Labor Relations Today

Labor Relations Today

The Road Ahead: Top 10 Labor Issues to Watch in the Back Half of 2015

Posted in Amici Briefs, Department of Labor, Executive Orders, Expedited Elections, Federal Court Litigation, Government Contracting, Government Contracts, House of Representatives, Legislation, Micro Units, NLRA, NLRB, NLRB Decisions, NLRB Rule-Making, Persuader Rules, Representation Elections, Senate, State/Local Issues
road ahead

1.  Will the Courts Uphold the New Expedited Election Rules?

The National Labor Relation Board’s new expedited election rules took effect on April 14, 2015, but not before two lawsuits could be filed seeking to invalidate them in January 2015. The first lawsuit was filed by business groups, including the U.S. Chamber of Commerce, in the U.S. District Court for the District of Columbia. The second, by the National Federation of Independent Business (NFIB) Texas, Associated Builders and Contractors (ABC) of Texas and the Central Texas Chapter of ABC, was filed in the U.S. District Court for the Western District of Texas. The lawsuits assert that the NLRB provided no adequate justification for overruling decades of Board and judicial precedent balancing employer, employee, and union rights in the election process.

On June 1, 2015, the NLRB notched an important victory as the Texas court dismissed the lawsuit by ABC and NFIB. In dismissing the complaint, Federal District Judge Robert L. Pitman emphasized the great deference that must be accorded to government agencies, as well as the “significant deference to the Board and the Regional Directors in applying the very provisions Plaintiffs challenge.”

Plaintiffs suggest the deference is illusory as the standards under which the Regional Directors may exercise that discretion are “extraordinary” and thus effectively unavailable. However, as discussed above, Plaintiffs are bringing a facial challenge to the New Rule. As a result, they are required to establish there is “no set of circumstances exists” under which the New Rule would be valid.

Judge Pitman also explained that since employers have “almost unfettered ability to rapidly disseminate their election position after an election petition is filed,” the rule could not be found to violate employer speech rights, either. On June 2, 2015, ABC and NFIB appealed Judge Pitman’s decision to the Fifth Circuit Court of Appeals where it remains pending. Meanwhile, no ruling has been issued yet in the U.S. Chamber-led lawsuit pending in Washington DC, but a decision should be issued before the end of the year.

2.  Will the Board Adopt a New Joint Employer Standard?

In May 2014 the Board invited interested parties to submit amicus briefs in Browning-Ferris Industries, a case involving the routine application of the Board’s decades-old standard for determining whether two or more businesses may be found to be “joint employers.” Under the existing standard, two or more employers must “share or co-determine matters governing essential terms and conditions of employment.” Predictably, unions and their allies submitted briefs proposing that a much broader standard be adopted, and the NLRB’s General Counsel’s brief argued that the Board should abandon its current joint employer standard in favor of an amorphous “totality of the circumstances” test.

Under that standard, the Board finds joint employer status where, under the totality of the circumstances, including the way the separate entities have structured their commercial relationship, the putative joint employer wields sufficient influence over the working conditions of the other entity’s employees such that meaningful bargaining could not occur in its absence. This approach makes no distinction between direct, indirect and potential control over working conditions and results in a joint employer finding where “industrial realities” make an entity essential for meaningful bargaining.

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NLRB Flip Flops, Finds Employer Legally Terminated Employee for Dishonesty

Posted in NLRB Decisions, Unfair Labor Practices

On remand because of the Supreme Court’s ruling in NLRB v. Noel Canning, 134 S.Ct. 2550 (2014), the National Labor Relations Board reversed course in Fresenius USA Manufacturing, Inc., 362 NLRB No. 130 (June 24, 2015), and found that an employer lawfully terminated an employee for dishonesty during an investigation of employee misconduct. The 2015 decision is a stark contrast to the one delivered by the Board panel in 2012 that included Members Griffin and Block, whose recess appointments were determined to be invalid in Noel Canning.

In 2012, the Board held that the employer unlawfully terminated the employee for anonymously writing vulgar statements on union newsletters because the employee was engaged in protected union activity. Specifically, during a decertification campaign, the employee anonymously wrote the following statements on three union newsletters: “Dear P—ies, Please Read!”; “Hey cat food lovers, how’s your income doing?”; and “Warehouse workers, RIP.” The Board concluded that not only did the employee’s vulgar language not cause him to lose protection of the Act, but that the employee had a right under the National Labor Relations Act to be dishonest during the employer’s investigation in response to employee complaints about the comments:

[The employer’s] questioning of [the employee] put him in the position of having to reveal his protected activity, which Board precedent holds an employee may not be required to do where, as here, the inquiry is unrelated to the employee’s job performance or the employer’s ability to operate its business. … As a result, although [the employer] had a legitimate interest in questioning [the employee] and lawfully did so, [the employee] had a Sec. 7 right not to respond truthfully. We therefore find that [the employee’s] refusal to admit responsibility for the comments cannot serve as a lawful basis for imposing discipline.

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Second Circuit: Transgender Discrimination Allegations State Duty of Fair Representation Claim Against Union

Posted in Federal Court Litigation, NLRA, Unions

The Court of Appeals for the Second Circuit recently reinstated a transgender construction worker’s duty of fair representation claims against an ironworkers union and two of its business agents.  In Fowlkes v. Ironworkers Local 40, et al., No. 12-336-cv (2d Cir. June 19, 2015), the appellate court held that the lower court was wrong to have dismissed the case on jurisdictional grounds when the pro se plaintiff failed to exhaust Title VII’s administrative remedies, and that, in any event, the court should have read the complaint liberally to include a DFR claim against the union.

Plaintiff was a journeyman ironworker who was born a woman, but who now self-identifies as male. The complaint alleged that the union hiring hall passed plaintiff over repeatedly for job referrals because of a prior lawsuit and because of a refusal to act feminine.  The lower court dismissed the case because, notwithstanding opportunities to conform the pleadings, plaintiff failed to plead the receipt of a “right to sue” notice from an appropriate administrative agency.  Insofar as the complaint focused primarily on Title VII claims, the court ruled that dismissal of those claims denied the federal court of jurisdiction over the case.

On appeal, the appellate court ruled that the lower court prematurely dismissed the Title VII claims, but held separately:

Although Fowlkes’s amended pro se complaint did not flag the NLRA, we nonetheless are persuaded, with the benefit of a counseled brief on Fowlkes’s behalf, that Fowlkes has stated a plausible claim for a breach of the duty of fair representation. In his amended complaint, Fowlkes alleges that the Local refused to refer him for work for which he was qualified because of his transgender status and in retaliation for instituting legal proceedings against the Local. Allegations that a union abused its hiring hall procedures to undermine a member’s employment opportunities warrant particularly close scrutiny when a union wields special power as the administrator of a hiring hall. Breininger, 493 U.S. at 89; see also Gilbert v. Country Music Ass’n, Inc., 432 F. App’x 516, 521 (6th Cir. 2011). Assuming, as we must, that Fowlkes’s allegations are true, the Local’s conduct was at the very least arbitrary, if not discriminatory or indicative of bad faith.

The issue of whether employment discrimination on the basis of transgender status is actionable under Title VII is far from settled.  In 2011 – consistent with a trend indicative of the current administration’s approach to employment law — the EEOC held for the first time that claims of transgender discrimination are cognizable under Title VII of the Civil Rights Act of 1964.  This finding, in Macy v. Holder, –[CITE]–, is, of course, contradicted by the repeated efforts of Congressional Democrats throughout the last decade, to pass the Employment Non-Discrimination Act (ENDA) which would expressly add “actual or perceived sexual orientation or gender identity” to the list of characteristics protected by Title VII.

Regardless, union discrimination based specifically on characteristics protected by Title VII or some other statute is not a predicate to a DFR claim.  As is explained in the Fowlkes ruling, the union behavior need only be “arbitrary, discriminatory or in bad faith.”  While not making any factual conclusions in this case, the Court of Appeals, giving the pro se complaint a generous reading, has concluded that, if proven, the facts set forth by plaintiff could support a verdict against the union.


House, Senate Propose NLRB Budget Cuts and Policy Limitations

Posted in House of Representatives, NLRA, NLRB, NLRB Rule-Making, Senate

The House and Senate appropriations committees both advanced bills on June 17 and June 23, respectively, seeking to slash the National Labor Relations Board’s budget. The House’s bill seeks a 27 percent reduction, taking the NLRB’s current budget of $274 million down to $200 million. Meanwhile, the Senate bill proposes a ten percent reduction of $27 million. Both bills also propose significant cuts to the Department of Labor.

The bills, however, do not just propose budget cuts as they also include riders aimed at stemming the NLRB’s current agenda. For example, the bills include provisions that would prohibit the NLRB from using the funds to enforce the new “quickie” election rules and to create a new “joint employer” standard under the National Labor Relations Act. In a statement released by the House’s Committee on Appropriations, it described the scope and purpose of the riders aimed at the NLRB:

the legislation includes several policy provisions to stop the NLRB’s harmful anti-business regulations that would impose additional and excessive costs on American businesses, increase job loss, and further hinder economic growth. Some of these provisions include: a prohibition on use of electronic voting in union elections; a prohibition on implementing new regulations on representation-case procedures; a prohibition on issuing new joint-employer standards; and a prohibition on exercising jurisdiction over Indian tribes.

The Senate Committee on Appropriations similarly issued a statement noting that the Committee “is very concerned about the Board’s regulatory and policy overreach and therefore has taken steps to right-size the agency and reprioritize funding.”

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NLRB Invalidates Conflict of Interest Rule

Posted in NLRA, NLRB Decisions, Unfair Labor Practices

The National Labor Relations found an employer’s conflict of interest rule invalid on its face in The Sheraton Anchorage, 362 NLRB No. 123 (June 18, 2015). In its employee handbook, the employer maintained a rule providing: “I understand that conflict of interest with the hotel or company is not permitted.” The rule was immediately adjacent to a rule stating: “I understand that it is against company policy to have an economic, social or family relationship with someone that I supervise or who supervises me and I agree to report such relationships.” In finding the conflict of interest rule facially invalid, the Board majority, consisting of Chairman Pearce and Member Hiozawa, concluded:

that employees would reasonably interpret the rule prohibiting them from having a “conflict of interest” with the Respondent as encompassing activities protected by the Act. Particularly when viewed in the context of the Respondent’s other unlawfully overbroad rules, employees would reasonably fear that the rule prohibits any conduct the Respondent may consider to be detrimental to its image or reputation or to present a “conflict” with its interests, such as informational picketing, strikes, or other economic pressure.

Member Miscimarra dissented. Although finding that the employer unlawfully applied the conflict of interest rule to discipline nine employees for presenting a boycott, Member Miscimarra did not find the rule unlawful on its face, especially when the rule is given context by an adjacent rule:

Employers have a legitimate interest in preventing employees from maintaining a conflict of interest, whether they compete directly against the employer, exploit sensitive employer information for personal gain, or have a fiduciary interest that runs counter to the employer’s enterprise. Therefore, even if one applies Lutheran Heritage Village-Livonia, 343 NLRB 646, 646 (2004), I do not agree with my colleagues’ conclusion that employees would reasonably understand the conflict-of-interest rule as one that extends to employees’ efforts to unionize or improve their terms or conditions of employment.

Student-Athletes Continue Push for “Employee” Status

Posted in Federal Court Litigation, NLRA, NLRB, Representation Elections

While student-athletes continue to prosecute their antitrust challenges to the NCAA, student athletes continue to fight a second front against the NCAA and its member institutions with legal challenges asserting that student athletes are employees and are thus entitled to all the benefits and protections of such status under federal and state laws.

In October 2014, a former collegiate soccer player filed suit against the NCAA in Sackos v. NCAA et al., asserting that student athletes are temporary employees who must be paid minimum wage under the Fair Labor Standards Act (“FLSA”). The lawsuit, now titled Anderson et al. v. NCAA et al., followed on the heels of a National Labor Relations Board Regional Director’s March 26, 2014 decision in Northwestern University, NLRB Case No. 13-RC-121359, finding that Northwestern’s football players are “employees” under the National Labor Relations Act. As we noted in March 2014, the effects of the Northwestern decision, which is still pending before the Board, go beyond unionizing as it could lend support to the very argument asserted in Anderson: that student athletes of both public and private universities are employees under the FLSA and are thus entitled to back wages.

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House Subcommittee Holds Hearing on Tribal Labor Sovereignty Act to Exclude Indian Government Employers From NLRA

Posted in House of Representatives, Legislation, NLRA, NLRB, State/Local Issues

fd914681-8b30-4142-8f66-bb91dc892318A subcommittee of the House Committee on Education and the Workforce held a hearing on Tuesday, June 16, 2015 on H.R. 511, “The Tribal Labor Sovereignty Act of 2015.”  The bill, which has a counterpart, S. 248, in the Senate, would amend the National Labor Relations Act to expressly exclude tribal employers from the Act’s definition of “employer.”  Specifically, the bill would add “any enterprise or institution owned and operated by an Indian tribe and located on its Indian lands” to the definition’s list of exclusions set forth in Section 2(2) of the Act as follows:

…the United States or any wholly owned Government corporation, or any Federal Reserve Bank, or any State or political subdivision thereof…

For decades, the National Labor Relations Act was generally understood to exclude sovereign tribal government employers, just as it expressly excludes the various other sovereign government employers listed above. In the San Manuel Indian Bingo & Casino, 341 NLRB 1055 (2004), however, the NLRB changed that, casually casting aside claims of tribal sovereignty to assert federal jurisdiction over the tribal government operating the gaming enterprise in that case.  The bill would expressly reaffirm the exclusion which had been law until then.

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FAR Council and Department of Labor Propose Regulations and Guidance to Implement “Fair Pay and Safe Workplaces” Executive Order; Impose Significant New Labor Law Obligations on Federal Contractors

Posted in Department of Labor, Executive Orders, Government Contracts, White House

On May 28, 2015, the President’s administration published proposed amendments to the Federal Acquisition Regulation, and related Department of Labor guidance to implement the July 31, 2014 “Fair Pay and Safe Workplaces” Executive Order 13673.  The Order and these proposed changes would subject government contractors to a broad new set of record-keeping, reporting and compliance requirements. Failure to fulfill these obligations and exhibit compliance with all applicable federal and state labor laws would expose the contractor to the prospects of disqualification, suspension, or debarment.

Under this proposed regulatory scheme, offerors on contracts or subcontracts estimated to exceed $500,000 must disclose “any administrative merits determination, arbitral award or decision, or civil judgment” against the contractor under the following fourteen enumerated federal statutes and Executive Orders (labor law violations), for the three years preceding the contract bid:

  • the Fair Labor Standards Act (FLSA);
  • the Occupational Safety and Health Act of 1970 (OSHA);
  • the Migrant and Seasonal Agricultural Worker Protection Act (MSPA);
  • the National Labor Relations Act (NLRA);
  • the Davis-Bacon Act;
  • the Service Contract Act;
  • Executive Order 11246 (Equal Employment Opportunity);
  • the Rehabilitation Act of 1973;
  • the Vietnam Era Veterans’ Readjustment Assistance Act of 1972 and the Vietnam EraVeterans’ Readjustment Assistance Act of 1974;
  • the Family and Medical Leave Act (FMLA);
  • Title VII of the Civil Rights Act of 1964 (Title VII);
  • the Americans with Disabilities Act of 1990 (ADA);
  • the Age Discrimination in Employment Act of 1967 (ADEA);
  • Executive Order 13658 (Minimum Wage for Contractors); and
  • any and all “equivalent State laws”.

This information will then be considered when making responsibility determinations during the contract award process. More specifically, the proposed regulations also define new categories of labor law violations —i.e., “serious,” “repeated,” “willful,” and “pervasive” violations. These violations may be considered evidence of “a lack of integrity or business ethics” sufficient to disqualify a contractor from consideration for a contract. Covered contractors and subcontractors would also be required to update all this information every six months during the term of a contract.  Finally, contractors must obtain all this information from any subcontractor and attest to all subcontractors’ fitness under these new standards. The regulations would create a new position — Labor Compliance Advisor — to assist contract officers in the process of evaluating responsibility and in procuring labor compliance agreements from contractors trying to ensure their consideration for contracts.

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NLRB Judge Overturns Arbitrator’s Decision To Fire Racist Employee

Posted in NLRA, NLRB Administration, NLRB Decisions, Quick Hits, Remedies, Unfair Labor Practices, Unions

In a decision that should unsettle employers, a National Labor Relations Board administrative law judge ruled last week that Cooper Tire & Rubber violated the National Labor Relations Act by unlawfully terminating an employee who made racist statements on the picket line.  [Cooper Tire decision]  Even worse, Cooper Tire must offer to rehire the racist employee.

The case arose after Cooper Tire’s collective bargaining agreement with the United Steelworkers (USW) expired in 2011.  The company locked its unionized employees out and began using temporary replacements instead.  Many of those temporary replacements were African American.

In January 2012, several vans full of replacement workers drove past the pickets.  A locked-out Cooper employee, Anthony Runion, yelled several racist statements at the vans as they drove by, including:

  • “Hey, did you bring enough KFC for everyone?” and
  • “I smell fried chicken and watermelon!”

Runion was terminated from employment.  The union grieved his termination, and the arbitrator upheld the Company’s decision under the principles of “just cause” because the statements violated Cooper’s harassment policy.  But the administrative law judge ruled that the harassment policy was of no moment here:

“Runion’s ‘KFC’ and ‘fried chicken and watermelon’ statements most certainly were racist, offensive, and reprehensible, but they were not violent in character, and they did not contain any overt or implied threats to replacement workers or their property,” Judge Randazzo wrote. “The statements were also unaccompanied by any threatening behavior or physical acts of intimidation by Runion towards the replacement workers in the vans.”

The judge further explained that the arbitrator’s ruling gave short-shrift to the protections that the Act grants to picket line conduct.  As such, the arbitrator’s affirmance of the company’s termination of Runion was “clearly repugnant” to the Act.

Cooper must now not only offer to rehire Runion, but must also make him whole for any lost earnings and benefits.

This decision should make employers stand back and take notice.  The Board and its judges have clearly chosen to grant broad protections to even the most vile picket line conduct, so long as that conduct is not accompanied by threats of violence.  Accordingly, employers should tread very carefully when making adverse employment decisions during a strike or a lockout, as an unlawful termination could have serious financial repercussions.

Associated Builders Appeal Quickie Election Decision

Posted in Federal Court Litigation, NLRA, NLRB, NLRB Rule-Making, Quick Hits

In a move that surprised absolutely nobody, business coalitions challenging the National Labor Relations Board’s controversial “quickie election” rules announced that they will appeal this week’s ruling out of Texas finding that the groups failed to prove that the rule violated both the Administrative Procedure Act and the National Labor Relations Act.  [Notice of Appeal]

As discussed in the blogosphere earlier this week, Associated Builders and Contractors of Texas, Inc. and their co-plaintiffs lost their bid to nix the Board’s “quickie election” rules in U.S. District Court.  In a short ruling, Judge Robert L. Pitman explained that the challengers could not show that the new rule, on its face, violates the law.

Plaintiffs contended that the rule violated both the NLRA and the APA in myriad ways.  They argued that the rule was both arbitrary and capricious, and that it abused agency discretion.  The plaintiffs further argued that the rule unlawfully interfered with employer speech, and that it violated their employees’ privacy rights as well.

But unfortunately for the plaintiffs, Judge Pitman determined that they had not established that “no set of circumstances exist[ed]” under which the quickie elections could be lawful.  And the ruling further explained that since employers have “almost unfettered ability to rapidly disseminate their election position after an election petition is filed,” the rule could not be found to violate employer speech rights, either.

Interestingly, Judge Pitman’s ruling could reverberate to a separate challenge filed against the quickie election rules in D.C. District Court.  Those plaintiffs have challenged the Board’s quickie election rules on similar grounds, and in oral argument, Judge Amy Berman Jackson expressed skepticism to the challengers’ arguments.

And since the plaintiffs in the Texas case have appealed, it is clear that the battle over the quickie election rules is far from over.  With challenges going on in multiple Circuits, we may have another Noel Canning style quagmire on our hands that will have to be resolved by the Supreme Court.  Keep watching @LRToday for updates on these cases.