Labor Relations Today

Labor Relations Today

Federal District Court in Texas Issues Nationwide Injunction Against DOL’s New Persuader Rule

Posted in Department of Labor, Federal Court Litigation, Persuader Rules

Calling the Department of Labor’s new interpretation of its LMRDA Persuader Rule “defective to its core,” the District Court for the Northern District of Texas issued a nationwide injunction on June 27, 2016, against the Final Rule published on March 24, 2016. This ruling in National Federation of Independent Business et al. v. Perez, 16-cv-00066 (N.D. Tex, June 27, 2016), comes just days before the July 1, 2016 date on which the New Rule’s most problematic reporting requirements would have become fully effective. It comes also on the heels of last week’s decision by the District Court for Minnesota in Labnet Inc. et al. v. U.S. Department of Labor et al., 16-cv-00844 (D. Minn. June 22, 2016), wherein the court held far more narrowly that the rule might be invalid, but rejected most of the employer’s arguments and declined to enjoin the rule.

Previous Labor Relations Today posts have explained the reporting requirements of the Labor Management Reporting and Disclosure Act of 1959 (LMRDA), and the DOL’s current efforts to expand significantly their scope to cover labor and employment attorneys. Briefly summarized, the law requires financial reporting and disclosure by employers and their consultants of any agreement or arrangement by which the consultant will undertake activities, directly or indirectly, to persuade employees whether or not to exercise their right to organize and bargain collectively.  There has always been a statutory “Advice Exemption” in Section 203(c) of the Act, which exempts from reporting “the services of such [consultant] by reason of his giving or agreeing to give advice to such employer….” Section 204 also exempts certain attorney-client communications from reporting, which is defined as, “information which was lawfully communicated to [an]…attorney by any of his clients in the course of a legitimate attorney-client relationship.”

The DOL’s New Rule would narrow the interpretation of “advice” so as to ensnare, for the first time, any consultants or advisers who provide any sort of advice that might have some persuasive impact on the employees – regardless of whether that consultant or adviser ever has any direct contact with the employees at all, and regardless of whether the employer is ultimately free to make its own decisions to accept or reject the advice. Despite some reference suggesting that the New Rule required no information from attorneys that would violate attorney-client privilege, it would require attorneys to report on the nature of their engagement and fees paid if they did any work for the employer in connection with the persuasion of employees – such as training managers and supervisors how to respond lawfully to organizing efforts, providing lawful draft communications, or development of personnel policies, among others.

In a sweeping decision, the District Court for the Northern District of Texas determined that the Plaintiffs challenging the New Rule have shown a “substantial likelihood of success on the merits” on numerous claims:

  • The New Rule “exceeds DOL’s authority under the LMRDA by effectively eliminating the statute’s Advice Exemption contrary to the plain text of Section 203(c),” a finding consistent with last week’s decision of the District Court for Minnesota;
  • The New Rule is “arbitrary, capricious, and an abuse of discretion,” because the in hundreds of pages of rulemaking documentation the DOL never explains why it chose to abandon its longstanding interpretation of the “Advice Exemption” now;
  • The New Rule’s reporting requirements unreasonably conflict with state rules governing the practice of law, and violate the attorney-client privilege;
  • The New Rule “violates free speech and association rights protected by the First Amendment”;
  • The New Rule is unconstitutionally vague in violation of the due process clause of the Fifth Amendment”;
  • The New Rule violates the Regulatory Flexibility Act as DOL likely understates its annual economic impact by billions of dollars according to former DOL Chief Economist, Diana Furchtgott-Roth.

The court further ruled that the New Rule will cause irreparable harm to the Plaintiffs by “[r]educe[ing] access to full, complete, un-conflicted legal advice and representation,” and “burden[ing] and chill[ing] First Amendment rights…..”  On balance, the court held the DOL will suffer no harm from the “delay[ed] implementation of an invalid rule.”  Accordingly, the court granted the injunction:

The United States of America, its departments, agencies, officers, agents and employees, including Thomas E. Perez, Secretary of the United States Department of Labor, and Michael J. Hayes, Director of the Office of Labor-Management Standards, are hereby enjoined on a national basis from implementing any and all aspects of the United States Department of Labor’s Persuader Advice Exemption Rule (“Advice Exemption Interpretation”), as published in 81 Fed. Reg. 15,924, et seq….. The scope of this injunction is nationwide.

Insofar as the Minnesota court decision was far narrower, and rejected many of the arguments adopted by the Texas court here, and with further litigation and appeals likely, it would be prudent for employers to continue to prepare for the possibility of enforcement at some future date. Because the New Rule would apply only to agreements or arrangements entered into after July 1, 2016, employers should consider entering into agreements for arguably covered services prior to that time. If you have questions about such an agreement or for further information, please contact any member of the McGuireWoods Labor team.

NLRB Finds An Ally: Seventh Circuit Invalidates an Arbitration Agreement’s Class and Collective Action Waiver

Posted in Federal Court Litigation, NLRA, NLRB

On May 26, 2016, the Seventh Circuit issued its decision in Lewis v. Epic Systems Corporation, Case No. 15-2997, holding that an arbitration agreement providing “that covered claims will be arbitrated only on an individual basis” and that employees “waive the right to participate in or receive money or any other relief from any class, collective, or representative proceeding” impinges on employees’ Section 7 rights. The Seventh Circuit’s decision creates a split with the Fifth Circuit, which has repeatedly held that class and collective action waivers in arbitration agreements do not violate the National Labor Relations Act.

Since its decision in D.R. Horton in 2012, the Board has held that class and collective action waivers violate Section 8(a)(1) because the Act protects the right of employees to improve their working conditions through administrative and judicial forums. According to the Board, an “individual who files a class or collective action regarding wages, hours or working conditions, whether in court or before an arbitrator, seeks to initiate or induce group action and is engaged in conduct protected by Section 7 … central to the [NLRA’s] purposes.” As such, in the Board’s opinion, by requiring employees to refrain from collective or class claims, waivers of those claims infringe the substantive rights protected by Section 7.

The Fifth Circuit reversed the Board’s decision in D.R. Horton, holding that an employer commits no unfair labor practice by requiring employees to relinquish their right to pursue class or collective claims in all forums by signing arbitration agreements. Just this past fall, the Fifth Circuit again reversed a Board decision finding that an employer committed an unfair labor practice by requiring employees to waive collective and class claims in Murphy Oil USA, Inc. v. NLRB.

The Seventh Circuit, however, held that the employer’s agreement “runs straight into the teeth of Section 7,” and “[c]ontracts that stipulate away employees’ Section 7 rights or otherwise require actions unlawful under the NLRA are unenforceable.” In rejecting the employer’s argument that the Federal Arbitration Act trumps the NLRA (and thus disagreeing with the Fifth Circuit), the Seventh Circuit found that:

there is no conflict between the NLRA and the FAA, let alone an irreconcilable one. As a general matter, there is “no doubt that illegal promises will not be enforced in cases controlled by the federal law.”… The FAA incorporates that principle through its savings clause; it confirms that agreements to arbitrate “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” … Illegality is one of those grounds. … The NLRA prohibits the enforcement of contract provisions like Epic’s, which strip away employees’ rights to engage in “concerted activities.” Because the provision at issue is unlawful under Section 7 of the NLRA, it is illegal, and meets the criteria of the FAA’s savings clause for nonenforcement. Here, the NLRA and FAA work hand in glove.

Recognizing that the decision would create a conflict in the circuits, the Seventh Circuit panel circulated its opinion to all active judges, but “[n]o judge wished to hear the case en banc.”

Petition for certiorari to the Supreme Court is all but certain. Given the current makeup of the Court, resolution of the circuit split will likely hang in the balance of the individual ultimately sworn in as the ninth justice. Please continue to follow our blog, Labor Relations Today, our Twitter feed (@LRToday), and our Flipboard magazine for additional developments and analysis.

Three Lawsuits Take First Shots at New DOL ‘Persuader Rule’

Posted in Department of Labor, Federal Court Litigation, Persuader Rules

The Department of Labor’s final rule regarding the advice exemption to the “persuader rule” in the Labor-Management Reporting Disclosure Act of 1959 (LMRDA) is currently facing three lawsuits filed by various law firms, business groups, and associations. The DOL’s new Rule modifies the “advice exemption” by revising the instructions to forms filed by employers (Form LM-10) and labor relations consultants (Form LM-20) to report persuader agreements and arrangements. According to those new instructions, the advice exemption is significantly narrowed in an attempt to increase the number of disclosures required to be filed by employers and their labor relations consultants and law firms. The three lawsuits assert similar claims in three different jurisdictions.

The first lawsuit was filed on March 30, 2015, one week after the Rule was issued, in the Eastern District of Arkansas by the National Association of Manufacturers, other industry groups, and a law firm.  The lawsuit asserts that the Rule:

  • “infringes on the right of those who seek to give labor relations advice to employers, including the Plaintiff associations, attorneys, and other third party consultants…to render such advice without fear of criminal penalties for failing to file the reports newly required by the Rule”;
  • violates the plaintiffs’ First Amendment rights of Freedom of Speech and Freedom of Association; and
  • infringes on the confidentiality of the plaintiffs’ attorney-client communications and impermissibly invades the attorney-client relationship.

The second lawsuit, filed by a group of labor and employment law firms and an association of management-side labor and employment law firms, was filed on March 31, 2015, in the District of Minnesota. The Minnesota lawsuit, raising similar claims, asserts that the Rule “is an impermissible viewpoint-based regulation of speech” as it “singles out for regulation communications that are ‘anti-union.'”

The National Association of Home Builders and the National Federation of Independent Business (NFIB) filed the third challenge in the Northern District of Texas. In the Texas lawsuit the plaintiffs assert:

[The new rule] is without statutory authority, is in direct conflcit with specific existing statutory provisions, is contrary to Constitutional provisions, and usurps, without legal authority, the right of States to regulate the attorney-client relationship. It will require practicing attorneys to either violate DOL’s new federal “interpretation” of federal law or state ethics rules on disclosure of attorney-client information. DOL’s new rule illegally interferes with the right of Plaintiff’s employer-members to obtain confidential legal advice and impedes their right to communicate with employees about unions and workplace issues.

All lawsuits seek to enjoin the Rule pending a final decision on the merits and an order vacating the challenged rule.

Please continue to follow our blog, Labor Relations Today, our Twitter feed (@LRToday), and our Flipboard magazine for additional developments and analysis.

DOL Issues Final Persuader Rule Significantly Narrowing the Advice Exemption

Posted in Department of Labor, Persuader Rules

Today the Department of Labor issued its final rule for publication tomorrow, March 24, 2016, addressing the “advice exemption” to the so-called “persuader rule” in Labor-Management Reporting Disclosure Act of 1959 (LMRDA). Almost five years after it published the proposed rule, the DOL announced that it was adopting “the proposed rule, with modifications, [providing] increased transparency to workers without imposing any restraints on the content, timing, or method by which an employer chooses to make known to its employees its positions on matters relating to union representation or collective bargaining.” The final rule becomes effective 30 days after publication, and applies “to arrangements and agreements as well as payments (including reimbursed expenses) made on or after July 1, 2016.” Moreover, according to the DOL, the “persuader rule” applies to labor relations governed by both the National Labor Relations Act and the Railway Labor Act.

In the Final Rule, the DOL asserts that:

section 203(c) (known as the “advice exemption”) does not shield employers and their consultants from reporting agreements in which the consultant has no face-to-face contact with employees but nonetheless engages in activities behind the scenes (known as indirect persuader activities) where an object is to persuade employees concerning their rights to organize and bargain collectively.

Justifying the Final Rule’s interpretation of the “advice exemption,” the DOL claims that:

it is important for employees to know that if the employer claims that employees are family — a relationship will be impaired, if not destroyed, by the intrusion of a third party into family matters — it has brought a third party, the consultant, into the fold to achieve its goals. Similarly, with knowledge that its employer has hired a consultant, at substantial expense, to persuade them to oppose union representation or the union’s position on an economic issue, employees may weigh differently a claim that the employer has no money to deal with a union at the bargaining table.

The rule modifies the “advice exemption” by revising the instructions to forms filed by employers (Form LM-10) and labor relations consultants (Form LM-20) to report persuader agreements and arrangements. According to those instructions, reports must now be filed if the labor relations consultant undertakes activities that fall within the following categories:

  1. A consultant engages in direct contact or communication with any employee, with an object to persuade such employee; or
  2. A consultant who has no direct contact with employees undertakes one or more of the following activities with an object to persuade employees:
    • Planning, Directing, or Coordinating Supervisors or Managers.  This includes both meetings and other less structured interactions with employees. Examples include the consultant planning, directing or coordinating which employees they meet; where they meet; when they meet; for how long they meet; the topics discussed and the manner in which they are presented; the information gathered from the employees and how they should gather it; debriefing with the supervisor to orchestrate the next steps in the campaign; and identifying materials to disseminate to employees.
    • The Provision of Persuader Materials. This covers the providing of materials or communications to the employer, in oral, written, or electronic form, for dissemination or distribution to employees. However, a consultant’s revision of employer-created materials, including edits, additions, and translations, if an “object” of the revisions is to ensure legality as opposed to persuasion, does not trigger reporting. On the other hand, if the revisions are intended to increase persuasiveness of the material, then the reporting obligation is triggered. Where a consultant merely provides an employer with “off-the-shelf” material selected by the employer from a library or other collection of pre-existing materials prepared by the consultant for all employer clients, then no reporting is required as long as the consultant does not play an active role in selecting the materials for its client’s employees based on the specific circumstances faced by the employer-client.
    • Conducting a Seminar for Supervisors or Other Employer Representatives.  Seminar agreements must be reported when the consultant develops or assists the attending employers in developing anti-union tactics and strategies for use by the employer’s supervisors or other representatives. A consultant who merely solicits business by recommending that the employer hire the contractor to engage in persuasive activities does not trigger reporting. In no case is the employer required to file a Form LM-10 for attendance at a multiple-employer union avoidance seminar.
    • Developing or Implementing Personnel Policies or Actions. According to the DOL, reporting is only required if the consultant develops or implements personnel policies, practices, or actions for the employer that have as an object to, directly or indirectly, persuade employees (e.g., the identification of specific employees for disciplinary action, or reward, or other targeting, based on their involvement with a union representation campaign or perceived support for the union, or implementation of personnel policies or practices during a union organizing campaign). For example, if the consultant, in response to employee statements about the need for a union to protect against firings, develops a policy under which employees may arbitrate grievances, reporting would be required. However, if the grievance process was set up in response to a request by employees — without any history of a desire by them for union representation — or as a policy developed as part of a company’s startup of operations, without any indication in the agreement or accompanying communications that the policy was established to avoid union representation of the employer’s workforce, no reporting would be required.

The final rule, however, provides that:

no reporting is required by reason of a consultant merely giving “advice” to the employer, such as, for example, when a consultant offers guidance on employer personnel policies and best practices, conducts a vulnerability assessment for an employer, conducts a survey of employees (other than a push survey, i.e., one designed to influence participants and thus undertaken with an object to persuade), counsels employer representatives on what they may lawfully say to employees, conducts a seminar without developing or assisting the employer in developing anti-union tactics or strategies, or makes a sales pitch to undertake persuader activities. Reporting is also not required for merely representing an employer in court or during collective bargaining, or otherwise providing legal services to an employer.

In addition, the DOL eliminated the term “protected concerted activities” from the definition of “object to persuade employees” provided in the proposed rule. Instead, reporting is required only for agreements in which the consultant engages in activities with an object to persuade employees concerning representational and collective bargaining activities, but not “other protected concerted activities.”

Trade associations are given somewhat different treatment under the Final Rule. As a general rule, trade associations will only be required to report in two situations: 1) where the trade association’s employees serve as presenters in union avoidance seminars or 2) where they undertake persuader activities for a particular employer or employers (other than by providing off-the-shelf materials to employer-members).

In response to commenters’ assertions that the proposed rule violates the attorney-client privilege, the DOL repeatedly asserted:

None of the information required to be reported under the revised interpretation is protected by the attorney-client privilege. To the extent the agreement provides confidential details about services other than reportable persuader/information-supplying activities, the principles of attorney-client privilege would apply and such information is not reportable absent consent of the client.

Specifically, the DOL explained that as a general rule information such as the fact of legal consultation, clients’ identities, attorneys’ fees, and the scope and nature of the employment are not deemed privileged. Moreover, the DOL asserts that section 204 of the LMRDA, as a federal law, controls over any conflicting state ethics rules prohibiting the disclosure of confidential client information such as the identity of the client, the fact of representation, and the fees paid as part of that representation.

The DOL, however, did not address the impact that the Final Rule will have on consultants’ reporting requirements in Form LM-21, Receipts and Disbursements Report. Annual Form LM-21 requires the reporting and public disclosure of all clients and fees on account of any labor relations advice or services, even if unrelated to persuader activityIn response to comments concerned about the proposed rule’s impact on Form LM-21, such as the scope and detail of reporting about service provided to other employer clients, the DOL merely stated that Form LM-21 “is not the subject of this rulemaking.” Indeed, the DOL plans on publishing a proposed rule on Form LM-21 in September 2016, in which it will “propose mandatory electronic filing for Form LM-21 filers, and it will review the layout of the Form LM-21 and its instructions, including the detail required to be reported.”

According to the DOL, the average cost of compliance will be $151.14 per Form LM-20 for labor consultants, and is $226.70 per Form LM-10 for employers.

As there have been many critics to the proposed rule, including the American Bar Association and the Association of Corporate Counsel, it is almost a given that there will be legal challenges to the Final Rule. Also, some organizations have already issued press releases asserting that they will work with lawmakers to reverse the Final Rule. Accordingly, please follow our blog, Labor Relations Today, our Twitter feed (@LRToday), and our Flipboard magazine for additional developments and analysis.

NLRB Caught with Egg on its Face: ALJ Finds Agency Violated Federal Labor Law By Failing to Negotiate with its Union

Posted in NLRB, NLRB Administration, NLRB Misc.

Last month a Federal Labor Relations Authority administrative law judge found that the National Labor Relations Board, the agency whose duties include determining whether private employers bargain in good faith, violated its duty to bargain with its union under the Federal Service Labor-Management Relations Statute and the Rules and Regulations of the Federal Labor Relations Authority.

The case arose when the union, representing employees working for the NLRB’s General Counsel and the Chairman and Members (the Board) at the headquarters building, requested to bargain over issues related to the relocation of the NLRB’s headquarters. The NLRB and the union ultimately reached a ground rules agreement providing for two days of bargaining. The parties then met for two days, but the Union requested to continue bargaining the following week. The NLRB denied the request, insisting that the ground rules limited bargaining to two days.

The issue before the ALJ was whether, by participating in two days of negotiations called for in the ground rules, the NLRB fulfilled its statutory duty to bargain concerning the relocation. In its defense, the NLRB asserted that the union waived its right to future bargaining when it agreed to the ground rules and that the parties had reached impasse when the second day of bargaining ended.

The ALJ disagreed with the NLRB and chided it for its failure to bargain with the union:

Because the ground rules agreement cannot reasonably be interpreted as limiting the parties’ bargaining period to two days, I conclude that the Union did not waive its right to bargain until either an agreement was reached or the parties had come to an impasse. Additionally, the evidence conclusively demonstrates that the parties had not reached impasse. The parties had only begun to discuss the many issues on the table, neither side had submitted a full range of counterproposals, and the Agency inexplicably refused even to attempt mediation. These factors establish that there was a strong potential for further and productive bargaining, if only the Agency had the patience to persist beyond its arbitrary deadline. Therefore, the Agency violated its duty to bargain and deprived the Union of a proper opportunity to negotiate the impact and implementation of the move to a new headquarters.

The NLRB’s bargaining team included, among others, Andrew Krafts, Deputy Chief General Counsel to Member Nancy Schiffer, and Rachel Lennie, Richard Griffin’s Assistant General Counsel.

The Battle Over the Status of Uber and Lyft Drivers Continues

Posted in Federal Court Litigation, NLRA, State/Local Issues, Unfair Labor Practices

Uber and Lyft have seen a number of attacks challenging the status of their independently contracted drivers in an effort to force both companies to reclassify and/or treat their drivers as employees. A recent example was a local ordinance enacted in Seattle, Washington, allowing drivers working for ride-hailing companies like Uber and Lyft the right to unionize. Specifically, the ordinance, enacted in December 2015, would allow drivers working for the same company to form a nonprofit organization that would collectively bargain for them.

However, on March 3 the U.S. Chamber of Commerce filed suit in Washington federal court challenging the ordinance. In addition to various challenges under state law, the complaint’s primary challenges under federal law rely upon the Sherman Antitrust Act and the National Labor Relations Act.  The complaint asserts that the ordinance violates and is preempted by the Sherman Antitrust Act as it would allow the independently contracted drivers to form an illegal cartel and engage in illegal horizontal fixing of prices. Federal labor law also preempts the city ordinance, according to the complaint, because:

  • Congress expressly left independent contractors unregulated and excluded from the NLRA’s collective-bargaining requirements; and
  • the NLRA preempts state resolution of issues committed to the exclusive jurisdiction of the National Labor Relations Board.

The complaint specifically notes that the “NLRB has not definitely resolved the employee status of drivers who receive ride requests from software applications and, indeed, as to certain drivers, that issue is currently pending before the NLRB.”

The lawsuit presumably references five different NLRB cases where the Board, as part of its investigation of alleged unfair labor practices by Uber, must determine whether Uber’s drivers are employees or independent contractors. As part of its investigation of those cases, the NLRB issued two subpoenas to Uber requiring the production of sworn answers to 107 written interrogatories and 34 requests seeking production of documents “regarding…the threshold issue of whether the drivers at issue are employees under Section 2(3) of the Act.”

Uber has produced some documents responsive to the subpoenas, but, according to the NLRB, Uber “has not provided the majority of the documents and information requested in the Subpoenas. It continues to maintain that the Board is not entitled to the answers and documents it requested in its Subpoenas, and it has limited its scant production of evidence to the two Charging parties that filed charges in Region 20.” As a result, the NLRB filed a lawsuit in a California federal court to enforce the subpoenas. While the federal court will not decide the “threshold issue,” its decision will determine what information the NLRB has to evaluate the independent contractor issue. If the NLRB ultimately determines that Uber’s drivers should be classified as employees and not independent contractors, it will issue a complaint and have a hearing before an administrative law judge to decide that issue.

Please continue to follow the blog, our Twitter (@LRToday) feed, and our Flipboard magazine for developments on this petition.

NLRB Invites Briefs on Whether It Should Continue to Permit Administrative Law Judges to Approve Unilateral Settlement by “Consent Order”

Posted in Amici Briefs, NLRB

On February 19, 2016, the National Labor Relations Board (the “Board”) invited briefs from interested parties to consider whether the Board should continue to permit Administrative Law Judges to issue “consent orders,” subject to review by the Board, incorporating the terms proposed by the respondent to settle an unfair labor practice case, to which no other party has agreed, over the objection of the Board’s General Counsel.

The Board consistently has maintained a policy to encourage settlements which effectuate the purposes of the National Labor Relations Act.  Consistent with the policy, an Administrative Law Judge is authorized to accept a proposed settlement even if the General Counsel and the charging party oppose such action.  Thus, a respondent may propose a unilateral agreement, which the Administrative Law Judge may approve, based on the totality of the circumstances surrounding the agreement, in the form of a “consent order.”

In United States Postal Service, the Administrative Law Judge approved a unilateral settlement agreement by “consent order” over the objection of the charging party and the Board’s general counsel.  In seeking review, the General Counsel averred that the respondent is a recidivist that has committed hundreds of labor law violations across its many facilities.  According to the General Counsel, the “consent order,” which restricted the settlement to one facility and included a six-month sunset clause, is contrary to the Board’s goals of preventing recidivism and monitoring compliance with decisions.

The Board’s invitation to file briefs asks two questions:

  1. May the Board, consistent with Section 3(d) of the National Labor Relations Act, continue to permit administrative law judges to issue a “consent order,” subject to review by the Board, incorporating the terms proposed by a respondent to settle an unfair labor practice case, to which no other party has agreed, over the objection of the General Counsel?
  2. If Section 3(d) does allow the Board’s current practice, should the Board alter or discontinue the practice as a matter of policy?

Briefs are due by March 18, 2016, with responsive filings by April 1, 2016.

NLRB Invites Briefs on Whether Revise Its Treatment of Search-for-Work Expenses as Part of the Make-Whole Remedy

Posted in Amici Briefs, NLRB, Remedies

On February 19, 2016, the National Labor Relations Board (the “Board”) invited briefs from interested parties in a case considering whether the Board should revise its treatment of search-for-work expenses and interim employment expenses as part of the make-whole remedy for unlawfully discharged employees.

For decades, the Board has treated an unlawfully discharged employee’s reasonable search-for-work and interim employment expenses as an offset to reduce the amount of interim earnings subtracted in calculating gross backpay.  Under current Board law, a discharged employee who incurred expenses while searching for interim work, but was ultimately unsuccessful in finding employment, is not entitled to any reimbursement for expenses.  Likewise, a discharged employee who obtains interim employment but earns less interim earnings than his or her search-for-work expenses also is not entitled to reimbursement. In King Soopers, Inc. (27-CA-129598), the Board’s General Counsel contended that current Board law is inequitable and contrary to the National Labor Relations Act’s remedial principles.  According to the General Counsel, a discharged employee should be entitled to an award of search-for-work expenses as part of the make-whole remedy regardless of whether the discharged employee received interim earnings.

The Board’s invitation to file briefs asks three questions:

  1. Should the Board adopt the change requested by the General Counsel?
  2. What considerations warrant retaining the Board’s traditional treatment of search-for-work and interim employment expenses?
  3. What considerations warrant making the requested change?

Briefs are due by March 18, 2016, with responsive filings by April 1, 2016.

Electrical Subcontractor Cannot Catch a Break from the Eighth Circuit

Posted in Duty to Bargain, Federal Court Litigation, NLRA, NLRB, Unfair Labor Practices

On February 9, 2016, the Eighth Circuit Court of Appeals held that National Labor Relations Board (the “Board”) properly concluded that an electrical subcontractor violated the National Labor Relations Act when it unilaterally changed its employee break policy without affording the employees’ union an opportunity to bargain over the change. Parsons Electric, LLC v. NLRB, Nos. 14-3239 and 14-3662 (8th Cir. Feb. 9, 2016).  This decision is a reminder for employers to consider whether a change in the terms and conditions of employment is sufficiently significant to require bargaining with a union before implementation.

Although the collective bargaining agreement between the employer and the union was silent on employee breaks, since at least 2005, the employer maintained a written employee break policy providing for a 15-minute break in the morning and a 15-minute break in the afternoon, subject to jobsite managerial discretion. In 2012, however, the employer amended its employee break by eliminating the default 15-minute breaks and stating that “[the employer] may establish specific break policies as part of the jobsite expectations.”  After a number of employees complained to the union that the employer ceased permitting afternoon breaks and early departures in lieu of breaks, the union filed an unfair labor practice charge.

Giving considerable deference to the Board, the Eighth Circuit concluded that the policy change was “material, substantial, and significant,” thus requiring the employer to bargain with the union. As the court explained:

To be sure, [the employer] retained discretion to override the two-break standard if the particular ‘jobsite expectations’ so required, but under the 2005 Break Policy, that discretion would be exercised as an exception to the default rule. The 2012 Break Policy, by contrast, eliminated the default rule with respect to employee breaks and instead granted [the employer] unfettered discretion to determine whether employee breaks would be permitted at all, and, if they were permitted, when they would occur and how long they would last.

In other words, while the 2005 break policy provided employees with a “specific, concrete standard,” the 2012 break policy left the determination of breaks entirely to management.

The Eighth Circuit also rejected the employer’s argument that the 2012 break policy was nothing more than a clarification of the company’s standard practice under the former policy. Again deferring to the Board’s findings, the Eight Circuit noted that “the Board credited evidence and testimony that, prior to 2012, the typical practice at [the employer’s] jobsites was to follow the default standard set forth in the 2005 Break Policy.”  In the end, the court denied the employer’s petition for review and granted the Board’s petition for enforcement of its order.



West Virginia Inches Closer to Enacting Right-To-Work Law

Posted in Legislation, State/Local Issues

On Thursday, February 4, the West Virginia House of Delegates voted 54-46 to pass the “Establishing West Virginia Workplace Freedom Act,” a measure that would allow employees to opt-out of paying union dues. The Senate, which previously passed the bill 17-16 along party lines, must approve the bill again as it was amended by the House. Governor Earl Ray Tomblin has committed to vetoing the bill, but only a simply majority in the House and Senate is needed to override any veto. If enacted, West Virginia will become the 26th state to have a right-to-work law.

Additional coverage: