By Jessi L. Ziska*
On February 26, 2020, the National Labor Relations Board (the “NLRB”) issued a final rule governing the determination of joint-employer status under the National Labor Relations Act (“NLRA”). The pro-employer rule provides that a business must possess and exercise “substantial direct and immediate control over one or more essential terms or conditions” of the employment of a separate employer’s employees for the NLRB to classify them as a joint-employer. The final rule makes it less likely that the NLRB will classify a company as joint-employer liable for labor law violations or bargaining obligations involving workers the company engages at arm’s length, such as subcontractors or franchisees.
The NLRB defined key terms in the final rule which provides that “essential terms and conditions of employment” includes “wages, benefits, hours of work, hiring, discharge, discipline, supervisions, and direction.” The NLRB also explained that “substantial direct and immediate control” includes actions that have “a regular or continuous consequential effect” on the core aspects of a worker’s job noting that “sporadic, isolated or de minimis” actions are insufficient to create a joint-employer relationship.
This final rule restores the standard in place prior to the controversial 2015 Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (2015) (“Browning-Ferris”) decision which based joint employer status on potential control of another employer’s employees even where no actual control is exercised. In September 2018, the NLRB published a Notice of Proposed Rulemaking outlining a joint-employer standard mirroring the final rule. This final joint employer rule closes this chapter of the ever-changing joint-employer test odyssey. A more detailed summary of the years-long saga surrounding the joint-employer standard, including the pre-2015 rule, the Browning-Ferris standard, and the move to return to the pre-2015 standard can be found here.
NLRB Chairman John F. Ring stated, “This final rule gives our joint-employer standard the clarity, stability, and predictability that is essential to any successful labor-management relationship and vital to our national economy.” He added, “With the completion of today’s rule, employers will now have certainty in structuring their business relationships, employees will have a better understanding of their employment circumstances, and unions will have clarity regarding with whom they have a collective-bargaining relationship.”
Although the final rule is arguably more favorable for employers than the pre-2015 standard, employers must remain cognizant of the control they exert over subcontractors, independent contractors, etc., and analyze whether it creates an employment relationship with such individuals, giving rise to related liability.
*Jessi L. Ziska practices in all areas of labor and employment law. If you have questions regarding the NLRB’s proposed joint-employer rule, please contact Jessi at jlz@zrlaw.com or 216.696.4441.
Showing posts with label Joint Employer. Show all posts
Showing posts with label Joint Employer. Show all posts
Monday, March 2, 2020
Thursday, February 21, 2019
EMPLOYMENT LAW QUARTERLY | Volume XXI, Issue i
Download PDF
Recently, the National Labor Relations Board (“NLRB”) published a notice of proposed rulemaking on the standard for determining joint-employer status. The proposed rule makes it less likely that a company would be deemed a joint-employer liable for labor law violations involving workers the company engages at arm’s length, such as subcontractors or franchisees. Under the NLRB’s proposed standard, an employer may be deemed a joint-employer of another employer’s employees only if it possesses and exercises “substantial, direct and immediate control” over the essential terms and conditions of the employees’ employment and has done so in a manner that is not “limited and routine.” The proposed rule is intended to avoid forcing companies, who have not exerted control over the terms and conditions of employment of other companies’ employees, to be involved in collective bargaining negotiations or defending against unfair labor practice charges with respect to those employees.
The proposed rule could be even better for employers than the pre-2015 standard because, in listing the criteria for whether a company exercises enough control to be considered a joint-employer, the proposed rule requires substantial “direct and immediate control.” The NLRB maintains that the proposed rule fosters predictability, consistency, and stability in the determination of joint-employer status.
After releasing the proposed rule, the NLRB accepted comments from the public, which it will now consider in formulating its final rule. Regardless of the final rule’s language, employers must remain cognizant of the control they exert over subcontractors, independent contractors, etc., and analyze whether it creates an employment relationship with such individuals, giving rise to related liability.
*Jessi L. Ziska practices in all areas of labor and employment law. If you have questions regarding the NLRB’s proposed joint-employer rule, please contact Jessi at jlz@zrlaw.com or 216.696.4441.
By Lauren M. Drabic*
The Fair Labor Standards Act (“FLSA”) provides wage and overtime protections for full- and part-time workers in both the private and public sectors. In particular, it establishes the federal minimum wage and generally requires covered employers to pay their employees an overtime rate at one and one-half times their regular rate of pay for hours worked over 40 in a workweek. However, the statute exempts certain employees from these minimum wage and overtime protections depending on the nature of the employee’s position, duties, and pay. The statute lists more than a dozen categories of positions that are exempt from the FLSA’s minimum wage and overtime protections. Federal regulations provide further guidance on positions that qualify as exempt.
Some FLSA provisions and related federal regulations are specific and leave little room for interpretation as to whether a certain position is exempt. For example, the FLSA specifically delineates that elementary and secondary school teachers are exempt from one or more of its protections, as are criminal investigators, police officers, firefighters, computer programmers, software engineers, cab drivers, babysitters hired on a casual basis, movie theater employees, and certain employees employed in agriculture. Federal regulations further delineate, by way of example, that doctors, lawyers, architects, and engineers typically are considered exempt employees. The applicability of other exemptions under the FLSA, however, are far from clear, even in light of additional guidance.
For nearly six decades, the Supreme Court held time and again that, when ambiguous, the provisions of the FLSA – including these exemption provisions – should be narrowly construed. In essence, this meant that unless the position at issue explicitly and irrefutably fell within the plain meaning of the FLSA’s exemption provisions – or as the Supreme Court once put it, “plainly and unmistakably [fell] within the terms or the spirit” of those provisions – such a position could not be considered exempt from the statute’s wage and overtime provisions. In practice, this meant that whenever it was unclear whether a particular position was exempt, courts were more likely to conclude it was not. This benefitted plaintiff employees bringing wage and hour claims alleging that their employers misclassified them as exempt.
In a recent decision, Encino Motorcars, LLC v. Navarro, the Supreme Court turned this longstanding precedent on its head. In Encino Motorcars, the Court interpreted the exemption under the FLSA that exempts “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles” from its overtime provisions. The Court addressed whether car dealership service advisors – i.e., employees who consulted with customers about their automobile servicing needs and sold customers servicing solutions – fell under this exemption. The U.S. Court of Appeals for the Ninth Circuit concluded they did not. In reaching this conclusion, the Ninth Circuit applied the long-standing precedent that courts should narrowly construe the FLSA’s provisions.
The Supreme Court reversed the Ninth Circuit’s decision. After a lengthy discussion about the construction of the FLSA’s text, the Court determined that service advisors fell within the “salesman, partsman, or mechanic” exemption, despite the fact that they neither sold automobiles nor were generally responsible for servicing them. The Court reached this conclusion by determining that these employees were technically “salesmen.” Also, because these employees provided advice and sold services to customers, the Court found this technically could be interpreted to mean that they “serviced automobiles.”
One easily could argue that the Court did not base its holding on a narrow construction of the FLSA. Departing from the Court’s decades-long precedent, the Supreme Court explicitly rejected the principle of using narrow construction “as a useful guidepost for interpreting the FLSA.” Instead, the Court had “no license” to give the FLSA’s exemptions “anything but a fair reading.” With this simple statement, the FLSA’s provisions should now be interpreted “fairly” and no longer “narrowly.”
While it is too soon to say what the full impact of the Court’s Encino Motorcars decision will be, it likely will have far-reaching consequences. For the first time since the FLSA was enacted in 1938, the Supreme Court has given lower courts – and by extension, employers – license to take broader liberties in determining whether a position is exempt from the FLSA’s wage and overtime provisions.
When classifying employees, employers should still proceed with caution and err on the side of classifying positions as non-exempt, particularly when there is room for interpretation. Misclassifying an employee as exempt can result in costly litigation, including back pay for unpaid overtime wages, liquidated damages, and payment of attorneys’ fees and costs. However, the Supreme Court’s Encino Motorcars decision is a positive development for employers.
*Lauren M. Drabic works in Z&R’s Cleveland office and practices in all areas of labor and employment law. If you have questions regarding the FLSA’s wage and hour exemptions or other employment-related matters, please contact Lauren at lmd@zrlaw.com or 216.696.4441.
By Patrick M. Watts*
The Cuyahoga County Council recently enacted Ordinance No. O2018-0009, which specifically outlaws discrimination based upon sexual orientation and gender identity or expression. The ordinance also outlaws discrimination based upon “race, color, religion, military status, national origin, disability, age, ancestry, familial status, and sex.” Finally, the ordinance creates a Commission on Human Rights.
The ordinance affords the commission the power to “review, hear, decide, and enforce final decisions rendered under” the ordinance. The commission also has the power to issue subpoenas, require production of evidence, require attendance of witnesses, order preservation of evidence, assess civil administrative penalties, issue cease and desist orders, take certain actions in court to secure evidence, and generally exercise other powers “reasonable and necessary to fulfill [its] purpose.”
Complaints regarding “unlawful employment practice[s]” must be filed within 150 days after the alleged unlawful discriminatory practices or acts occurred. A response to any complaint is due within 30 days after service of any complaint. The ordinance contemplates that a hearing occur concerning the allegations contained in the complaint. Thereafter, the commission is charged with issuing a Final Decision and Order regarding whether the allegations are substantiated. To the extent the commission finds a violation, the commission can issue a cease and desist order and may issue civil penalties. Civil penalties may not exceed $5,000. The commission also may award reasonable attorneys’ fees and costs to the complainant. Any party may appeal a commission decision to the Cuyahoga County Court of Common Pleas for judicial review.
In addition to provisions relating to fair housing and public accommodations, the ordinance specifically prohibits “any employer, because of race, color, religion, military status, national origin, disability, age, ancestry, sex, sexual orientation, or gender identity or expression,” from “discharg[ing] without cause,” “refus[ing] to hire a person or otherwise…discriminat[ing] against any person with respect to hire, promotion, tenure, discharge, or any terms, conditions or privileges of employment, or any matter related to employment.”
The ordinance also outlaws certain other actions, such as publishing or circulating discriminatory notices, advertisements, or failing to “classify properly” any individual within a protected class. The ordinance prohibits employers from eliciting information concerning membership in any protected class, including sexual orientation and gender identity or expression on any application for employment, unless based upon a bona fide occupational qualification. The ordinance further prohibits retaliation against any person for opposing practices forbidden by the ordinance. The ordinance has certain exceptions, including for religious organizations.
Cuyahoga County employers should implement necessary changes to existing policies to ensure compliance with this new ordinance.
*Patrick M. Watts, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of labor and employment law. If you have questions about this ordinance or the Cuyahoga County Commission on Human Rights, please contact Patrick at pmw@zrlaw.com or 216.696.4441.
By Moriah L. Stutler*
At the beginning of the year, several states, including Ohio, increased their minimum wage. In Ohio, the minimum wage increased by twenty-five cents per hour to $8.55 for non-tipped employees and $4.30 for tipped employees. Ohio’s law applies to employers with gross revenue of $314,000.00 or more. Ohio employers grossing less than $314,000.00 are only required to pay the federal minimum wage, which is $7.25 per hour to non-tipped employees and $2.13 per hour to tipped employees. Additionally, Ohio employers only are required to pay minors age fifteen or younger the federal minimum wage.
Some states did not wait for the New Year to increase wages. On July 1, 2018, Maryland’s minimum wage increased to $10.10 per hour, while District of Columbia’s minimum wage increased to $13.25 per hour. On December 31, 2018, New York fast food employees saw a minimum wage increase to $12.75 per hour, and other New York employees saw an increase to $11.10 per hour. Other states will see increases later in 2019. For example, Oregon’s minimum wage will increase to $11.25 per hour on July 1, 2019.
Recently, states have been moving towards the “Living Wage” and “$15 Minimum Wage Initiative.” A number of states, including Florida, Hawaii, Maryland, Massachusetts, New Jersey, and New York have proposed bills that would increase their minimum wage to approximately $15.00 per hour within the next five to seven years.
Employers also should be aware that some municipalities have local laws setting higher minimum wages than the state minimum wage.
*Moriah L. Stutler practices in all areas of labor and employment law. For more information about minimum wage and other wage and hour questions, please contact Moriah at mls@zrlaw.com or 216.696.4441
Alison Buzzard represents public and private sector employers in all aspects of labor and employment law. Prior to joining Zashin & Rich in 2018 at the firm's Columbus office, Alison worked as a law clerk assisting with public and private sector labor matters while she attended The Ohio State University Moritz College of Law. At Moritz, Alison served as an Associate Editor for the Ohio State Law Journal and took part in Ohio State’s moot court program, both as a member of the Governing Board and a competitor and semifinalist in the National Moot Court Competition in Child Welfare and Adoption Law.
Moriah Stutler's practice encompasses all areas of labor and employment law. Prior to joining Zashin & Rich, Moriah spent several years at a big four accounting firm in the mergers and acquisitions tax practice, where she assisted large multinational companies execute multi-million dollar acquisitions, dispositions, and other global structuring transactions. Moriah earned her law degree and MBA from The University of Akron, where she was a graduate assistant in the department of finance.
March 6, 2019
Drew C. Piersall presents “Emerging Trends in Discrimination and Retaliation Law” at the Labor and Employment Law Section meeting of the Columbus Bar Association in Columbus, Ohio.
March 7, 2019
Jonathan J. Downes presents “FMLA, ADA & Interactive Process” at the Jobs and Family Services Human Resource Association Conference 2019 at the Quest Conference Center in Columbus, Ohio.
April 5, 2019
David R. Vance will be presenting on civil claims under Ohio Revised Code 2307.60, including civil theft, at the CMBA Litigation Section’s lunch and CLE in Cleveland, Ohio.
April 24, 2019
George S. Crisci presents “Train Your Supervisors to Mitigate Lawsuits” and “Create Documentation That is a Legal Shield” at the National Business Institute’s “Why Employers Get Sued: How You Can Stop It” seminar in Maumee, Ohio.
- The NLRB Proposes New Joint-Employer Standard Limiting Employers’ Liability
- FLSA & Car Dealer Alert: What’s Fair is Fair
- Cuyahoga County Council Passes Law Protecting Sexual Orientation & Gender Identity
- New Year, New Wages: Minimum Wage Increases in Several States
- Z&R SHORTS
The NLRB Proposes New Joint-Employer Standard Limiting Employers’ Liability
By Jessi L. Ziska*Recently, the National Labor Relations Board (“NLRB”) published a notice of proposed rulemaking on the standard for determining joint-employer status. The proposed rule makes it less likely that a company would be deemed a joint-employer liable for labor law violations involving workers the company engages at arm’s length, such as subcontractors or franchisees. Under the NLRB’s proposed standard, an employer may be deemed a joint-employer of another employer’s employees only if it possesses and exercises “substantial, direct and immediate control” over the essential terms and conditions of the employees’ employment and has done so in a manner that is not “limited and routine.” The proposed rule is intended to avoid forcing companies, who have not exerted control over the terms and conditions of employment of other companies’ employees, to be involved in collective bargaining negotiations or defending against unfair labor practice charges with respect to those employees.
The Current Joint-Employer Standard
In 2015, the NLRB’s decision in Browning-Ferris Industries of California, Inc., d/b/a BFI Newby Island Recyclery, 362 NLRB No. 186 (2015) (“Browning-Ferris”) established a new joint-employer standard to replace the decades-old standard set forth in TLI, Inc., 271 NLRB 798 (1984) and Laerco Transportation, 269 NLRB 324 (1984), both now reversed by Browning-Ferris. Under the the Browning-Ferris standard, which currently controls, multiple entities are deemed a joint-employer of a single workforce if (1) “they are both employers within the meaning of the common law” and (2) they “share or co-determine” matters governing the essential terms and conditions of employment. Essentially, if an employer retains the right to control another employer’s employees — regardless of whether it actually exercises that control — this is sufficient to establish a joint-employer relationship with respect to those employees. The Browning-Ferris standard potentially exposes more companies to legal liability as joint-employers than the pre-2015 standard. Prior to Browning-Ferris, the NLRB defined a joint-employer as one who exercised “direct and immediate” control over the workers’ terms and conditions of employment. A detailed discussion of the Browning-Ferris decision and pre-2015 standard can be found here.A Move to Return to the Pre-2015 Joint-Employer Standard
The NLRB’s December 2017 decision in Hy-Brand Industrial Contractors, Ltd, 365 NLRB No. 156 (2017) (“Hy-Brand”) overruled the controversial Browning-Ferris joint-employer standard. However, the Hy-Brand case was vacated by the NLRB in February 2018 for an alleged conflict of interest due to NLRB Member Emanuel’s participation in the case, leaving employers once again subject to the Browning-Ferris standard. This hiccup did not deter the NLRB from re-establishing the pre-2015 joint-employer standard. Unable to overturn the Browning-Ferris standard through case ruling, the NLRB is engaging in rulemaking to overturn the current standard. Further, a standard issued through rulemaking is less likely to be reversed than a standard established by case ruling, since those rulings easily can be overturned if the NLRB majority flips.The proposed rule could be even better for employers than the pre-2015 standard because, in listing the criteria for whether a company exercises enough control to be considered a joint-employer, the proposed rule requires substantial “direct and immediate control.” The NLRB maintains that the proposed rule fosters predictability, consistency, and stability in the determination of joint-employer status.
After releasing the proposed rule, the NLRB accepted comments from the public, which it will now consider in formulating its final rule. Regardless of the final rule’s language, employers must remain cognizant of the control they exert over subcontractors, independent contractors, etc., and analyze whether it creates an employment relationship with such individuals, giving rise to related liability.
*Jessi L. Ziska practices in all areas of labor and employment law. If you have questions regarding the NLRB’s proposed joint-employer rule, please contact Jessi at jlz@zrlaw.com or 216.696.4441.
FLSA & Car Dealer Alert: What’s Fair is Fair
By Lauren M. Drabic*
The Fair Labor Standards Act (“FLSA”) provides wage and overtime protections for full- and part-time workers in both the private and public sectors. In particular, it establishes the federal minimum wage and generally requires covered employers to pay their employees an overtime rate at one and one-half times their regular rate of pay for hours worked over 40 in a workweek. However, the statute exempts certain employees from these minimum wage and overtime protections depending on the nature of the employee’s position, duties, and pay. The statute lists more than a dozen categories of positions that are exempt from the FLSA’s minimum wage and overtime protections. Federal regulations provide further guidance on positions that qualify as exempt.
Some FLSA provisions and related federal regulations are specific and leave little room for interpretation as to whether a certain position is exempt. For example, the FLSA specifically delineates that elementary and secondary school teachers are exempt from one or more of its protections, as are criminal investigators, police officers, firefighters, computer programmers, software engineers, cab drivers, babysitters hired on a casual basis, movie theater employees, and certain employees employed in agriculture. Federal regulations further delineate, by way of example, that doctors, lawyers, architects, and engineers typically are considered exempt employees. The applicability of other exemptions under the FLSA, however, are far from clear, even in light of additional guidance.
For nearly six decades, the Supreme Court held time and again that, when ambiguous, the provisions of the FLSA – including these exemption provisions – should be narrowly construed. In essence, this meant that unless the position at issue explicitly and irrefutably fell within the plain meaning of the FLSA’s exemption provisions – or as the Supreme Court once put it, “plainly and unmistakably [fell] within the terms or the spirit” of those provisions – such a position could not be considered exempt from the statute’s wage and overtime provisions. In practice, this meant that whenever it was unclear whether a particular position was exempt, courts were more likely to conclude it was not. This benefitted plaintiff employees bringing wage and hour claims alleging that their employers misclassified them as exempt.
In a recent decision, Encino Motorcars, LLC v. Navarro, the Supreme Court turned this longstanding precedent on its head. In Encino Motorcars, the Court interpreted the exemption under the FLSA that exempts “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles” from its overtime provisions. The Court addressed whether car dealership service advisors – i.e., employees who consulted with customers about their automobile servicing needs and sold customers servicing solutions – fell under this exemption. The U.S. Court of Appeals for the Ninth Circuit concluded they did not. In reaching this conclusion, the Ninth Circuit applied the long-standing precedent that courts should narrowly construe the FLSA’s provisions.
The Supreme Court reversed the Ninth Circuit’s decision. After a lengthy discussion about the construction of the FLSA’s text, the Court determined that service advisors fell within the “salesman, partsman, or mechanic” exemption, despite the fact that they neither sold automobiles nor were generally responsible for servicing them. The Court reached this conclusion by determining that these employees were technically “salesmen.” Also, because these employees provided advice and sold services to customers, the Court found this technically could be interpreted to mean that they “serviced automobiles.”
One easily could argue that the Court did not base its holding on a narrow construction of the FLSA. Departing from the Court’s decades-long precedent, the Supreme Court explicitly rejected the principle of using narrow construction “as a useful guidepost for interpreting the FLSA.” Instead, the Court had “no license” to give the FLSA’s exemptions “anything but a fair reading.” With this simple statement, the FLSA’s provisions should now be interpreted “fairly” and no longer “narrowly.”
While it is too soon to say what the full impact of the Court’s Encino Motorcars decision will be, it likely will have far-reaching consequences. For the first time since the FLSA was enacted in 1938, the Supreme Court has given lower courts – and by extension, employers – license to take broader liberties in determining whether a position is exempt from the FLSA’s wage and overtime provisions.
When classifying employees, employers should still proceed with caution and err on the side of classifying positions as non-exempt, particularly when there is room for interpretation. Misclassifying an employee as exempt can result in costly litigation, including back pay for unpaid overtime wages, liquidated damages, and payment of attorneys’ fees and costs. However, the Supreme Court’s Encino Motorcars decision is a positive development for employers.
*Lauren M. Drabic works in Z&R’s Cleveland office and practices in all areas of labor and employment law. If you have questions regarding the FLSA’s wage and hour exemptions or other employment-related matters, please contact Lauren at lmd@zrlaw.com or 216.696.4441.
Cuyahoga County Council Passes Law Protecting Sexual Orientation & Gender Identity
By Patrick M. Watts*
The Cuyahoga County Council recently enacted Ordinance No. O2018-0009, which specifically outlaws discrimination based upon sexual orientation and gender identity or expression. The ordinance also outlaws discrimination based upon “race, color, religion, military status, national origin, disability, age, ancestry, familial status, and sex.” Finally, the ordinance creates a Commission on Human Rights.
Commission on Human Rights
The ordinance creates a new Commission on Human Rights that is charged with promoting “principles of diversity, inclusion, and harmony in the County of Cuyahoga.” The commission will have three members who are appointed by the County Executive and confirmed by the County Council. The ordinance requires that these members be licensed attorneys. The commission is charged with receiving, investigating, and attempting to mediate all complaints filed under the ordinance. Of note, the commission is charged with generally encouraging complainants to file a complaint with the applicable state and federal bodies, including the Ohio Civil Rights Commission and U.S. Equal Employment Opportunity Commission. The commission is authorized to decline the exercise of jurisdiction in most circumstances. However, the ordinance requires that complaints exclusively alleging discrimination based upon “sexual orientation and/or gender identity or expression… be adjudicated by the commission… without deferral” to the related state and/or federal agency.The ordinance affords the commission the power to “review, hear, decide, and enforce final decisions rendered under” the ordinance. The commission also has the power to issue subpoenas, require production of evidence, require attendance of witnesses, order preservation of evidence, assess civil administrative penalties, issue cease and desist orders, take certain actions in court to secure evidence, and generally exercise other powers “reasonable and necessary to fulfill [its] purpose.”
Complaints regarding “unlawful employment practice[s]” must be filed within 150 days after the alleged unlawful discriminatory practices or acts occurred. A response to any complaint is due within 30 days after service of any complaint. The ordinance contemplates that a hearing occur concerning the allegations contained in the complaint. Thereafter, the commission is charged with issuing a Final Decision and Order regarding whether the allegations are substantiated. To the extent the commission finds a violation, the commission can issue a cease and desist order and may issue civil penalties. Civil penalties may not exceed $5,000. The commission also may award reasonable attorneys’ fees and costs to the complainant. Any party may appeal a commission decision to the Cuyahoga County Court of Common Pleas for judicial review.
Anti-Discrimination Law and Unlawful Employment Practices under the Ordinance
In addition to existing protections for various protected classes, the ordinance specifically adds protections for sexual orientation and gender identity or expression. The ordinance defines “[g]ender identity or expression” as “an individual’s actual or perceived gender-related identity, appearance, expression, mannerisms, or other gender-related characteristics, regardless of the individual’s designated sex at birth.”In addition to provisions relating to fair housing and public accommodations, the ordinance specifically prohibits “any employer, because of race, color, religion, military status, national origin, disability, age, ancestry, sex, sexual orientation, or gender identity or expression,” from “discharg[ing] without cause,” “refus[ing] to hire a person or otherwise…discriminat[ing] against any person with respect to hire, promotion, tenure, discharge, or any terms, conditions or privileges of employment, or any matter related to employment.”
The ordinance also outlaws certain other actions, such as publishing or circulating discriminatory notices, advertisements, or failing to “classify properly” any individual within a protected class. The ordinance prohibits employers from eliciting information concerning membership in any protected class, including sexual orientation and gender identity or expression on any application for employment, unless based upon a bona fide occupational qualification. The ordinance further prohibits retaliation against any person for opposing practices forbidden by the ordinance. The ordinance has certain exceptions, including for religious organizations.
Cuyahoga County employers should implement necessary changes to existing policies to ensure compliance with this new ordinance.
*Patrick M. Watts, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of labor and employment law. If you have questions about this ordinance or the Cuyahoga County Commission on Human Rights, please contact Patrick at pmw@zrlaw.com or 216.696.4441.
New Year, New Wages: Minimum Wage Increases in Several States
By Moriah L. Stutler*
At the beginning of the year, several states, including Ohio, increased their minimum wage. In Ohio, the minimum wage increased by twenty-five cents per hour to $8.55 for non-tipped employees and $4.30 for tipped employees. Ohio’s law applies to employers with gross revenue of $314,000.00 or more. Ohio employers grossing less than $314,000.00 are only required to pay the federal minimum wage, which is $7.25 per hour to non-tipped employees and $2.13 per hour to tipped employees. Additionally, Ohio employers only are required to pay minors age fifteen or younger the federal minimum wage.
Some states did not wait for the New Year to increase wages. On July 1, 2018, Maryland’s minimum wage increased to $10.10 per hour, while District of Columbia’s minimum wage increased to $13.25 per hour. On December 31, 2018, New York fast food employees saw a minimum wage increase to $12.75 per hour, and other New York employees saw an increase to $11.10 per hour. Other states will see increases later in 2019. For example, Oregon’s minimum wage will increase to $11.25 per hour on July 1, 2019.
Recently, states have been moving towards the “Living Wage” and “$15 Minimum Wage Initiative.” A number of states, including Florida, Hawaii, Maryland, Massachusetts, New Jersey, and New York have proposed bills that would increase their minimum wage to approximately $15.00 per hour within the next five to seven years.
Employers also should be aware that some municipalities have local laws setting higher minimum wages than the state minimum wage.
The following table includes all increases to state minimum wages in 2019 (unless otherwise noted, all increases were effective January 1, 2019):
STATE | NON-TIPPED | TIPPED |
Alaska | $9.89 | $9.89 |
Arizona | $11.00 | $8.00 |
California | $12 for larger employers; $11 for smaller employer | $12 for larger employers; $11 for smaller employer |
Colorado | $11.10 | $8.08 |
District of Columbia (effective 7/1/2018) | $13.25 | $3.89 |
Florida | $8.46 | $5.44 |
Maine | $11.00 | $5.50 |
Maryland (effective 7/1/2018) | $10.10 | $3.63 |
Massachusetts | $12.00 | $4.35 |
Minnesota | $9.86 for larger employers; $8.04 for smaller employers | $9.86 for larger employers; $8.04 for smaller employers |
Montana | $8.50 | $8.50 |
New Jersey | $8.85 | $8.85 |
New York (effective 12/31/18) | $12.75 for fast food employees; $11.10 for other employees | $7.50 for food service employees; $9.25 for other service employees |
Ohio | $8.55 | $4.30 |
Oregon (effective 7/1/19) | $11.25 | $11.25 |
Rhode Island | $10.50 | $3.89 |
South Dakota | $9.10 | $4.55 |
Vermont | $10.78 | $5.39 |
Washington | $12.00 | $12.00 |
*Moriah L. Stutler practices in all areas of labor and employment law. For more information about minimum wage and other wage and hour questions, please contact Moriah at mls@zrlaw.com or 216.696.4441
Z&R SHORTS
Please join Z&R in welcoming Alison Buzzard and Moriah Stutler to its Employment and Labor Groups
Alison Buzzard represents public and private sector employers in all aspects of labor and employment law. Prior to joining Zashin & Rich in 2018 at the firm's Columbus office, Alison worked as a law clerk assisting with public and private sector labor matters while she attended The Ohio State University Moritz College of Law. At Moritz, Alison served as an Associate Editor for the Ohio State Law Journal and took part in Ohio State’s moot court program, both as a member of the Governing Board and a competitor and semifinalist in the National Moot Court Competition in Child Welfare and Adoption Law.
Moriah Stutler's practice encompasses all areas of labor and employment law. Prior to joining Zashin & Rich, Moriah spent several years at a big four accounting firm in the mergers and acquisitions tax practice, where she assisted large multinational companies execute multi-million dollar acquisitions, dispositions, and other global structuring transactions. Moriah earned her law degree and MBA from The University of Akron, where she was a graduate assistant in the department of finance.
Upcoming Speaking Engagements
March 6, 2019
Drew C. Piersall presents “Emerging Trends in Discrimination and Retaliation Law” at the Labor and Employment Law Section meeting of the Columbus Bar Association in Columbus, Ohio.
March 7, 2019
Jonathan J. Downes presents “FMLA, ADA & Interactive Process” at the Jobs and Family Services Human Resource Association Conference 2019 at the Quest Conference Center in Columbus, Ohio.
April 5, 2019
David R. Vance will be presenting on civil claims under Ohio Revised Code 2307.60, including civil theft, at the CMBA Litigation Section’s lunch and CLE in Cleveland, Ohio.
April 24, 2019
George S. Crisci presents “Train Your Supervisors to Mitigate Lawsuits” and “Create Documentation That is a Legal Shield” at the National Business Institute’s “Why Employers Get Sued: How You Can Stop It” seminar in Maumee, Ohio.
Monday, February 12, 2018
EMPLOYMENT LAW QUARTERLY | Winter 2018, Volume XX, Issue i
Download PDF
Policy Review:
☐ Review discrimination, harassment and retaliation policies;
☐ Review policies concerning Family and Medical Leave and disability accommodation issues;
☐ Review policies concerning pay for time worked (including reviews of pre and post shift work and meal and rest breaks);
☐ Review social media policies to ensure that they comply with recent guidance from the National Labor Relations Board (even if the company is a non-union employer);
☐ Review wage deduction policies to ensure that only proper deductions are made from employee pay; and,
☐ Update confidentiality, non-solicitation and non-compete agreements to take advantage of the Defend Trade Secrets Act.
Applications:
☐ Revise employment applications to comport with "ban the box" rules governing questions about convictions; and,
☐ Review employment application procedures to ensure that all third party background checks comply with the Fair Credit Reporting Act.
Training:
☐ Train employees, managers and supervisors about discrimination, harassment and retaliation; and,
☐ Train managers and supervisors about FMLA and ADA leaves of absences and accommodations.
Audit:
☐ Ensure that employees are properly classified as exempt or non-exempt under the Fair Labor Standards Act;
☐ Review pay practices to ensure that minorities are not statistically disadvantaged in compensation;
☐ Review workforce composition information to ensure that minorities are not statistically disadvantaged in management;
☐ Analyze health care enrollment to ensure that only eligible participants are on the company's medical plan; and,
☐ Review independent contractor classifications to ensure that those working under such arrangements are actually independent contractors.
Be sure to follow Zashin & Rich's Employment Law Quarterly to stay updated on labor and employment law developments in 2018.
*Stephen S. Zashin, an OSBA Certified Specialist in Labor and Employment Law, is the founder of the firm's Labor and Employment Groups and has extensive experience with all aspects of labor and employment law. If you have questions regarding the above checklist or any other labor or employment issues, please contact Stephen at ssz@zrlaw.com or (216) 696-4441.
In recent years, many employers were frustrated and confounded by a seemingly endless string of NLRB decisions rendering work rules unlawful, including those commonly set forth in employee handbooks. In analyzing these rules, the NLRB used a standard (referred to as the Lutheran Heritage standard) that asked, in part, whether an employee would "reasonably construe" the work rule to prohibit NLRA-protected activity. The NLRB's application of this standard led to inconsistent and arbitrary results. For example, the NLRB found rules prohibiting "loud, abusive, or foul language" and an "inability or unwillingness to work harmoniously" to be unlawful, yet approved of rules prohibiting "abusive or threatening language" and "conduct that does not support the . . . [employer's] goals and objectives." The NLRB's application of the Lutheran Heritage standard "produced rampant confusion for employers" and allowed the NLRB to find neutral and innocuous work rules unlawful, without giving due consideration to legitimate business justifications underlying the rules.
Fortunately for employers, in December 2017, the NLRB overturned the Lutheran Heritage standard and adopted a new framework for analyzing work rules. See The Boeing Company, 365 NLRB No. 154 (Dec. 14, 2017). Under this new standard, the NLRB evaluates: (1) the nature and extent of the work rule's potential impact on employees' protected rights under the NLRA; and (2) the legitimate justifications associated with the work rule. In Boeing, the NLRB applied this new framework to a "no-camera rule" implemented by Boeing that restricted employee use of cell phones and other camera-enabled devices on company property. Initially, an Administrative Law Judge ("ALJ") found Boeing's no-camera rule unlawful under the Lutheran Heritage standard. Reversing the ALJ, the NLRB emphasized the "fundamental problems with the . . . application of Lutheran Heritage when evaluating the maintenance of work rules, policies and employee handbook provisions." These problems included the NLRB's failure to take into consideration legitimate justifications associated with the work rules, the false premise that employees are better served by no work rules as opposed to ones that may have some overlap with NLRA coverage, and the failure of the standard to allow the NLRB to differentiate among industries and work settings.
Applying its new standard to Boeing's no-camera rule, the NLRB held that any potential impact on Boeing's employees' exercise of protected rights under the NLRA was outweighed by the substantial and important justifications underlying the rule. These justifications included Boeing's need to maintain its security protocols, protect against the disclosure of sensitive and proprietary information (including employee personal information), and (as an aircraft manufacturer and military defense contractor) limit the risk of becoming the target of a terrorist attack.
In another December 2017 decision, the NLRB announced it was returning to its prior standard for evaluating whether two entities should be deemed a joint employer, and therefore, subjected to joint and several liability under the NLRA. See Hy-Brand Industrial Contractors, 365 NLRB No. 156 (Dec. 14, 2017). In 2015, the NLRB held that two entities are joint employers based on the mere existence of reserved joint control (i.e., a contractual right to exercise control), or based on "indirect" or "limited and routine" control. The NLRB could have deemed two entities joint employers even if they never actually exercised joint control over essential terms and conditions of an employee's employment. Under this broad standard, a parent company or even a client could face liability on legal obligations under the NLRA, even without exercising any control over a subsidiary's or vendor's employees.
In Hy-Brand, the NLRB rejected this standard in favor of the pre-existing joint employer test, under which "the essential element in . . . [the] analysis is whether a putative joint employer's control over employment matters is direct and immediate." In conducting this analysis, the NLRB will now focus, as it did in the past, on "whether an alleged joint employer 'meaningfully affects matters relating to the employment relationship such as hiring, firing, discipline, supervision, and direction.'" Accordingly, the mere existence of reserved control, which has not been exercised, or indirect or limited and routine control is no longer sufficient to give rise to joint employer status and joint and several liability under the NLRA.
Also in December 2017, the NLRB's newly-appointed General Counsel issued a memorandum to the leadership of the NLRB's regional offices, which set forth guidelines and priorities going forward. These priorities include special attention to "[s]ignificant legal issues includ[ing] cases over the last eight years that overruled precedent and involved one or more dissents." The General Counsel enumerated a number of areas of focus, including employee access to employer email to engage in union-related and other protected activity under the NLRA, off-duty employee access to employer property, work rules, and joint employer status. The NLRB has already issued decisions regarding work rules and the joint employer standard. Additional decisions from the NLRB are likely forthcoming that further revise Obama-era policies.
As demonstrated by the Boeing and Hy-Brand cases, which were decided shortly after the General Counsel issued the memorandum, a dramatic shift appears to be underway at the NLRB. Zashin & Rich will continue to report on developments from the NLRB.
*Patrick J. Hoban, an OSBA Certified Specialist in Labor and Employment Law, regularly practices before the NLRB and counsels employers regarding work rules and protected activity. If you have questions about recent developments at the NLRB, please contact Pat at pjh@zrlaw.com or (216) 696-4441
In Reedy, the plaintiff, who was married but separated from his wife, had custody of their five children. During one of his shifts as a truck driver, the plaintiff left his truck at a truck stop and went home early due to a snowstorm. When his supervisor ordered him to retrieve the truck the following day, the plaintiff refused because he could not find a babysitter. His supervisor responded: "I don't give a f*** about your kids. Get your f***ing ass in that truck because that's where we need to have you." Subsequently, another one of the plaintiff's supervisors told him that, if he had known the plaintiff was a single parent, he would not have hired him. A few days later, the employer terminated the plaintiff, citing issues with his performance including his refusal to retrieve the truck as ordered.
The plaintiff then filed a lawsuit alleging his employer discriminated against him based on his status as a single parent in violation of Michigan's antidiscrimination law, which specifically prohibits discrimination based on "marital status." After the district court dismissed his discrimination claim, the plaintiff appealed to the Sixth Circuit. On appeal, the Sixth Circuit assumed the plaintiff qualified for protected status, noting that the Michigan Supreme Court has never addressed whether the State's antidiscrimination law "covers single or separated parents (or the perception of single with children while still married)."
In support of his discrimination claim, the plaintiff relied solely on his supervisors' statements. Affirming the dismissal of his claim, the Sixth Circuit held that "[t]otal reliance on statements about [the plaintiff's] status as a single parent is not sufficient evidence of motivation to terminate his employment." The court noted that the supervisors' statements, although close in time to the plaintiff's termination, were not directly linked to the decision to terminate his employment. Furthermore, the plaintiff failed to present any additional evidence to call into question the legitimacy of the employer's stated reasons for his termination, including his failure to retrieve the truck as directed.
The Sixth Circuit also found that the plaintiff failed to present evidence that the employer treated him differently on the basis of his marital status. Specifically, the plaintiff was unable to point to anyone outside his protected class who enjoyed better treatment from the employer.
While the Sixth Circuit affirmed the dismissal of the plaintiff's discrimination claim, one of the judges felt his claim should have survived. In a dissenting opinion, Judge White stated that the supervisors' troubling statements "certainly . . . [gave] rise to an inference of unlawful discrimination."
Unlike Michigan's antidiscrimination law, Title VII of the Civil Rights Act of 1964 and Ohio's antidiscrimination law do not specifically prohibit discrimination based upon "marital status" in the employment context. Nevertheless, employers in Ohio and elsewhere still should be cautious of making employment decisions based upon employee or applicant marital or familial status as local ordinances may prohibit such conduct. Also, even in the absence of a law specifically prohibiting these types of discrimination, employees may be able to bring suit against their employers for sex-based discrimination arising out of comments or actions tied to their marital or familial status. For example, an employer could give rise to a discrimination claim by asking only female job applicants whether they are married or have young children.
In sum, employees' familial obligations can present challenges for employees and their employers alike. Although the Sixth Circuit in Reedy found the comments insufficient to prove discrimination, employers should be cautious of actions and comments based on or relating to their employees' marital or familial status.
*Jessi L. Ziska recently joined Zashin & Rich in their Cleveland office and practices in all areas of labor and employment law. If you have questions regarding the Reedy decision, please contact Jessi at jlz@zrlaw.com or (216) 696-4441.
Ohio Revised Code Section 4117.01 sets forth a number of exclusions from the definition of "public employee" under Ohio's collective bargaining law. If a public employee falls within one of these exclusions, then the employee is not entitled to collective bargaining rights. One such exclusion applies to "supervisors," which are defined, in part, as individuals who have the authority to "to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other public employees; to responsibly direct them; to adjust their grievances; or to effectively recommend such action, if the exercise of that authority is not of a merely routine or clerical nature, but requires the use of independent judgment." R.C. 4117.01(F).
In April 2017, a union filed a request to represent, for collective bargaining purposes, all EMTs, paramedics, lieutenants, and captains in the Athens County EMS Department. After the County Commissioners objected to this request, SERB directed the matter to its Office of General Counsel for an inquiry. SERB asked the General Counsel to determine whether the EMS captains and lieutenants were exempt from the definition of "public employees" under Ohio Revised Code Chapter 4117. On November 7, 2017, SERB's General Counsel issued findings of fact and conclusions of law, finding the captains and lieutenants qualified under the "supervisor" exemption. Subsequently, SERB adopted the General Counsel's conclusions, granted the Athens County Commissioners' objection, and denied the union's request to represent the EMS captains and lieutenants.
The Athens County EMS Department was comprised of the chief, assistant chief, five captains, two lieutenants, and 38 EMT/paramedics. Among various other duties, the captains and lieutenants were involved in hiring employees, including participating in candidate interviews and making hiring recommendations. Likewise, both the captains and lieutenants disciplined employees, including issuing verbal and written reprimands without prior approval, and developed and conducted annual performance evaluations.
In analyzing these responsibilities under R.C. 4117.01, SERB noted the captains and lieutenants did perform "duties that are routine and ministerial in nature: however, there are duties that require judgment to initiate action and utilize discretion without further review." Pointing specifically to the captains' and lieutenants' responsibilities with respect to employee performance evaluations and employee discipline through written and verbal reprimands, SERB found that the captains and lieutenants met the "supervisor" criteria as set forth in R.C. 4117.01(F). Therefore, they were exempted from the definition of "public employee" and were not entitled to collective bargaining rights under Ohio law.
As the operations of safety forces continue to develop, management must consider the structural application of their organizations. Petitions to amend existing bargaining units can be filed at SERB. Careful application of the standards and the procedural steps must be taken. These cases are fact specific, and public employers looking to amend a bargaining unit should contact counsel to evaluate the merits of doing so.
*George S. Crisci, an OSBA Certified Specialist in Labor and Employment Law, has extensive experience representing employers before SERB. If you have questions regarding this SERB decision or other collective bargaining issues, contact George at gsc@zrlaw.com or (216) 696-4441.
Jessi L. Ziska earned her law degree, as well as certificates in both Litigation and Alternative Dispute Resolution and Health Law, from The University of Akron School of Law. Jessi was a member of the Moot Court Honor Society ("MCHS") and Trial Team. As a member of the MCHS, Jessi competed in the 2016 American Bar Association National Appellate Advocacy Competition in Boston, Massachusetts. Jessi was later elected to serve as the President of the MCHS. After her performance in Akron Law's Summer Trial Academy, Jessi was selected to join Akron Law's nationally-known Trial Team, which gave her the opportunity to compete in the 2016 Ohio Attorney General's Public Service Mock Trial Competition in Columbus. As part of Akron Law's Health Law program, Jessi completed an externship in the health law practice group of a well-established, Northeast Ohio firm. During her externship, she reviewed and revised employment agreements between physicians and hospitals, formed various corporate and non-profit entities, and ensured corporate compliance with federal and state laws.
Christopher D. Caspary's practice focuses on employment litigation and corporate employment counseling. Chris previously practiced in the areas of civil litigation and insurance defense, and appeared in courts throughout Ohio and in federal court. Chris's experience also includes taking and defending depositions, drafting pretrial motions and pleadings, and advising clients on complex legal issues. Following law school, Chris clerked for the Honorable Nancy A. Fuerst in the Cuyahoga County Court of Common Pleas, where he drafted opinions and rulings, conducted certain hearings and conferences, and provided legal recommendations to the Judge. While in law school, Chris specialized in labor and employment law, worked in the Employment Law Clinic, and externed with the Federal Trade Commission. Chris is the Vice-Chair and incoming Chair of the Cleveland Metropolitan Bar Association's Litigation Section. Chris is a member of the Cleveland Metropolitan Bar Association's Bar Admissions Committee and is a member of the William K. Thomas Inn of Court. Chris was also a delegate to the 8th Judicial District Conference in May 2015 and October 2016.
March 2, 2018
Jonathan J. Downes and Drew C. Piersall present "Beyond Sexual Harassment and Other Claims of Discrimination - Legal and Practical Realities" at the Ohio Municipal Attorneys Association's 2018 Spring Municipal Civil and Criminal Law Seminar at the Westin in Columbus, Ohio.
March 2, 2018
Stephen S. Zashin presents "Hearing Employment Law Cases" at The Supreme Court of Ohio Judicial College Webinar.
March 14, 2018
Patrick M. Watts presents "Conducting Harassment Investigations" at the Greater Ashtabula Chamber of Commerce in Ashtabula, Ohio.
March 19, 2018
Jonathan J. Downes presents "Legal Minefields to Avoid" at the Ohio Association of Chiefs of Police - New Chiefs' Workshop at the Crowne Plaza in Dublin, Ohio.
- Out with the Old, in with the New: A Look Forward and Back to Start the New Year
- How the Tables Have Turned: NLRB Shifts Course Under Trump Administration
- Father Trucker: The Sixth Circuit Addresses a Truck Driver’s Discrimination Claim Premised Upon His Status as a Single Parent
- EMS Captains and Lieutenants Are Supervisors, Not “Public Employees,” Under Ohio Collective Bargaining Law
- Z&R SHORTS
Out with the Old, in with the New: A Look Forward and Back to Start the New Year
Heading into 2018, Zashin & Rich has created a checklist for employers:Policy Review:
☐ Review discrimination, harassment and retaliation policies;
☐ Review policies concerning Family and Medical Leave and disability accommodation issues;
☐ Review policies concerning pay for time worked (including reviews of pre and post shift work and meal and rest breaks);
☐ Review social media policies to ensure that they comply with recent guidance from the National Labor Relations Board (even if the company is a non-union employer);
☐ Review wage deduction policies to ensure that only proper deductions are made from employee pay; and,
☐ Update confidentiality, non-solicitation and non-compete agreements to take advantage of the Defend Trade Secrets Act.
Applications:
☐ Revise employment applications to comport with "ban the box" rules governing questions about convictions; and,
☐ Review employment application procedures to ensure that all third party background checks comply with the Fair Credit Reporting Act.
Training:
☐ Train employees, managers and supervisors about discrimination, harassment and retaliation; and,
☐ Train managers and supervisors about FMLA and ADA leaves of absences and accommodations.
Audit:
☐ Ensure that employees are properly classified as exempt or non-exempt under the Fair Labor Standards Act;
☐ Review pay practices to ensure that minorities are not statistically disadvantaged in compensation;
☐ Review workforce composition information to ensure that minorities are not statistically disadvantaged in management;
☐ Analyze health care enrollment to ensure that only eligible participants are on the company's medical plan; and,
☐ Review independent contractor classifications to ensure that those working under such arrangements are actually independent contractors.
Be sure to follow Zashin & Rich's Employment Law Quarterly to stay updated on labor and employment law developments in 2018.
*Stephen S. Zashin, an OSBA Certified Specialist in Labor and Employment Law, is the founder of the firm's Labor and Employment Groups and has extensive experience with all aspects of labor and employment law. If you have questions regarding the above checklist or any other labor or employment issues, please contact Stephen at ssz@zrlaw.com or (216) 696-4441.
How the Tables Have Turned: NLRB Shifts Course Under Trump Administration
During the Obama administration, the National Labor Relations Board ("NLRB") was a thorn in the side of many employers - overturning long-standing precedent and broadly construing the National Labor Relations Act ("NLRA") to protect employee activities and prohibit employer enforcement of commonplace employment policies. Now, under the Trump administration, the NLRB has shifted in a more employer-friendly direction. The Republican-appointed NLRB majority recently issued two decisions that dramatically altered the framework for analyzing work rules and joint employer status. Also, the NLRB's General Counsel issued a memorandum to NLRB regional directors highlighting priorities going forward, including a focus on legal issues raised "in cases of the last eight years that overruled precedent."A New Standard for Evaluating Work Rules
In recent years, many employers were frustrated and confounded by a seemingly endless string of NLRB decisions rendering work rules unlawful, including those commonly set forth in employee handbooks. In analyzing these rules, the NLRB used a standard (referred to as the Lutheran Heritage standard) that asked, in part, whether an employee would "reasonably construe" the work rule to prohibit NLRA-protected activity. The NLRB's application of this standard led to inconsistent and arbitrary results. For example, the NLRB found rules prohibiting "loud, abusive, or foul language" and an "inability or unwillingness to work harmoniously" to be unlawful, yet approved of rules prohibiting "abusive or threatening language" and "conduct that does not support the . . . [employer's] goals and objectives." The NLRB's application of the Lutheran Heritage standard "produced rampant confusion for employers" and allowed the NLRB to find neutral and innocuous work rules unlawful, without giving due consideration to legitimate business justifications underlying the rules.
Fortunately for employers, in December 2017, the NLRB overturned the Lutheran Heritage standard and adopted a new framework for analyzing work rules. See The Boeing Company, 365 NLRB No. 154 (Dec. 14, 2017). Under this new standard, the NLRB evaluates: (1) the nature and extent of the work rule's potential impact on employees' protected rights under the NLRA; and (2) the legitimate justifications associated with the work rule. In Boeing, the NLRB applied this new framework to a "no-camera rule" implemented by Boeing that restricted employee use of cell phones and other camera-enabled devices on company property. Initially, an Administrative Law Judge ("ALJ") found Boeing's no-camera rule unlawful under the Lutheran Heritage standard. Reversing the ALJ, the NLRB emphasized the "fundamental problems with the . . . application of Lutheran Heritage when evaluating the maintenance of work rules, policies and employee handbook provisions." These problems included the NLRB's failure to take into consideration legitimate justifications associated with the work rules, the false premise that employees are better served by no work rules as opposed to ones that may have some overlap with NLRA coverage, and the failure of the standard to allow the NLRB to differentiate among industries and work settings.
Applying its new standard to Boeing's no-camera rule, the NLRB held that any potential impact on Boeing's employees' exercise of protected rights under the NLRA was outweighed by the substantial and important justifications underlying the rule. These justifications included Boeing's need to maintain its security protocols, protect against the disclosure of sensitive and proprietary information (including employee personal information), and (as an aircraft manufacturer and military defense contractor) limit the risk of becoming the target of a terrorist attack.
A Return to a Prior Standard for Evaluating Joint Employer Status
In another December 2017 decision, the NLRB announced it was returning to its prior standard for evaluating whether two entities should be deemed a joint employer, and therefore, subjected to joint and several liability under the NLRA. See Hy-Brand Industrial Contractors, 365 NLRB No. 156 (Dec. 14, 2017). In 2015, the NLRB held that two entities are joint employers based on the mere existence of reserved joint control (i.e., a contractual right to exercise control), or based on "indirect" or "limited and routine" control. The NLRB could have deemed two entities joint employers even if they never actually exercised joint control over essential terms and conditions of an employee's employment. Under this broad standard, a parent company or even a client could face liability on legal obligations under the NLRA, even without exercising any control over a subsidiary's or vendor's employees.
In Hy-Brand, the NLRB rejected this standard in favor of the pre-existing joint employer test, under which "the essential element in . . . [the] analysis is whether a putative joint employer's control over employment matters is direct and immediate." In conducting this analysis, the NLRB will now focus, as it did in the past, on "whether an alleged joint employer 'meaningfully affects matters relating to the employment relationship such as hiring, firing, discipline, supervision, and direction.'" Accordingly, the mere existence of reserved control, which has not been exercised, or indirect or limited and routine control is no longer sufficient to give rise to joint employer status and joint and several liability under the NLRA.
The NLRB's General Counsel's Memorandum
Also in December 2017, the NLRB's newly-appointed General Counsel issued a memorandum to the leadership of the NLRB's regional offices, which set forth guidelines and priorities going forward. These priorities include special attention to "[s]ignificant legal issues includ[ing] cases over the last eight years that overruled precedent and involved one or more dissents." The General Counsel enumerated a number of areas of focus, including employee access to employer email to engage in union-related and other protected activity under the NLRA, off-duty employee access to employer property, work rules, and joint employer status. The NLRB has already issued decisions regarding work rules and the joint employer standard. Additional decisions from the NLRB are likely forthcoming that further revise Obama-era policies.
As demonstrated by the Boeing and Hy-Brand cases, which were decided shortly after the General Counsel issued the memorandum, a dramatic shift appears to be underway at the NLRB. Zashin & Rich will continue to report on developments from the NLRB.
*Patrick J. Hoban, an OSBA Certified Specialist in Labor and Employment Law, regularly practices before the NLRB and counsels employers regarding work rules and protected activity. If you have questions about recent developments at the NLRB, please contact Pat at pjh@zrlaw.com or (216) 696-4441
Father Trucker: The Sixth Circuit Addresses a Truck Driver’s Discrimination Claim Premised Upon His Status as a Single Parent
Most employers are familiar with prohibitions on discrimination based on an employee's race, color, religion, sex, national origin, age, and disability. As demonstrated in a recent decision by the U.S. Court of Appeals for the Sixth Circuit, however, employers also should beware of employment decisions based on other factors, including marital and familial status. See Reedy v. Rich Transp., LLC, No. 17-1085, 2017 U.S. App. LEXIS 22031 (6th Cir. Nov. 1, 2017). Although the Sixth Circuit ultimately found in favor of the employer, the Reedy decision serves as a warning to employers about actions and statements about an employee's family that could give rise to a lawsuit.In Reedy, the plaintiff, who was married but separated from his wife, had custody of their five children. During one of his shifts as a truck driver, the plaintiff left his truck at a truck stop and went home early due to a snowstorm. When his supervisor ordered him to retrieve the truck the following day, the plaintiff refused because he could not find a babysitter. His supervisor responded: "I don't give a f*** about your kids. Get your f***ing ass in that truck because that's where we need to have you." Subsequently, another one of the plaintiff's supervisors told him that, if he had known the plaintiff was a single parent, he would not have hired him. A few days later, the employer terminated the plaintiff, citing issues with his performance including his refusal to retrieve the truck as ordered.
The plaintiff then filed a lawsuit alleging his employer discriminated against him based on his status as a single parent in violation of Michigan's antidiscrimination law, which specifically prohibits discrimination based on "marital status." After the district court dismissed his discrimination claim, the plaintiff appealed to the Sixth Circuit. On appeal, the Sixth Circuit assumed the plaintiff qualified for protected status, noting that the Michigan Supreme Court has never addressed whether the State's antidiscrimination law "covers single or separated parents (or the perception of single with children while still married)."
In support of his discrimination claim, the plaintiff relied solely on his supervisors' statements. Affirming the dismissal of his claim, the Sixth Circuit held that "[t]otal reliance on statements about [the plaintiff's] status as a single parent is not sufficient evidence of motivation to terminate his employment." The court noted that the supervisors' statements, although close in time to the plaintiff's termination, were not directly linked to the decision to terminate his employment. Furthermore, the plaintiff failed to present any additional evidence to call into question the legitimacy of the employer's stated reasons for his termination, including his failure to retrieve the truck as directed.
The Sixth Circuit also found that the plaintiff failed to present evidence that the employer treated him differently on the basis of his marital status. Specifically, the plaintiff was unable to point to anyone outside his protected class who enjoyed better treatment from the employer.
While the Sixth Circuit affirmed the dismissal of the plaintiff's discrimination claim, one of the judges felt his claim should have survived. In a dissenting opinion, Judge White stated that the supervisors' troubling statements "certainly . . . [gave] rise to an inference of unlawful discrimination."
Unlike Michigan's antidiscrimination law, Title VII of the Civil Rights Act of 1964 and Ohio's antidiscrimination law do not specifically prohibit discrimination based upon "marital status" in the employment context. Nevertheless, employers in Ohio and elsewhere still should be cautious of making employment decisions based upon employee or applicant marital or familial status as local ordinances may prohibit such conduct. Also, even in the absence of a law specifically prohibiting these types of discrimination, employees may be able to bring suit against their employers for sex-based discrimination arising out of comments or actions tied to their marital or familial status. For example, an employer could give rise to a discrimination claim by asking only female job applicants whether they are married or have young children.
In sum, employees' familial obligations can present challenges for employees and their employers alike. Although the Sixth Circuit in Reedy found the comments insufficient to prove discrimination, employers should be cautious of actions and comments based on or relating to their employees' marital or familial status.
*Jessi L. Ziska recently joined Zashin & Rich in their Cleveland office and practices in all areas of labor and employment law. If you have questions regarding the Reedy decision, please contact Jessi at jlz@zrlaw.com or (216) 696-4441.
EMS Captains and Lieutenants Are Supervisors, Not “Public Employees,” Under Ohio Collective Bargaining Law
In a recent directive, the State Employment Relations Board ("SERB") provided further clarification on the types of job responsibilities that will exempt employees from collective bargaining under Ohio law. Specifically, SERB held that EMS captains and lieutenants qualified under the "supervisor" exemption of Ohio's collective bargaining law. See In re Athens County EMS Association, Case No. 2017-REP-04-0053 (Nov. 17, 2017). This latest directive follows closely on the heels of another SERB decision (which Zashin & Rich reported on here) holding that captains in a fire department fell within the "confidential" and "management" employee exemptions.Ohio Revised Code Section 4117.01 sets forth a number of exclusions from the definition of "public employee" under Ohio's collective bargaining law. If a public employee falls within one of these exclusions, then the employee is not entitled to collective bargaining rights. One such exclusion applies to "supervisors," which are defined, in part, as individuals who have the authority to "to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other public employees; to responsibly direct them; to adjust their grievances; or to effectively recommend such action, if the exercise of that authority is not of a merely routine or clerical nature, but requires the use of independent judgment." R.C. 4117.01(F).
In April 2017, a union filed a request to represent, for collective bargaining purposes, all EMTs, paramedics, lieutenants, and captains in the Athens County EMS Department. After the County Commissioners objected to this request, SERB directed the matter to its Office of General Counsel for an inquiry. SERB asked the General Counsel to determine whether the EMS captains and lieutenants were exempt from the definition of "public employees" under Ohio Revised Code Chapter 4117. On November 7, 2017, SERB's General Counsel issued findings of fact and conclusions of law, finding the captains and lieutenants qualified under the "supervisor" exemption. Subsequently, SERB adopted the General Counsel's conclusions, granted the Athens County Commissioners' objection, and denied the union's request to represent the EMS captains and lieutenants.
The Athens County EMS Department was comprised of the chief, assistant chief, five captains, two lieutenants, and 38 EMT/paramedics. Among various other duties, the captains and lieutenants were involved in hiring employees, including participating in candidate interviews and making hiring recommendations. Likewise, both the captains and lieutenants disciplined employees, including issuing verbal and written reprimands without prior approval, and developed and conducted annual performance evaluations.
In analyzing these responsibilities under R.C. 4117.01, SERB noted the captains and lieutenants did perform "duties that are routine and ministerial in nature: however, there are duties that require judgment to initiate action and utilize discretion without further review." Pointing specifically to the captains' and lieutenants' responsibilities with respect to employee performance evaluations and employee discipline through written and verbal reprimands, SERB found that the captains and lieutenants met the "supervisor" criteria as set forth in R.C. 4117.01(F). Therefore, they were exempted from the definition of "public employee" and were not entitled to collective bargaining rights under Ohio law.
As the operations of safety forces continue to develop, management must consider the structural application of their organizations. Petitions to amend existing bargaining units can be filed at SERB. Careful application of the standards and the procedural steps must be taken. These cases are fact specific, and public employers looking to amend a bargaining unit should contact counsel to evaluate the merits of doing so.
*George S. Crisci, an OSBA Certified Specialist in Labor and Employment Law, has extensive experience representing employers before SERB. If you have questions regarding this SERB decision or other collective bargaining issues, contact George at gsc@zrlaw.com or (216) 696-4441.
Z&R SHORTS
Please join Z&R in welcoming two new attorneys to its Employment and Labor Groups
Jessi L. Ziska earned her law degree, as well as certificates in both Litigation and Alternative Dispute Resolution and Health Law, from The University of Akron School of Law. Jessi was a member of the Moot Court Honor Society ("MCHS") and Trial Team. As a member of the MCHS, Jessi competed in the 2016 American Bar Association National Appellate Advocacy Competition in Boston, Massachusetts. Jessi was later elected to serve as the President of the MCHS. After her performance in Akron Law's Summer Trial Academy, Jessi was selected to join Akron Law's nationally-known Trial Team, which gave her the opportunity to compete in the 2016 Ohio Attorney General's Public Service Mock Trial Competition in Columbus. As part of Akron Law's Health Law program, Jessi completed an externship in the health law practice group of a well-established, Northeast Ohio firm. During her externship, she reviewed and revised employment agreements between physicians and hospitals, formed various corporate and non-profit entities, and ensured corporate compliance with federal and state laws.
Christopher D. Caspary's practice focuses on employment litigation and corporate employment counseling. Chris previously practiced in the areas of civil litigation and insurance defense, and appeared in courts throughout Ohio and in federal court. Chris's experience also includes taking and defending depositions, drafting pretrial motions and pleadings, and advising clients on complex legal issues. Following law school, Chris clerked for the Honorable Nancy A. Fuerst in the Cuyahoga County Court of Common Pleas, where he drafted opinions and rulings, conducted certain hearings and conferences, and provided legal recommendations to the Judge. While in law school, Chris specialized in labor and employment law, worked in the Employment Law Clinic, and externed with the Federal Trade Commission. Chris is the Vice-Chair and incoming Chair of the Cleveland Metropolitan Bar Association's Litigation Section. Chris is a member of the Cleveland Metropolitan Bar Association's Bar Admissions Committee and is a member of the William K. Thomas Inn of Court. Chris was also a delegate to the 8th Judicial District Conference in May 2015 and October 2016.
Upcoming Speaking Engagements
March 2, 2018
Jonathan J. Downes and Drew C. Piersall present "Beyond Sexual Harassment and Other Claims of Discrimination - Legal and Practical Realities" at the Ohio Municipal Attorneys Association's 2018 Spring Municipal Civil and Criminal Law Seminar at the Westin in Columbus, Ohio.
March 2, 2018
Stephen S. Zashin presents "Hearing Employment Law Cases" at The Supreme Court of Ohio Judicial College Webinar.
March 14, 2018
Patrick M. Watts presents "Conducting Harassment Investigations" at the Greater Ashtabula Chamber of Commerce in Ashtabula, Ohio.
March 19, 2018
Jonathan J. Downes presents "Legal Minefields to Avoid" at the Ohio Association of Chiefs of Police - New Chiefs' Workshop at the Crowne Plaza in Dublin, Ohio.
Friday, August 28, 2015
Whether You Knew It or Not, the NLRB Says You Just Might Be a “Joint Employer”
By Patrick J. Hoban*
Yesterday, in a 3-2 decision, the National Labor Relations Board (“NLRB”) reversed a 30-year old standard for determining joint employer status under the National Labor Relations Act (“NLRA”). In Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (Aug. 27, 2015)(“Browning-Ferris”), the NLRB considered whether a recycling company and the staffing agency it used to recruit, hire, supervise, and compensate contingent workers in its facility were joint employers for the purposes of collective bargaining. In a decision that has attracted significant national attention, the NLRB scrapped its longtime joint employer analysis and created a new joint employer test under which more companies that use staffing and subcontracting agencies to provide contingent workers will be deemed “joint employers” with the staffing and subcontracting agencies under the NLRA.
The circumstances at issue arise when a company (“User”) contracts with a staffing or subcontracting agency (“Supplier”) to provide contingent workers to perform a function the User’s employees do not perform. These arrangements may include providing temporary employees to fill short-term User needs, providing temporary employees who the User evaluates for full-time employment, or providing contingent workers on an ongoing basis to perform a task in support of the User’s operations (e.g., maintenance, housekeeping, processing). Although there is significant variation in these arrangements, the User generally sets staffing requirements and worker qualifications, and the Supplier recruits, hires, compensates, sets benefits for, and administers the employment of the contingent workers. The User typically pays a fee based on a total hourly cost of each contingent worker including compensation, benefits, and administrative costs. The Supplier may or may not provide on-site supervision of the contingent workers.
Since the early 1980s, the NLRB’s joint employer analysis focused on the extent of the actual control a User exercised over the contingent workers. To be deemed a “joint employer” with the Provider, the User had to actually exercise control over the contingent workers’ terms and conditions of employment in a “direct and immediate” manner. In other words, a User was not a joint employer if it merely exercised “limited and routine” supervision over contingent workers. Absent joint employer status, a User is not subject to a collective bargaining obligation or liability for unfair labor practices under the NLRA even if the Supplier is (and vice versa).
In Browning-Ferris, the NLRB determined that its former analysis was out of step with “changing economic circumstances.” The NLRB cited significant growth in contingent employment relationships and revised its standard to adapt to the “changing patterns of industrial life.”
Under the NLRB’s new standard, multiple entities are “joint employers” of a single workforce if (1) “they are both employers within the meaning of the common law” and (2) they “share or co-determine” matters governing the essential terms and conditions of employment. Central to both analyses is the “existence, extent and object” of a putative joint employer’s control.
Under the first prong, the “right to control” is the key and the NLRB will no longer consider whether the entity exercises that right. Therefore, if an entity reserves a contractual right to determine a specific term or condition of employment (e.g. ultimate discharge authority, job qualifications), it may have created a common law “employer” relationship with contingent workers whether it has ever exercised that right. Additionally, an entity that exercises even indirect control over terms and conditions of employment may meet the common-law employer standard (e.g., gives direction to the Supplier to discipline a contingent worker).
Under the second prong, the NLRB considers the variety of ways in which entities may “share or co-determine” the “essential terms and conditions of employment.” “Essential terms and conditions of employment” include wages, hours, hiring, firing, discipline, supervision, and direction. Evidence of an entity’s control over essential terms and conditions of employment includes: dictating the number of contingent workers supplied; controlling scheduling, seniority, and overtime; and assigning and determining the manner and method of work performance.
Through its Browning-Ferris decision, the NLRB abandoned the certainty over three decades of joint employer analysis precedent provided to most contingent worker agreements. The NLRB’s new standard will very likely impose NLRA bargaining obligations, unfair labor practice liability, and/or lawful economic protest activities (e.g., strikes, boycotts, picketing) on entities that previously were not considered joint employers by the NLRB. The decision stands to significantly affect a wide-range of common business relationships including user-supplier, lessor-lessee, parent-subsidiary, contractor-subcontractor, franchisor-franchisee, and predecessor-successor. Additionally, as the dissent warned, the new standard may render smaller employers that lie outside the NLRA’s Commerce Clause-based jurisdiction subject to the statute’s terms.
Although the NLRB recognized the almost tectonic significance of the Browning-Ferris decision, it insisted that the new standard is in full accord with the purposes of the NLRA. As the majority summarized its decision:
Employers who participate in contingent worker, subcontracting, temporary worker, and/or franchise agreements should closely examine the new standard and reevaluate the terms, benefits, and potential risks of such agreements. The examination must include a realistic assessment of the control employers retain over the terms and conditions of the contingent workforce, the potential for NLRA-based liability and alternatives that will reduce the risk of a joint employer determination under the new standard. Additionally, companies with parent/subsidiary structures should examine the relative control reserved to component entities and the risks of joint employer status.
*Patrick J. Hoban, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of private and public sector labor relations. For more information about the Browning-Ferris decision or labor & employment law, please contact Pat Hoban | pjh@zrlaw.com | 216.696.4441
Yesterday, in a 3-2 decision, the National Labor Relations Board (“NLRB”) reversed a 30-year old standard for determining joint employer status under the National Labor Relations Act (“NLRA”). In Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (Aug. 27, 2015)(“Browning-Ferris”), the NLRB considered whether a recycling company and the staffing agency it used to recruit, hire, supervise, and compensate contingent workers in its facility were joint employers for the purposes of collective bargaining. In a decision that has attracted significant national attention, the NLRB scrapped its longtime joint employer analysis and created a new joint employer test under which more companies that use staffing and subcontracting agencies to provide contingent workers will be deemed “joint employers” with the staffing and subcontracting agencies under the NLRA.
The circumstances at issue arise when a company (“User”) contracts with a staffing or subcontracting agency (“Supplier”) to provide contingent workers to perform a function the User’s employees do not perform. These arrangements may include providing temporary employees to fill short-term User needs, providing temporary employees who the User evaluates for full-time employment, or providing contingent workers on an ongoing basis to perform a task in support of the User’s operations (e.g., maintenance, housekeeping, processing). Although there is significant variation in these arrangements, the User generally sets staffing requirements and worker qualifications, and the Supplier recruits, hires, compensates, sets benefits for, and administers the employment of the contingent workers. The User typically pays a fee based on a total hourly cost of each contingent worker including compensation, benefits, and administrative costs. The Supplier may or may not provide on-site supervision of the contingent workers.
Since the early 1980s, the NLRB’s joint employer analysis focused on the extent of the actual control a User exercised over the contingent workers. To be deemed a “joint employer” with the Provider, the User had to actually exercise control over the contingent workers’ terms and conditions of employment in a “direct and immediate” manner. In other words, a User was not a joint employer if it merely exercised “limited and routine” supervision over contingent workers. Absent joint employer status, a User is not subject to a collective bargaining obligation or liability for unfair labor practices under the NLRA even if the Supplier is (and vice versa).
In Browning-Ferris, the NLRB determined that its former analysis was out of step with “changing economic circumstances.” The NLRB cited significant growth in contingent employment relationships and revised its standard to adapt to the “changing patterns of industrial life.”
The New “Joint Employer” Standard
Under the NLRB’s new standard, multiple entities are “joint employers” of a single workforce if (1) “they are both employers within the meaning of the common law” and (2) they “share or co-determine” matters governing the essential terms and conditions of employment. Central to both analyses is the “existence, extent and object” of a putative joint employer’s control.
Under the first prong, the “right to control” is the key and the NLRB will no longer consider whether the entity exercises that right. Therefore, if an entity reserves a contractual right to determine a specific term or condition of employment (e.g. ultimate discharge authority, job qualifications), it may have created a common law “employer” relationship with contingent workers whether it has ever exercised that right. Additionally, an entity that exercises even indirect control over terms and conditions of employment may meet the common-law employer standard (e.g., gives direction to the Supplier to discipline a contingent worker).
Under the second prong, the NLRB considers the variety of ways in which entities may “share or co-determine” the “essential terms and conditions of employment.” “Essential terms and conditions of employment” include wages, hours, hiring, firing, discipline, supervision, and direction. Evidence of an entity’s control over essential terms and conditions of employment includes: dictating the number of contingent workers supplied; controlling scheduling, seniority, and overtime; and assigning and determining the manner and method of work performance.
Through its Browning-Ferris decision, the NLRB abandoned the certainty over three decades of joint employer analysis precedent provided to most contingent worker agreements. The NLRB’s new standard will very likely impose NLRA bargaining obligations, unfair labor practice liability, and/or lawful economic protest activities (e.g., strikes, boycotts, picketing) on entities that previously were not considered joint employers by the NLRB. The decision stands to significantly affect a wide-range of common business relationships including user-supplier, lessor-lessee, parent-subsidiary, contractor-subcontractor, franchisor-franchisee, and predecessor-successor. Additionally, as the dissent warned, the new standard may render smaller employers that lie outside the NLRA’s Commerce Clause-based jurisdiction subject to the statute’s terms.
Although the NLRB recognized the almost tectonic significance of the Browning-Ferris decision, it insisted that the new standard is in full accord with the purposes of the NLRA. As the majority summarized its decision:
It is not the goal of joint employer law to guarantee the freedom of employers to insulate themselves from their legal responsibility to workers, while maintaining control of the workplace. Such an approach has no basis in the [NLRA] or in federal labor policy.
Employers who participate in contingent worker, subcontracting, temporary worker, and/or franchise agreements should closely examine the new standard and reevaluate the terms, benefits, and potential risks of such agreements. The examination must include a realistic assessment of the control employers retain over the terms and conditions of the contingent workforce, the potential for NLRA-based liability and alternatives that will reduce the risk of a joint employer determination under the new standard. Additionally, companies with parent/subsidiary structures should examine the relative control reserved to component entities and the risks of joint employer status.
*Patrick J. Hoban, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of private and public sector labor relations. For more information about the Browning-Ferris decision or labor & employment law, please contact Pat Hoban | pjh@zrlaw.com | 216.696.4441
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