prohibit a union organizer from coming on its property so long as it’s not discriminating by allowing other third parties on its property to solicit employees.
There are exceptions; for example, an employer can allow third parties on its property if it’s intended as a benefit for employees, such as a yoga or fitness company holding meetings on site to describe group rates. An employer is also allowed to bring charities such as United Way on site to solicit employees. If an employer allows only these types of solicitations, it is not considered discriminatory to prohibit union organizers from the premises. The blurry line relates to the situation when employees solicit for third parties that are good causes but not charities, such as the girl scouts or fundraisers for public schools.
A pending NLRB case called Roundy’s involved distribution of handbills on company property in front of its retail stores (sidewalks and parking lots). The handbills asked consumers not to shop at Roundy’s claiming unfair wages. The Union contends that Roundy’s allowed several outside third parties on its property – bloodmobiles, Salvation Army, Veteran of Foreign Wars, Shriners and others – and that union agents should be allowed the same access.
The NLRB took the unusual step of requesting amicus briefs from interested parties before it makes a decision. This often signals a major policy shift. Given the labor-friendly composition of the NLRB, it’s likely to give greater rights for union organizers to enter onto a company’s property, such as parking lots, sidewalks and possibly inside the facility itself – in a non-work area. If this becomes law, it’ll be much easier for an organizer to solicit an employee on company property.
One step employers can take now is to review and update their non-solicitation policy and ensure that’s it’s being applied in a consistent manner. That is, ensure that you’re not allowing third parties on your property to solicit your employees – or you may be opening your door to a union organizer.
Supreme Court Invalidates Nearly 600 Decisions Made by Two-Member NLRB
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."
President Obama Uses Recess Appointments to Fill NLRB, EEOC Seats
This week President Obama announced that he would make recess appointments to fill vacancies on the National Labor Relations Board (NLRB) and the Equal Employment Opportunity Commission (EEOC). The move allows the White House to bypass the Senate confirmation process, which promised to be extremely contentious.
The appointments will add two Democratic members to the NLRB: Craig Becker and Mark Pearce. Both appointees were strongly opposed by Republicans because of their anticipated pro-labor viewpoints. Becker, a labor law professor, has been associate general counsel for the Service Employees International Union (SEIU) since 1990 and has also served as an AFL-CIO staff counsel since 2004. Pearce is a partner with the firm of Creighton, Pearce, Johnsen & Giroux in Buffalo, New York, where he represents unions and employees. President Obama's recess appointments do not include Republican nominee Brian E. Hayes, the Republicans' labor policy director for the Senate Committee on Health, Education, Labor and Pensions, but Hayes' Senate confirmation is not expected to encounter any significant roadblocks.
The EEOC appointments will bring the agency up to a full compliment of five directors. The new appointments include: Jacqueline Berrien as EEOC chair, Chai Feldblum and Victoria Lipnic. Berrien has served as associate director of the NAACP Legal Defense and Educational Fund Inc. (LDF) in New York since 2004 where she has worked on voting rights and political participation issues. Feldblum, a Georgetown University law professor, played a leading role in drafting the original Americans with Disabilities Act and more recently worked on the ADA Amendments Act. She has also worked on the proposed Employment Non-Discrimination Act, which would ban employment bias based on sexual orientation or gender identity. Lipnic is a lawyer with Seyfarth Shaw in Washington, D.C. and served in President George W. Bush's administration as assistant secretary of labor for employment standards from 2002 until 2009. In addition, EEOC supervisory attorney P. David Lopez will appointed to the post of EEOC general counsel.
What will these appointments mean for employers? First, expect to see more rule changes. Both the EEOC and the NLRB have for some time operated without quorums, meaning that the agencies have not been able to take on any controversial cases or make significant rule changes. Now that they have enough members, expect a flurry of activity from both bodies. For the NLRB in particular, this may mean reversals of many pro-employer decisions made during the Bush years. Second, expect both agencies to get a lot more employee-friendly. President Obama's appointments will appease labor unions and employee advocates who adamantly supported his campaign but until now have not received much in return. Those groups expect to get a return on their investment, and these appointments will go along way towards making that happen.
Supreme Court to Rule on Authority of Two-Member NLRB
This week the U.S. Supreme Court agreed to hear an appeal in New Process Steel v. NLRB and determine whether the National Labor Relations Board (NLRB or "the Board") has the authority to decide cases with only two sitting members.
The NLRB is the independent federal agency that administers the National Labor Relations Act, the primary law governing relations between unions and employers in the private sector. Typically, the NLRB is made up of five members, appointed by the President. There are currently three vacancies on the Board, leaving only two sitting members. The statute governing the NLRB's powers (29 U.S.C. § 153(b), if you really care) provides that "three members of the Board shall, at all times, constitute a quorum of the Board." Nevertheless, the two remaining Board members have decided a number of cases, under the theory that as long as those two members agree, they would have formed the majority of any three-member quorum anyway.
The Court will resolve a split between the federal appellate courts. In New Process Steel v. NLRB, (the case on appeal) the Seventh Circuit held that the current two-member NLRB does have the power to decide cases. The First Circuit agreed in in Northeastern Land Services v. NLRB. However, the D.C. Circuit disagreed in Laurel Baye Healthcare of Lake Lanier v. NLRB and rejected the power of a two-member Board to do anything. If you want to read more about this dispute, click here to read New Process Steel's Petition for Writ of Certiorari to the Court.
For most employers, New Process Steel will have little relevance--none of the cases decided by the two-member Board were particularly controversial, and none represented a significant departure from existing NLRB law. The only employers with a significant stake in the outcome of New Process Steel will be those employers whose cases were ruled on by the two-member Board. If the Court reverses New Process Steel, those cases will be reheard by a future three-member panel, and will likely be upheld.
Proposed Legislation Would Allow Employers to Fire Union Salts
The Truth in Employment Act of 2009 (TEA) would allow employers to lawfully fire employees who are suspected of “salting,” or attempting to organize the contractor's workforce from within on behalf of a labor union. The bill was introduced in the Senate by Sen. Jim DeMint (R-S.C.) and in the House by Rep. Steve King (R-Iowa).
TEA would amend the National Labor Relations Act to protect the employer from being required to hire any person who is seeking a job in order to promote interests unrelated to those of the employer. “Small businesses should never be forced to hire undercover union organizers who seek to bully workers and harm companies,” said Senator DeMint. “We must pass the Truth in Employment Act or successful small businesses will remain vulnerable to union salting tactics that threaten jobs." Click here to read Senator DeMint's press release on TEA.
Does TEA have a realistic chance of becoming law? Not really. The Republicans unsuccessfully tried to pass TEA in 2005 and 2007, and that was when they had a fellow Rebpublican in the White House and much better numbers in both houses. Expect this one to die on the vine.
Employers can take some solace, however; last year, the National Labor Relations Board held in Toering Electric Company that an employer is not required to hire an employee who is not "genuinely interested in seeking to establish an employment relationship with the employer," thus significantly restricting the amount of salt in unions' diets. If you have concerns about union salting in your workplace, you might want to read the NLRB's Guideline Memorandum Concerning Toering Electric Company.
Major Budget Increases for Federal Labor and Employment Enforcment Agencies
The Obama Administration has released its fiscal year 2010 budget request. Among the items are several increases for the federal agencies that oversee labor and employment matters. Here are some highlights:
- $104.5 billion to the Department of Labor, an increase of 10 percent, to increase its staff and enforcement activity.
- $283 million for the National Labor Relations Board, an increase of 7.9 percent.
- $267 million for the Equal Employment Opportunity Commission, an increase of 6.6 percent, to increase staffing.
- $145 million of the Justice Department's Civil Rights Division, an increase of 18 percent.
- $112 million to the Department of Homeland Security for the E-Verify program.
Assuming they are passed by Congress, these increases reverse a long trend under the Bush Administration to cut funding to the federal agencies that enforce labor and employment laws. Employers can expect increased enforcement of those laws by the federal government in the years to come.
President Obama Announces NLRB Nominations
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Last Friday, President Obama announced his intention to nominate Craig Becker and Mark Pearce as Members to the National Labor Relations Board (NLRB), the government agency that administers the National Labor Relations Act, the primary law governing relations between unions and employers in the private sector. Click Here to read the White House Press release.
Normally the Board has five members, three from the President's party and two from the other, but right now the Board has only two members, one Democrat and one Republican. Both of these nominees are Democrats, meaning the next will be a Republican. Here's what the White House has to say about each:
- Craig Becker currently serves as Associate General Counsel to both the Service Employees International Union and the American Federation of Labor & Congress of Industrial Organizations. He graduated summa cum laude from Yale College in 1978 and received his J.D. in 1981 from Yale Law School where he was an Editor of the Yale Law Journal. After law school he clerked for the Honorable Donald P. Lay, Chief Judge of the United States Court of Appeals for the Eighth Circuit. For the past 27 years, he has practiced and taught labor law. He was a Professor of Law at the UCLA School of Law between 1989 and 1994 and has also taught at the University of Chicago and Georgetown Law Schools. He has published numerous articles on labor and employment law in scholarly journals, including the Harvard Law Review and Chicago Law Review, and has argued labor and employment cases in virtually every federal court of appeals and before the United States Supreme Court.
- Mark Gaston Pearce has been a labor lawyer for his entire career. He is one of the founding partners of the Buffalo, New York law firm of Creighton, Pearce, Johnsen & Giroux where he practices union side labor and employment law before state and federal courts and agencies including the N.Y.S. Public Employment Relations Board, Equal Employment Opportunity Commission, the U.S. Department of Labor, and the National Labor Relations Board. Pearce in 2008 was appointed by the NYS Governor to serve as a Board Member on the New York State Industrial Board of Appeals, an independent quasi-judicial agency responsible for review of certain rulings and compliance orders of the NYS Department of Labor in matters including wage and hour law. Pearce has taught several courses in the labor studies program at Cornell University’s School of Industrial Labor Relations Extension. He is a Fellow in the College of Labor and Employment Lawyers. Prior to 2002, Pearce practiced union side labor law and employment law at Lipsitz, Green, Fahringer, Roll, Salisbury & Cambria LLP. From 1979 to 1994, he was an attorney and District Trial Specialist for the NLRB in Buffalo, NY. Pearce received his J.D. from State University of New York, and his B.A. from Cornell University.
If affirmed by the Senate, these appointments, along with NLRB Chair Wilma Liebman, will give the NLRB a solid pro-labor majority for the next four years. Regardless of what happens with the Employee Free Choice Act, you can safely expect major changes in labor law, as the Obama Board likely charts a much different course than the Board did during the Bush years.
President Obama Nominates Wilma Liebman to Chair NLRB
Late last month, President Obama appointed Wilma B. Liebman to chair the National Labor Relations Board (NLRB), the agency that enforces federal labor law. Click here to read the NLRB's press release on the appointment. Chairman Liebman has served on the Board since November 14, 1997. First appointed by President Clinton, she is now serving her third term, which will expire on August 27, 2011.
Chairman Liebman is considered one of its most union-friendly members, and was often a strongly dissenting voice on the Board during the eight years of the Bush administration. Her appointment was not unexpected, and confirms predictions that the NLRB would shift to the left during the Obama administration.
Don't think the Board will change under Liebman's watch? Watch her testify before congress regarding some controversial decisions under the Bush Board, and perhaps you will change your mind:
Supreme Court Rejects Appeal on Aliens' Right to Vote in Union Elections
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.
NLRB 2008 Report Shows Efficient, Aggressive Enforcement of Labor Law
Ronald Meisburg, General Counsel for the National Labor Relations Board (NLRB) issued his annual Summary of Operations memo on October 29, 2008. (The NLRB is the federal agency that enforces our country's labor laws and conducts union elections.) Mr. Meisburg's memo is full of interesting news and developments on all facets of the NLRB's operations. To read the complete memo, click here. If you want the Cliff's Notes version, here you go:
- Case intake is up: ULP cases are up 1.6%, from 22,147 in FY 2007 to 22,501 in FY 2008. New representation cases are up 2.3% from 3,324 to 3,400.
- Elections are being held sooner: the NLRB closed 83.5% of all representation cases within 100 days, exceeding its target of 80%. 93% of all initial union representation elections were conducted within 56 days of the filing of the petition, with a median of 39 days from filing.
- ULPs are being investigated faster: The Board closed 68.1 percent of all ULP cases within 120 days, meeting its target of 68%, and closed 75.2% of meritorious ULP cases within 365 days, meeting its target of 75%.
- The NLRB is winning a lot: Its Regional Offices won 90.8% of Board and Administrative Law Judge unfair labor practice decisions in whole or in part in FY 2008 (up 5% from 2007), and it recovered a total of $70,001,594 on behalf of employees as backpay or reimbursement of fees, dues, and fines. It obtained reinstatement for 1,564 terminated employees.
- The NLRB is using injunctions. The Board authorized a total of 28 Section 10(j) injunction cases in FY 2008, as compared to 25 in FY 2007. The “success rate” (the percentage of 10(j) cases in which the NLRB achieved either a satisfactory settlement or substantial victory in litigation) was 84%.
- The NLRB is more efficient: It met all three of its primary goals, closing 83.50% of all
representation cases within 100 days (target 80%), 68.10% of all unfair labor practice cases within 120 days (target 68%), and 75.22% of all meritorious unfair labor practice cases within 365 days (target 75%).
What does this mean for employers? The NLRB is more efficient and pushing cases to resolve more quickly, which may give employers less time to respond to petitions for election. Also, the Board continues to be more aggressive in litigation and in seeking injunctions, which is rarely good news for employers. In short, don't take the NLRB lightly.
Starbucks Settles NLRB Charge With Wobbly Organizer
The New York Times is reporting that Starbucks has settled with the National Labor Relations Board an unfair labor practice claim filed by a former employee who alleged he was terminated for attempting to organize his coworkers to join the Industrial Workers of the World, aka "the Wobblies."
Under the terms of the settlement, Starbucks will post a notice in the employee's store for 60 days informing workers they have a right to unionize under federal law. Starbucks will also remove from its files any reference to the employee's firing and will repay him for any loss of earnings. (Starbucks had already voluntarily reinstated the employee before he filed his charge with the NLRB). For more about the Starbucks Workers' Union (a branch of the IWW), click here.
This case is a reminder to employers that it is unlawful to discharge or take any other adverse action against an employee because of that employee's support for or activities on behalf of a labor union. Just because the employee supports a union does not require you to give him or her special treatment, nor does it make them immune for discipline unrelated to their union activities; however, if you terminate a union organizer, you proceed at your own (substantial) risk.
"Permanent" Strike Replacements Can Be Employed At Will
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.
Ninth Circuit Overturns NLRB in Dues Checkoff Case
Earlier this week, the Ninth Circuit Court of Appeals overturned for the second time a decision by the National Labor Relations Board, and held that two Las Vegas casinos violated the National Labor Relations Act by unilaterally terminating dues checkoff without first bargaining with the union over that decision. Local Joint Executive Bd v. NLRB (9th Cir 08/27/2008).
The employer argued that the parties' collective bargaining agreement allowed it to end dues checkoff at the expiration of the agreement and the NLRB agreed; the Ninth Circuit, however, held that the contract language does not show a "clear and unmistakable waiver" of the unions' right to bargain over ending dues checkoff. This was the second time this case was before the Ninth Circuit - the first time, the court remanded the case to the NLRB to "articulate a reasoned explanation" for its conclusion that dues-checkoff disputes should be excluded from the "unilateral change doctrine" recognized in NLRB v. Katz, 369 US 736 (1962).
The lesson for union employers: remember your obligation to bargain with the union in good faith before making any unilateral change to the terms and conditions of employment, unless there the union has clearly and unmistakenly waived its right to bargain over that change. Unilateral changes might get a pass from the current NLRB, but they are unlikely to be tolerated by the appellate courts.
NLRB Issues New Guidelines on Employee Political Activity
According to the new guidelines, employee political speech that touches on employment issues may be protected by Section 7 of the National Labor Relations Act. In essence, if there is a direct nexus between employment-related concerns and the specific issues that are the subject of the political speech, then the speech is protected. Of course, you can still counsel the employee to confine his activities to appropriate places and times, if it is interfering with work.
So, the employee's views on why the U.S. should pull out of the U.N.? Why industrial hemp should be legalized? Probably not protected speech. The employee's views on the minimum wage, or the expansion of medical marijuana laws to require workplace accommodation? Probably both protected under the NLRA.
