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.
Seasons' Greetings From The California Legislature--New Laws That Apply To Employers In January 2012
The California legislature has done plenty this year to leave in employers' stockings for the holidays--new employment laws that will become effective January 1, 2012. In addition to the new California Transparency in Supply Chains Act we blogged about earlier, after some eggnog and holiday cheer, employers will need to be aware of new legal obligations that will kick in as we kick off 2012. Here are the highlights.
“Anti-Wage Theft” Law (AB 469). The Wage Theft Prevention Act of 2011 requires employers to provide non-exempt employees, at the time of hiring, a notice specifying the employee’s rate or rates of pay and the basis on which the employee’s wages are to be calculated (such as hourly, daily, piece, salary, commission, etc.). The notice must also include applicable overtime rates, allowances (if any) claimed as part of the minimum wage, the employer’s designated regular payday, the name of the employer (including any “doing business as” names), the employer’s physical and mailing addresses, and contact information for the employer’s workers’ compensation carrier. The Act also requires the employer to notify employees in writing of any changes made to any of this information within seven days of the implementation of such changes, unless the changes are reflected on a timely wage statement or other writing required by law. The Act adds an element of criminal liability by providing that any employer who willfully fails to pay wage-related Labor Commissioner orders or court judgments is guilty of a misdemeanor.
Independent Contractors (SB 459). This new law cracks down on employers who misclassify their employees as independent contractors by imposing a fine of between $5,000 and $25,000 for “willfully” misclassifying a worker as an independent contractor. “Willful misclassification” means avoiding employee status for an individual by voluntarily and knowingly misclassifying that individual as an independent contractor. The law also imposes joint and several liability for a non-attorney consultant to advise an employer to willfully misclassify someone as an independent contractor.
Background Checks (AB 22). This law prohibits most employers from obtaining or relying on consumer credit reports regarding employees or job applicants, except in certain specified limited circumstances. The law does not apply to financial institutions or entities required by law to perform credit checks. Under the new law, employers may still obtain and rely upon credit reports for managerial employees covered by the executive exemption.
Pregnancy Disability Leave (AB 592 and SB 299). This law expressly prohibits “interference” with the exercise of any right provided under the California Family Rights Act, or due to disability by pregnancy, childbirth or related medical conditions. In a provision that may prove to be preempted by ERISA, the law also requires employers to maintain and pay for health coverage under a group health plan for any eligible female employee who takes up to four months of leave due to pregnancy, childbirth or a related medical condition in a twelve month period.
Gender Identity and Expression (AB 887). Existing law prohibits discrimination and harassment based on gender. This law expands the definition of “gender” to include both gender identity (how the person sees him or herself) and gender expression (how other people view the person). Under the new law, an employee must be permitted to dress consistent with the employee’s gender identity and expression.
Genetic Information Discrimination (SB 559). Discrimination in hiring or employment based on genetic information is now unlawful under the Fair Employment and Housing Act. Genetic information is defined to include the individual employee’s genetic tests, the genetic tests of the employee’s family members, and the manifestation of a disease or disorder in the employee’s family members.
Commission Agreements (AB 1396). This law requires all contracts for employment involving commissions as a method of payment to be in writing and to set forth a method by which the commissions are required to be computed and paid. The employee must be given a signed copy, and the employer must obtain a signed receipt from each employee. This law does not take effect until January 1, 2013, so employers have a year to prepare for compliance.
Agricultural Labor Relations (SB 126). This law authorizes the California Agricultural Labor Relations Board to certify union elections when employer misconduct affects the outcomes.
Happy Holidays!
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.
Companion Anti-Union Bills Slated to Pass Idaho Legislature
Never shy about taking on unions, especially in a state where organized labor enjoys little support outside the government sector, the Idaho Legislature recently introduced a pair of bills for addition to the state’s existing Right to Work statute.
Senate Bill 1007, named the “Fairness in Contracting Act,” is intended to “promote fairness in bidding and contracting.” This bill provides, among other things, that a “contractor or subcontractor may not directly or indirectly receive a wage subsidy, bid supplement or rebate on behalf of its employees, or provide the same to its employees, the source of which is wages, dues or assessments collected by or on behalf of any labor organization(s), whether or not labeled as dues or assessments.” The proposed measure would also prohibit labor organizations from “directly or indirectly” paying “a wage subsidy or wage rebate to its members in order to directly or indirectly subsidize a contractor or subcontractor, the source of which is wages, dues or assessments collected by or on behalf of its members, whether or not labeled as dues or assessments.” Use of any fund financed by wages collected by or on behalf of any labor organization, whether or not labeled as dues or assessments, to subsidize a contractor or subcontractor doing business in the state of Idaho would be deemed unlawful.
Contractors, including subcontractors, or labor organizations that violate the provisions of this proposed law will be guilty of a misdemeanor and could be fined an amount not to exceed ten thousand dollars ($10,000) for a first offense, twenty-five thousand dollars ($25,000) for a second offense, and one hundred thousand dollars ($100,000) for each and every additional offense.
The legislation would also confer standing on any “interested party,” including a bidder, offeror, contractor, subcontractor or taxpayer, to challenge any bid award, specification, project agreement, controlling document, grant or cooperative agreement in violation of the provisions of the law. If an interested party prevails in a lawsuit challenging the bill, it will be awarded costs and attorney's fees.
A companion bill, Senate Bill 1006 (“The Open Access to Work Act”), introduced at the same time, bars bidders on public works projects from paying a predetermined amount of wages or wage rate; or type, amount or rate of employee benefits. The law does not apply when federal law requires the payment of prevailing or minimum wages to persons working on projects funded in whole or in part by federal funds. A separate provision makes clear that the contractor party cannot be required to enter into an agreement with a labor organization as part of the contract.
Both of these bills were printed and sent to the State Affairs Committee for further action last week. Yesterday, the full Senate considered and voted on SB 1006, approving it by a 27-7 vote. It has now been referred to the Idaho House. SB 1007 on Monday passed the Committee by a 7-2 party line vote, and will soon be taken up by the full Senate.
Although these bills remain at a relatively early stage, questions have been raised about their legality and potential conflict with federal labor law. Stay tuned for more.
Court Dismisses Lawsuit Against Oregon Mandatory Meeting Law
Last week a federal judge dismissed a lawsuit aimed at blocking SB 519, the Oregon law the prohibits employers from requiring employees to attend meeting about, among other things, labor unions. Click here to read the District of Oregon's opinion in Associated Oregon Industries v. Avakian.
SB 519, passed by the Oregon legislature in 2009, prohibits employers from disciplining or threatening to discipline employees who refuse to attend mandatory or "captive audience" meetings on religious or political matters, including the employer's views on labor unions. SB 519 also requires employers to post a notice informing employees of their rights under the law, which you can download here.
Associated Oregon Industries brought a federal lawsuit on behalf of Oregon employers, arguing that the law is preempted by the National Labor Relations Act and violates employers' First Amendment free speech rights. The court did not reach the merits of that challenge; instead, the court held that the case was not ripe for review, and indicated it could not be challenged "until an employer holds a mandatory meeting, and then creates an employee's cause of action by disciplining an employee who refuses to attend."
In our humble opinion (not to be taken as legal advice!), the portion of SB 519 that applies to union meeting will someday be successfully challenged on the basis that it is preempted by federal labor law. This latest ruling, however, seems to indicate a court will be reluctant to rule on the bill until it is presented with a case involving employee discipline, and that may take an employer with enough interest in such meetings to be willing to run the risk and costs of litigation.
When Is It Okay to Cuss Out Your Boss?
Most of us assume that if an employee swears at a manager or, he or she can be disciplined or even fired. That assumption may be wrong, depending on the context in which the swearing occurs. A federal judge recently held that the Federal Aviation Administration violated federal labor law when it removed a local union president from its premises after he used profanity toward his supervisor in the course of union activity. Click here to read the opinion in FAA and National Air Traffic Controllers Association.
In FAA, an employee (who was also the union president) got into a verbal altercation with his supervisor over what the employee felt were insufficient staffing levels under their union contract. In the course of that altercation, the employee told his boss: “F*** you, I don't give a f***!” (Imagine a certain four-letter word that rhymes with "duck.") In response, the supervisor had the employee escorted off of the employer's premises. A federal judge held that the employer's response violated the employee's rights under federal labor law. The judge ruled that because the swearing occurred in the course of union activity, it was protected speech: “the use of profanity, standing alone, does not remove conduct or speech from the protection of [federal labor law]." The Judge also noted that the outburst was brief, made in a normal tone of voice, and not overheard by other employees.
FAA teaches us an important lesson: even relatively robust swearing by an employee during the course of otherwise protected activity may be protected. The same logic behind the FAA decision could possibly apply to other types of protected employee speech: union activity, harassment complaints, discrimination complaints, safety reports, etc.
So when does profanity, even in the scope of protected activity, lose its protection? There are no "bright line" rules, but courts look to several factors:
- the volume, severity and duration of the outburst
- whether it is accompanies by threats or threatening gestures
- whether there is a workplace culture that condones or encourages profanity
- whether it is overheard by other employees
- whether the profanity is likely to disrupt workplace operations
- whether it rises to the level of verbal harassment that may violate the employer's policies
- whether it was a spontaneous outburst made out of frustration, instead of a premeditated attempt to humiliate the supervisor.
In any event, employers should proceed with a great deal of caution before disciplining an employee who uses profanity in the course of a protected activity. If the swearing was not in the course of a protected activity, disciplining the employee for insubordination or unprofessional behavior is relatively risk-free.
Oregon Employers: Download SB 519 (Mandatory Meeting Ban) Notice Here!
Back in June, we reported on Oregon SB 519 - the law taking effect January 1, 2010 that will prohibit Oregon employers from disciplining any employee who refuses to participate in communications concerning the employer’s opinions on religious or political matters - including labor unions.
SB 519 also requires ALL Oregon employers to post a notice informing employees of their rights under the new law. We usually rely on the Oregon Bureau of Labor and Industries (BOLI) to supply us with all mandatory postings, but BOLI has chosen not to publish an SB 519 posting.
We at the Stoel Rives World of Employment and Stoel Rives couldn't just leave you in the lurch - we have created our own SB 519 Poster - just click the link to download, free of charge. It's a .pdf document, and we've included two per page, just in case you want multiple copies. We would recommend that you post the notice wherever you typically put up your employment law posters. If you have an extra copies, we think they make excellent stocking stuffers (at least for the HR professional in your family).
DISCLAIMER! (You knew this was coming, right?) No government official or agency has approved this poster as fulfilling the SB 519 requirements. This poster represents our best efforts to create a poster that complies with those requirements, but we make no representations, promises or warranties as to whether it fulfills the legal requirements of SB 519. As always, the materials available at this web site/blog are for informational purposes only and not for the purpose of providing legal advice or soliciting legal business. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this Web site/blog or any of the materials or e-mail links contained within the site do not create an attorney-client relationship between Stoel Rives and the user or browser.
Key EFCA Ally Withdraws Support for Card-Check Bill
California Senator Dianne Feinstein has withdrawn her support for the Employee Free Choice Act (EFCA), according to this editorial in the Oakland Tribune. Because of the recession, the time is not right, according to Senator Feinstein, who stated that she still hopes a union/management compromise is possible.
Senator Feinstein's withdrawal of support may put the nail in EFCA's coffin - at least in its current form. It remains possible that a modified form of EFCA - without the original bill's controversial card-check provision - will still pass in late 2009 or 2010. A revised EFCA will likely replace the card check with faster election periods, giving employers less time to actively campaign against unionization efforts. Even with an apparently watered-down version of EFCA on the way, employers should be prepared to face a radically different set of federal labor laws as soon as January 1, 2010. The Stoel Rives World of Employment will continue to keep an eye on EFCA and bring you updates as they occur.
Supreme Court Agrees to Hear Case About Meddling International Union
The US Supreme Court just agreed to hear a case asking just how much international unions will be allowed to meddle in the affairs of their local affiliates. In Granite Rock v. Teamsters, the employer sued the International Brotherhood of Teamsters in federal court claiming that the International interfered with the relationship between the employer and the Local Teamsters union.
In Granite, the employer and the Local had reached a tentative new agreement which contained a no-strike clause. The employer alleged that the Local ratified the agreement and then engaged in a strike. Apparently a high ranking official of the International was the motivating force behind the strike. The 9th Circuit held that the employer could not sue the International because the agreement was between the employer and the Local, and did not involve the International. The Supreme Court granted cert and will hear the case, perhaps recognizing that international unions are often working behind the scenes with their local unions.
The Court will probably not hear the case until the 2010 session, and it could be some time before an opinion is issued. It is not uncommon for employers to have good relationships with local unions. Sometimes those relationships are strained through pressure from out-of-town international union officials. Currently, international unions are somewhat insulated from liability for meddling in negotiations and other ongoing business relationships between local unions and employers. Ultimately, this decision could open a new legal avenue for employers to hold international unions accountable for their actions.
9th Circuit Orders Damages, but Not Reinstatement for Unauthorized Alien Workers
What's an employer to do when it is ordered to reinstate former employees, but those employees are not legally authorized to work in the United States? Pay liquidated damages instead, according to the Ninth Circuit's recent decision in NLRB v. C&C Roofing Supply Inc.
In C&C, the National Labor Relations Board (NLRB) alleged that the employer unlawfully fired 20 workers for engaging in union activity. The parties reached a formal settlement that called for reinstatement of the illegally fired workers and payment of specific amounts of liquidated damages to each. However, the employer then refused to reinstate the employees because many of them were unauthorized aliens and rehiring them would violate the Immigration Reform and Control Act (IRCA) and the Legal Arizona Workers Act, which both prohibit hiring unauthorized aliens.
The Ninth Circuit solved the dilemma by ordering the employer to pay the agreed-upon liquidated damages, but did not require the employer to reinstate the unauthorized employees. But how does this case square with Hoffman Plastic Compounds Inc. v. NLRB? There, the U.S. Supreme Court held 5-4 that the board may not order back pay for unauthorized aliens, despite their firing in violation of federal labor law, because doing so would violate immigration policy expressed in IRCA. In C&C, the Ninth Circuit dodged that issue by ruling that agreed-upon liquidated damages as part of a settlement do not raise the same issues as back pay ordered by the court, as the employees need not be "available to work" in order to receive liquidated damages. Don't be surprised if this one gets appealed up to the Supreme Court for a determination if it really does square with Hoffman.
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.
Labor Unions Targeting Green Energy Development
Labor unions are seeing a rare growth opportunity in green power. Despite the recession, there has been a building boom in green energy, in particular solar and wind projects. As reported recently in the New York Times, labor unions see something in green energy for them as well, and they're using intense political pressure to get it.
When a new solar or wind project is being built, a union will approach the builder and demand that it use only union labor on the project. If the builder agrees, the union then urges local regulators to quickly approve the project; if the builder refuses, however, the union then raises myriad environmental concerns with regulators in an attempt to stall or even completely derail the project. Apparently, a union-built solar installation won't have the same impact on the habitat of the short-nosed kangaroo rat or the ferruginous hawk as a non-union one. Right.
These tactics aren't new; labor unions have made aggressive use of the environmental laws for years to put pressure on traditional energy producers to use union labor. But, with union membership in an overall decline, unions are desperate to maintain relevance in the growing green economy.
Interested in wind, solar and other forms renewable energy? Check out our sister blog, Renewable + Law, from Stoel Rives' Renewable Energy Initiative.
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.
Proposed Law Would Allow Employers to Pay Extra to Union Workers
The proposed Rewarding Achievement and Incentivizing Successful Employees (RAISE) Act, introduced in Congress last week, would change federal labor law to allow employers to pay higher wages to selected union employees. Sounds like a no brainer, right? Guess again.
The Act was introduced in the Senate by Sen. David Vitter (R-La.) and in the House by Rep. Tom McClintock (R-Calif.) Under the RAISE Act, collective-bargaining agreements would establish a "floor" for wages, a minimum standard that employees could then exceed for "those workers who go the extra mile." Under current law, an employer must first bargain with the union and obtain the union's agreement before rewarding individual achievement. Click here for an explanation of the RAISE Act from conservative think tank the Heritage Foundation.
Who would oppose such a law? Unions. Unions are adamantly opposed to allowing employers the discretion to reward individual efforts (one could accurately state that unions oppose allowing employers any discretion whatsoever, but that's a topic for a different post). Expect the unions to quietly put pressure on the Democratic majority to kill this bill. In our humble opinion, the RAISE Act is primarily an attempt by Congressional Republicans to bait unions into embarrassing themselves by opposing a bill that aims to give their own members higher pay. Undoubtedly, this will also play into the Republicans' strategy of opposing the Employee Free Choice Act. But, given the current Democratic majority in Congress, don't expect RAISE to fly.
Stoel Rives to Host Employee Free Choice Act Seminar in Portland June 11
If passed in its proposed form, the Employee Free Choice Act ("EFCA") will revolutionize federal labor laws by allowing unions to organize without a secret-ballot election. Other onerous provisions include shortening the time to negotiate a first contract and, if the parties do not agree, allowing an arbitrator (a judge) to decide the terms of the first contract. While Congress is debating several compromises over EFCA, just about any version of the law will tilt the playing field sharply in favor of labor unions. Union and non-union employers must be prepared to face new organizing tactics in light of EFCA and the unions’ sophisticated use of the Internet.
Please join Labor & Employment attorneys Victor Kisch and Dennis Westlind for a seminar about EFCA and the do’s and don’ts for remaining union-free in the new environment. We will also discuss other likely changes to labor laws. The seminar will cover:
- How will EFCA make it easier for unions to organize? What can a non-union employer do under EFCA?
- How do unions organize in the age of Facebook, MySpace, Twitter, chat rooms, websites, text messages, email and so on?
- Effective no solicitation policies;
- What key issues make a work force vulnerable to union organizing? How can an employer address employee concerns?
- Salts -- If union organizers seek employment at your company, what can you do?
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Thursday, June 11, 2009 |
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Cost: |
Complimentary (lunch included) |
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Where: |
Stoel Rives LLP |
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Parking: |
We will validate parking for most nearby parking garages. |
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RSVP: |
Space is limited! Click here to register online by June 9. |
Supreme Court: Arbitration Provisions in Collective Bargaining Agreements Enforceable on Statutory Claims
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Today the United States Supreme Court issued a decision of paramount importance to union employers, holding that arbitration clauses in collective bargaining agreements (CBAs) are enforceable as to statutory claims. Click here to read the decision in 14 Penn Plaza LLC v. Pyett.
In Penn Plaza, several union members asserted claims against their employer under the Age Discrimination in Employment Act, alleging that they were reassigned to different positions because of their age. The employer moved to dismiss their suits on the basis that the CBA required union members to submit any claims of employment discrimination to binding arbitration under the CBA’s grievance and dispute resolution procedures. Those motions were denied by the lower courts.
In a 5-4 decision, the Supreme Court reversed, holding that a CBA provision that clearly and unmistakably requires union members to arbitrate ADEA claims is enforceable as a matter of federal law. Because employment-related discrimination claims are "conditions of employment" under the National Labor Relations Act, they are subject to mandatory bargaining. The court also emphasized that arbitration is an adequate means to resolve statutory claims as well as alleged contract violations.
The Penn Plaza decision reverses a long line of court cases holding that union members cannot be required to arbitrate statutory claims. This is a great outcome for union employers, who can now require union employees to arbitrate statutory claims -- generally a more cost-effective and expedient method of resolution. If your CBA does not contain such a provision (or if the provision does not provide for arbitration as the exclusive means to resolve statutory claims), you might want to consider proposing such a provision in your next contract negotiations.
President Obama Signs Executive Order Allowing PLAs on Federal Projects
President Obama recently signed his fourth labor-friendly executive order, this time allowing the federal government to require project labor agreements (PLAs) on large-scale federal construction projects. This order overturns a prior order from President Bush disallowing PLAs. Click here to read the text of the order. This latest action follows Obama’s three executive orders earlier this month that reversed a trio of Bush-era orders governing the way federal contractors deal with union workers.
A PLA is defined as "a pre-hire collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project." PLAs are relatively common in the construction industry. Unions tend to like project labor agreements as they streamline the bargaining process and generally set high wages and benefits, making it easier for union contractors who pay those higher wages and benefits to get the work.
Not surprisingly, union officials are very happy about the latest order. You can bet non-union builders and contractors aren't as happy. Click here to read the Associated Builders and Contractors' position on PLAs.
President Obama Signs Three Executive Orders Affecting Federal Contractors
On January 30, 2009 President Obama signed three executive orders affecting federal contractors and their employees. Two of the three orders affect union rights. (Click the title of each order to download it).
- Economy in Government Contracting. Denies federal contractors reimbursement for funds spent on activities designed to persuade employees to join or to not join a union, such as printed materials, consultants or meetings (activities sometimes known as "union busting").
- Notification of Employee Rights Under Federal Labor Laws. Requires all federal contracts to require contractors to post a notice informing employees that they have a right either to join or to not join a union. A prior order from President Bush, required contractors to post a notice informing employees that they had a right not to join a union.
- Nondisplacement of Qualified Workers Under Service Contracts. Requires all federal contracts to include a provision requiring any contractor who assumes the contract from a previous contractor to retain that previous contractor's qualified employees.
The orders are part of President Obama's Task Force on Middle Class Working Families and, according to the White House, are designed to "level the playing field for workers and the unions that represent their interests." If you're curious about what labor unions think of the orders, check out this uncurbed enthusiasm from the AFL-CIO. We haven't seen a lot of reaction from employers groups, but we'll make the bold prediction that they won't be too happy. Keep in mind: these orders only affect federal contractors; if you don't sell goods or services to Uncle Sam, they probably don't apply to you.
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.
U.S. Supreme Court to Hear Six L&E Cases This Term
The U.S. Supreme Court opened its 2008-2009 term on October 6 with six labor and employment law cases on its docket. (For docket information and questions presented, click on the name of the case).
- Locke v. Karass: may a public employee union may charge nonmembers for representational costs for litigation expenses incurred by the international union on behalf of other bargaining units?
- Kennedy v. Plan Administrator for DuPont Savings & Investment Plan: is a qualified domestic relations order (QDRO) is the only valid way under ERISA for a divorcing spouse to waive his or her right to the other spouse's pension benefits?
- Crawford v. Metro. Gov't of Nashville & Davidson County: Is an employee who cooperates with an employer-initiated investigation into alleged unlawful discrimination protected by Title VII's anti-retaliation provisions?
- Ysursa v. Pocatello Education Ass'n: does an Idaho law that prohibits local government employers from allowing employee payroll deductions for political activities violate the First Amendment free speech rights of unions and their members?
- 14 Penn Plaza LLC v. Pyett: do employees covered by a collective bargaining agreement which providies that statutory employment discrimination claims must be pursued through the contractual grievance and arbitration procedures have a right for a court to decide their discrimination claims?
- AT&T Corp. v. Hulteen: must an employer give full service credit for purposes of calculating retirement benefits for pregnancy leaves taken before the Pregnancy Discrimination Act of 1978 if the plan gave full credit for other types of temporary disability leaves?
Some of these cases (such as the Penn Plaza and Crawford cases) have the potential to make significant changes in existing law. Stay tuned to the Stoel Rives World of Employment for developments as they occur!
Union Liable for Improperly Accessing Drivers' Licence Records
Earlier this week, the U.S. Court of Appeals for the Third Circuit held labor union UNITE HERE liable under the federal Driver's Privacy Protection Act (DPPA) for accessing the motor vehicle records of Cintas Corp. employees to find their home addresses. The decision is available here: Pichler v. UNITE.
As part of a 2002 organizing drive, union organizers recorded the license plate numbers on employees' cars in Cintas parking lots, then sought the names and addresses of the vehicle owners, using an online database, private investigators, or information brokers. Cintas employees sued the union as part of a class action alleging that the union's activities violated the DPPA, and the Third Circuit agreed.
The court rejected the union's argument that its activity was allowed under DPPA exceptions for "activity related to litigation or law enforcement," stating that the union attempted to conceal its "clear labor-organizing purpose" for obtaining the vehicle records. The court also held that the union could be liable for punitive damages.
This decision may have far-reaching implications for unions and their conduct of organizing campaigns. Unions will often go to great lengths to obtain employees' home addresses so that union organizers can make home visits to employees (usually during prime time television) for the purposes of obtaining signatures on authorization cards or petitions. This decision takes away one common means of obtaining such information.
