By George S. Crisci*
In a decision released last week, the National Labor Relations Board (“NLRB) jettisoned nearly eight decades of its own precedent, ruling that an employer violates the National Labor Relations Act when it requires its employees — under threat of discipline or discharge — to attend meetings in which the employer expresses its views on unionization. In holding that these so-called “Captive Audience” meetings are unlawful, the Board unceremoniously discarded a 76-year precedent established by Babcock & Wilcox Co., 77 NLRB 577 (1948).
The Board’s hotly anticipated decision in Amazon.com Services LLC, represents a forceful crack-down on one of the most effective and commonly used tactics by private sector employers who face a union organizing drive. For decades, these “captive audience” meetings have been a fixture of union elections – an opportunity and forum in which employers can express their view of the potential negative effects that unionizing may have on the general workforce. The Board’s decision comes on the heels of a significant ruling earlier this month in Siren Retail Corp., NLRB Case No. 19-CA-290905, in which the Board overturned a nearly 40-year precedent and held that employers are no longer permitted to categorically tell workers that unionization will negatively impact their relationship with management.
The Board majority explained that captive audience meetings violate Section 8(a)(1) of the NLRA because they have a reasonable tendency to interfere with and coerce employees in the exercise of their collective bargaining rights. However, the Board majority explained that employers can still lawfully hold meetings with workers to express the employer’s views on unionization if certain guardrails are in place: (1) the workers must have advance notice of the subject of the meeting, (2) attendance must be voluntary with no adverse consequences for failure to attend, and (3) no attendance records of the meeting may be kept. The Board majority also made clear that its decision applies only prospectively, clearly a recognition that employers have reasonably relied on the Babock & Wilcox standard and the numerous NLRB decisions upholding “captive audience” meetings as permissible for nearly eight decades.
NLRB General Counsel Jennifer Abruzzo first identified “captive audience” meetings as a violation of NLRA rights in a memo issued in April 2022, signaling her intention to challenge this practice in proceedings before the Board and to ask the Board to overrule Babcock & Wilcox. Last week’s decision marks the culmination of GC Abruzzo’s efforts.
However, with the impending inauguration of President-elect Donald J. Trump on January 20,2025, GC Abruzzo’s service as the NLRB General Counsel – and her triumph today over “captive audience” meetings – are likely to be short-lived. President Biden unceremoniously terminated GC Abruzzo’s predecessor, Peter Robb, on the very afternoon of his presidential inauguration, January 20, 2021. Absent GC Abruzzo’s resignation, history is likely to repeat itself and bring a swift end to GC Abruzzo’s tenure.
Although GC Abruzzo’s successor will undoubtedly identify today’s decision on his or her agenda and ask that it be reconsidered and reversed by the Board, employers should not expect an immediate return to the Babcock & Wilcox standard in January 2025 and possibly not until after August 2026. The expirations of the five-year terms of current Board members are staggered on an annual basis, and a reversal of today’s decision will depend on new appointments by the President altering the composition of the current Board. One Board seat (held by Chair McFerran) expires next month, and President Biden has nominated her for reappointment during the current lame-duck Congress. If the Senate approves her reappointment, then the earliest that the Board composition could change from a Democratic to a Republican majority would be August 2026 because the seat that expires in 2025 is held by the only Republican Board member. If the Senate fails to reappoint Chair McFerran, then majority control could switch during the first few months of next year, when President Trump would nominate (and the Republican-majority Senate likely would confirm) replacements for the seat currently held by Chair McFerran and another vacant seat formerly held by John Ring. After that, it will take a period of time that cannot be accurately quantified for the new Republican-majority Board to identify a suitable pending case to issue a decision that reverses the Board’s decisions.
Until the Board (hopefully) restores its Babcock & Wilcox standard, employers are well-advised to refrain from holding “captive audience” meetings. Employers are still free to communicate with employees about the downsides of unionization and to express their views about organizing drives; however, employees must have advance notice of the topic of such meetings, attendance must be voluntary, and no attendance records may be kept.
*If you have questions relating to these recent NLRB decisions and the changed prohibited employer actions, please contact Zashin & Rich’s experienced Labor attorneys: George Crisci (gsc@zrlaw.com) at (216) 696-4441, and Jonathan Downes (jjd@zrlaw.com) or Scott DeHart (shd@zrlaw.com) at(614) 224-4411.
Showing posts with label NLRB. Show all posts
Showing posts with label NLRB. Show all posts
Tuesday, November 19, 2024
Monday, June 24, 2024
Supreme Court Rules Traditional Preliminary Injunction Test Applies to NLRA Section10(j) Injunctions
By George S. Crisci and Rebecca Singer-Miller*
Section 10(j) of the National Labor Relations Act (the “Act”) authorizes the National Labor Relations Board (the “NLRB”) to seek injunctive relief in federal district court against Charged Parties to stop alleged unfair labor practices while the case is being litigated at the administrative level. Under Section 10(j), a federal district court“ shall have jurisdiction to grant to the Board such temporary relief or restraining order as it deems just and proper.” A well-known instance when the NLRB seeks a Section 10(j) injunction involves reinstating a former employee allegedly unlawfully discharged during the pendency of unfair labor practice proceedings before an administrative law judge or the NLRB.
For many years, the NLRB has asserted that to obtain a Section 10(j) injunction it need only establish that: (1) there was reasonable cause to believe that unfair labor practices have occurred; and (2) injunctive relief was just and proper. Some federal appellate courts – including the Sixth Circuit Court of Appeals (whose jurisdiction includes Ohio) – have adopted this deferential standard. Other federal appellate courts, however, have required the NLRB to satisfy the stricter, traditional elements for obtaining a preliminary injunction.
On June 13,2024, the U.S. Supreme Court confirmed that the traditional four-factor preliminary injunction test applies to Section 10(j) injunctions. The Court’s decision in Starbucks Corp. v. McKinney, No. 23-367, 602 U.S. ____ (2024) resolves a circuit split as to the standard controlling the NLRB’s Section 10(j) injunction petitions. The Supreme Court’s majority opinion confirmed that, when seeking a Section 10(j) injunction, the NLRB must show by clear and convincing evidence that: (1) it is likely to succeed on the merits;(2) it is likely to suffer irreparable harm in the absences of preliminary relief; (3) the balance of equities tips in its favor; and (4) that an injunction is in the public interest.
The underlying dispute arose when several Starbucks employees invited local media to visit their Memphis, Tennessee store after hours to promote the employees’ union organization efforts. Starbucks then terminated their employment for violating company policy. The Union coordinating the Memphis store’s organization efforts filed an unfair labor practice charge with the NLRB. After the NLRB’s investigation, it issued a complaint against Starbucks and filed a Section 10(j) petition. The district court granted the injunction, and the Sixth Circuit affirmed. The injunction, among other things, required Starbucks to reinstate the terminated employees while the unfair labor practice charge against Starbucks remained pending.
The Supreme Court noted that the standard asserted by the NLRB and adopted by the Sixth Circuit is quite deferential the to the NLRB—it could establish" reasonable cause” simply by showing that its legal theory is substantial and not frivolous, and it could show relief is “just and proper” if it is necessary to return the parties to the status quo pending the Board’s proceedings so as to protect the Board’s remedial powers under the NLRA. The Supreme Court added that the Sixth Circuit’s standard “substantially lowers” the NLRB’s legal burden when it seeks a Section 10(j) injunction. Indeed, “it is hard to imagine how the Board could lose under the reasonable-cause test if courts deferentially ask only whether the Board offered a minimally plausible legal theory” while an evaluating District Court ignores conflicting laws or facts and fails to examine whether the NLRB’s theory is likely meritorious.
The Supreme Court recognized that there are circumstances where the four-factor test is not the applicable standard, but only when Congress declares so by statute. Section 10(j) lacks any specific instruction suggesting that Congress “altered the traditional equitable rules.”
This is the sticking point of the majority’s decision—Section 10(j) contains no language that could be interpreted as modifying the traditional injunction standard. Accordingly, the Court held that the traditional four factors apply when considering the NLRB’s request for a Section 10(j) injunction.
1. Agency Deference May Be Dwindling
McKinney suggests that administrative agencies, such as the NLRB, may be afforded less deference as to their interpretations of statutes. As discussed, perhaps the most important consideration when assessing the applicable injunction standard under Section10(j) was what Congress did not say. Section 10(j) itself contains no language that adopts a different standard than the traditional four-factor test.
This reasoning is reminiscent of Encino Motorcars, LLC v. Navarro, 584 U.S. 79 (2018), wherein the Court rejected the Department of Labor’s narrow construction of the FLSA in applying the overtime exemptions to service advisors within the vehicle repair industry. The Court explained: “Because the FLSA gives no ‘textual indication’ that its exemptions should be construed narrowly, ‘there is no reason to give [them] anything other than a fair (rather than a ‘narrow’) interpretation.”
The Court’s similar reasoning in McKinney may be indicative of its forthcoming decision in Relentless Inc. v. Department of Commerce, which could step away from the Chevron doctrine and further limit agency deference. In sum, these decisions remind the NLRB that it must rely on statutory text itself, rather than an overarching purpose of the statutory scheme, to support its interpretation.
2. Employers Have Multiple Grounds to Challenge Employee Reinstatement
McKinney is significant in the employee reinstatement context. The NLRB’s injunction in McKinney required, among other things, reinstatement of the terminated employees while the NLRB’s administrative complaint against Starbucks remained pending. Because the Sixth Circuit’s “reasonable cause” test was so deferential to the NLRB’s assessment of the facts and circumstances, injunctions requiring employee reinstatement were harder for employers to oppose. And, even if the NLRB or the courts later deemed the employer’s terminations to be lawful, the employer would still incur damage by reinstating and compensating a lawfully-terminated employee until the NLRB or the courts rendered that decision.
These circumstances are less likely to occur under the traditional four-factor test. Employers can challenge reinstatement on three of the four grounds. First, District Courts must examine the likelihood of the NLRB’s success on the merits. This means that employers can challenge the NLRB’s position and potentially avoid reinstating employees where the NLRB has not met its burden as to its legal theory underlying the Section 10(j) injunction.
Second, employers can challenge reinstatement on the basis of irreparable harm. Courts have declined to adopt prior NLRB arguments that irreparable harm will occur if an employee is not reinstated because other make-whole remedies exist, such as monetary remedies (including, but not limited to, back pay), which undermine the NLRB’s position when it seeks reinstatement. The NLRB has increasingly fashioned additional monetary remedies for employees where it finds employers committed violations. As such, employers can argue that irreparable harm will not occur if the employee is not, in fact, reinstated.
Third, employers may present evidence that reinstatement fails the “balance of equities” or the“ public interest” factors. Employers could present evidence that reinstatement of a particular employee would be harmful to the workplace overall, thus rendering the NLRB’s argument for reinstatement inequitable overall. For example, say an employee was fired for creating a hostile work environment in violation of company policy and another employment statute, but the NLRB challenged the termination on the basis that the behavior was protected activity under Section 7. Even though the behavior was arguably protected activity, reinstating the employee would still have a damaging effect on the work environment as a whole. Employers could argue that the NLRB’s remedy of reinstatement would be grossly inequitable for the employer, and therefore, the “balance of equities” would not be in the NLRB’s favor.
Although the NLRB now operates under a more exacting standard to obtain a Section 10(j)injunction, in no way does this invite employers to violate the NLRA and other applicable laws. Employers (including non-union employers) must continue to abide by the NLRA and be mindful of employee rights under Section 7. The NLRB may still obtain a Section 10(j) injunction if it meets the four criteria. But the impact of the injunction on employers may change based on the application of the four-factor test. Employers are strongly encouraged to maintain relationships with qualified labor and employment counsel to navigate active and potential complaints and injunction petitions by the NLRB.
*Please contact ZR Team Members George S. Crisci (gsc@zrlaw.com) and Rebecca Singer-Miller (rsm@zrlaw.com) for questions relating to Section 10(j) injunctions and other labor-related matters.
Section 10(j) of the National Labor Relations Act (the “Act”) authorizes the National Labor Relations Board (the “NLRB”) to seek injunctive relief in federal district court against Charged Parties to stop alleged unfair labor practices while the case is being litigated at the administrative level. Under Section 10(j), a federal district court“ shall have jurisdiction to grant to the Board such temporary relief or restraining order as it deems just and proper.” A well-known instance when the NLRB seeks a Section 10(j) injunction involves reinstating a former employee allegedly unlawfully discharged during the pendency of unfair labor practice proceedings before an administrative law judge or the NLRB.
For many years, the NLRB has asserted that to obtain a Section 10(j) injunction it need only establish that: (1) there was reasonable cause to believe that unfair labor practices have occurred; and (2) injunctive relief was just and proper. Some federal appellate courts – including the Sixth Circuit Court of Appeals (whose jurisdiction includes Ohio) – have adopted this deferential standard. Other federal appellate courts, however, have required the NLRB to satisfy the stricter, traditional elements for obtaining a preliminary injunction.
On June 13,2024, the U.S. Supreme Court confirmed that the traditional four-factor preliminary injunction test applies to Section 10(j) injunctions. The Court’s decision in Starbucks Corp. v. McKinney, No. 23-367, 602 U.S. ____ (2024) resolves a circuit split as to the standard controlling the NLRB’s Section 10(j) injunction petitions. The Supreme Court’s majority opinion confirmed that, when seeking a Section 10(j) injunction, the NLRB must show by clear and convincing evidence that: (1) it is likely to succeed on the merits;(2) it is likely to suffer irreparable harm in the absences of preliminary relief; (3) the balance of equities tips in its favor; and (4) that an injunction is in the public interest.
The underlying dispute arose when several Starbucks employees invited local media to visit their Memphis, Tennessee store after hours to promote the employees’ union organization efforts. Starbucks then terminated their employment for violating company policy. The Union coordinating the Memphis store’s organization efforts filed an unfair labor practice charge with the NLRB. After the NLRB’s investigation, it issued a complaint against Starbucks and filed a Section 10(j) petition. The district court granted the injunction, and the Sixth Circuit affirmed. The injunction, among other things, required Starbucks to reinstate the terminated employees while the unfair labor practice charge against Starbucks remained pending.
The Supreme Court noted that the standard asserted by the NLRB and adopted by the Sixth Circuit is quite deferential the to the NLRB—it could establish" reasonable cause” simply by showing that its legal theory is substantial and not frivolous, and it could show relief is “just and proper” if it is necessary to return the parties to the status quo pending the Board’s proceedings so as to protect the Board’s remedial powers under the NLRA. The Supreme Court added that the Sixth Circuit’s standard “substantially lowers” the NLRB’s legal burden when it seeks a Section 10(j) injunction. Indeed, “it is hard to imagine how the Board could lose under the reasonable-cause test if courts deferentially ask only whether the Board offered a minimally plausible legal theory” while an evaluating District Court ignores conflicting laws or facts and fails to examine whether the NLRB’s theory is likely meritorious.
The Supreme Court recognized that there are circumstances where the four-factor test is not the applicable standard, but only when Congress declares so by statute. Section 10(j) lacks any specific instruction suggesting that Congress “altered the traditional equitable rules.”
This is the sticking point of the majority’s decision—Section 10(j) contains no language that could be interpreted as modifying the traditional injunction standard. Accordingly, the Court held that the traditional four factors apply when considering the NLRB’s request for a Section 10(j) injunction.
McKinney’s Practical Implications
1. Agency Deference May Be Dwindling
McKinney suggests that administrative agencies, such as the NLRB, may be afforded less deference as to their interpretations of statutes. As discussed, perhaps the most important consideration when assessing the applicable injunction standard under Section10(j) was what Congress did not say. Section 10(j) itself contains no language that adopts a different standard than the traditional four-factor test.
This reasoning is reminiscent of Encino Motorcars, LLC v. Navarro, 584 U.S. 79 (2018), wherein the Court rejected the Department of Labor’s narrow construction of the FLSA in applying the overtime exemptions to service advisors within the vehicle repair industry. The Court explained: “Because the FLSA gives no ‘textual indication’ that its exemptions should be construed narrowly, ‘there is no reason to give [them] anything other than a fair (rather than a ‘narrow’) interpretation.”
The Court’s similar reasoning in McKinney may be indicative of its forthcoming decision in Relentless Inc. v. Department of Commerce, which could step away from the Chevron doctrine and further limit agency deference. In sum, these decisions remind the NLRB that it must rely on statutory text itself, rather than an overarching purpose of the statutory scheme, to support its interpretation.
2. Employers Have Multiple Grounds to Challenge Employee Reinstatement
McKinney is significant in the employee reinstatement context. The NLRB’s injunction in McKinney required, among other things, reinstatement of the terminated employees while the NLRB’s administrative complaint against Starbucks remained pending. Because the Sixth Circuit’s “reasonable cause” test was so deferential to the NLRB’s assessment of the facts and circumstances, injunctions requiring employee reinstatement were harder for employers to oppose. And, even if the NLRB or the courts later deemed the employer’s terminations to be lawful, the employer would still incur damage by reinstating and compensating a lawfully-terminated employee until the NLRB or the courts rendered that decision.
These circumstances are less likely to occur under the traditional four-factor test. Employers can challenge reinstatement on three of the four grounds. First, District Courts must examine the likelihood of the NLRB’s success on the merits. This means that employers can challenge the NLRB’s position and potentially avoid reinstating employees where the NLRB has not met its burden as to its legal theory underlying the Section 10(j) injunction.
Second, employers can challenge reinstatement on the basis of irreparable harm. Courts have declined to adopt prior NLRB arguments that irreparable harm will occur if an employee is not reinstated because other make-whole remedies exist, such as monetary remedies (including, but not limited to, back pay), which undermine the NLRB’s position when it seeks reinstatement. The NLRB has increasingly fashioned additional monetary remedies for employees where it finds employers committed violations. As such, employers can argue that irreparable harm will not occur if the employee is not, in fact, reinstated.
Third, employers may present evidence that reinstatement fails the “balance of equities” or the“ public interest” factors. Employers could present evidence that reinstatement of a particular employee would be harmful to the workplace overall, thus rendering the NLRB’s argument for reinstatement inequitable overall. For example, say an employee was fired for creating a hostile work environment in violation of company policy and another employment statute, but the NLRB challenged the termination on the basis that the behavior was protected activity under Section 7. Even though the behavior was arguably protected activity, reinstating the employee would still have a damaging effect on the work environment as a whole. Employers could argue that the NLRB’s remedy of reinstatement would be grossly inequitable for the employer, and therefore, the “balance of equities” would not be in the NLRB’s favor.
Closing Thoughts
Although the NLRB now operates under a more exacting standard to obtain a Section 10(j)injunction, in no way does this invite employers to violate the NLRA and other applicable laws. Employers (including non-union employers) must continue to abide by the NLRA and be mindful of employee rights under Section 7. The NLRB may still obtain a Section 10(j) injunction if it meets the four criteria. But the impact of the injunction on employers may change based on the application of the four-factor test. Employers are strongly encouraged to maintain relationships with qualified labor and employment counsel to navigate active and potential complaints and injunction petitions by the NLRB.
*Please contact ZR Team Members George S. Crisci (gsc@zrlaw.com) and Rebecca Singer-Miller (rsm@zrlaw.com) for questions relating to Section 10(j) injunctions and other labor-related matters.
Thursday, May 27, 2021
EMPLOYMENT LAW QUARTERLY | Volume XXIII, Issue i
- Breathe Easy: With Vaccinations on the Rise, Ohio Rescinds COVID-19 Health Orders on June 2nd
- Coming Soon: Covered Employers Must File EEO-1 Component 1 Reports by July 19, 2021
- Zip It: NLRB Provides Guidance on Confidential Investigations
- To Pay or Not to Pay: DOL’s Opinion On Employee Travel and Training Time
- Z&R SHORTS
Breathe Easy: With Vaccinations on the Rise, Ohio Rescinds COVID-19 Health Orders on June 2nd
On May 12th, Governor DeWine announced that, effective June 2nd, Ohio will rescind the majority of its COVID-19 health orders. Accordingly, with limited exceptions, Ohio will no longer mandate the use of masks and social distancing, nor impose COVID-related capacity restrictions. Despite the State lifting its orders, businesses still may voluntarily continue to require mitigation measures. As Governor DeWine explained, “[l]ifting these health orders will not prevent a business from imposing its own requirements. In fact, based upon the experiences of other states, we expect that many stores or businesses may require social distancing and masking.”
Following Governor DeWine’s announcement, the Centers for Disease Control and Prevention (“CDC”) issued interim recommendations on May 13th (available here) stating that, in non-healthcare settings, fully vaccinated people can resume activities without wearing masks or social distancing. In response, Governor DeWine instructed the Director of Ohio’s Department of Health to amend existing orders in accordance with the CDC’s guidance. That amended order (available here) provides, among other things, that fully vaccinated people are no longer required to wear masks with limited exceptions, e.g. public transportation, and can resume activities without social distancing.
Ohio’s lifting of its COVID-19 health orders is a promising sign that the worst of the pandemic is behind us. However, Ohio employers now must decide what mitigation measures, if any, they wish to maintain. This presents a challenging decision, and employers should consider consulting with counsel on effective approaches for revising and communicating changes to their COVID-19 policies and procedures.
*Scott H. Dehart, a member of the firm’s Columbus office, practices in all areas of labor and employment law. If you have questions about Ohio’s pandemic health orders or the impact of COVID-19 on your workplace, please contact Scott at shd@zrlaw.com or (614) 224-4411.
Coming Soon: Covered Employers Must File EEO-1 Component 1 Reports by July 19, 2021
The Equal Employment Opportunity Commission (“EEOC”) collects annual workforce demographic information from covered employers. However, due to the pandemic, the EEOC did not collect data last year. On March 19, 2021, the EEOC announced it was accepting EEO-1 Component 1 Reports (“EEO-1”) and that covered employers must file their 2019 and 2020 data by July 19, 2021.
What is an EEO-1?
The EEO-1 is an annual report the EEOC requires covered employers to file that includes demographic data for employees sorted by job category, ethnicity, race, and gender. Title VII of the Civil Rights Act of 1964 requires the filing. Last year was the first time the EEOC did not require covered employers to file a report.
Which Employers Are Covered?
The EEOC requires private employers with at least 100 employees to file an EEO-1. In addition, federal contractors with more than 50 employees that are not exempt under 41 CFR 60-1.5 must file an EEO-1.
How Long Will Employers Have to File an EEO-1?
The EEOC is accepting EEO-1s now, and employers must file their EEO-1s by July 19, 2021. This year’s EEO-1 filing period differs from years past, as the EEOC usually only allows employers 10 weeks to file. However, the EEOC recognized the COVID-19 pandemic’s impact on the workforce and extended the deadline by two weeks to ensure employers have time to provide accurate and reliable data.
How do Employers File?
Covered employers should visit the EEOC’s EEO-1 website which can be accessed here. Prior to filing, employers should have received 2019 and 2020 EEO-1 notification letters via U.S. mail that should have contained the “Company ID” and “Passcode” employers need to create user accounts.
Employers can file an EEO-1 either: (1) by entering the data into a secure form available at https://eeocdata.org/eeo1/signin; or (2) by uploading a data file using an EEOC-approved format available at https://eeocdata.org/eeo1.
Employers should be aware that they must file an EEO-1 for each year they were in business and met the filing requirement. Due to the pandemic, this year’s collection includes 2019 and 2020 data. Covered employers must file two EEO-1 reports beginning with 2019. The EEOC will certify the 2019 report and then employers can file their 2020 report.
Employers that have not received notification letters or that have questions about filing an EEO-1, including eligibility, should contact counsel or visit EEO-1 Help for more information.
*Tiffany S. Henderson practices in all areas of labor and employment law. If you have questions about the EEO-1 or any employment law questions, please contact Tiffany at tsh@zrlaw.com or (216) 696-4441.
Zip It: NLRB Provides Guidance on Confidential Investigations
Maintaining confidentiality during a workplace investigation may seem like a common-sense practice to help ensure the integrity of the investigation. Yet, directing employees to do so can give rise to allegations of interference with employee rights under the National Labor Relations Act (“NLRA”). Fortunately, in a recent decision, the National Labor Relations Board (“NLRB”) reinforced employers’ ability to issue reasonable directives to employees on maintaining confidentiality during workplace investigations.
In Alcoa Corp., 370 NLRB No. 107 (2021), an employer received reports that one of its employees made racially offensive comments and engaged in other disrespectful behavior. The employer began an investigation which included interviewing employees. During those interviews, a representative for the employer told each employee “to keep in mind that their interview conversation was confidential, to keep the conversation confidential, including from supervisors and other employees, and to decline to answer if others asked about the conversation.”
Based on the results of the investigation, the employer terminated the employee who made the offensive comments. The union representing the employee subsequently filed an unfair labor practice charge alleging, among other things, that the employer violated the NLRA by instructing employees to keep their interviews confidential.
Initially, an Administrative Law Judge (“ALJ”) found in favor of the union. As to the confidentiality directives, the ALJ held the employer unlawfully interfered with employees’ “right to discuss a workplace disciplinary matter.” The ALJ emphasized that the employer did not expressly advise the employees that they could discuss the interviews once the investigation ended. The employer appealed the ALJ’s decision to the NLRB.
In its decision, the NLRB reversed the ALJ and held the employer’s confidentiality directives were lawful. The NLRB relied on its recent decision in Apogee Retail LLC d/b/a Unique Thrift Store, 368 NLRB No. 144 (2019), which overruled prior holdings prohibiting employers from restricting discussion of ongoing investigations unless they could make “a particularized showing of a substantial and legitimate business justification.” Instead, the NLRB held that investigative confidentiality rules, that by their terms apply only for the duration of any investigation, are categorically lawful.
In support of its finding, the NLRB noted that no evidence or allegation existed that: (1) the employer’s directives were given pursuant to a general company policy or rule; (2) the directives applied to anyone other than the employees interviewed during the investigation; or (3) the directives prevented those employees, or any other employees, from discussing the events giving rise to the investigation. Notably, the NLRB disagreed with the ALJ’s conclusion that the employer had to provide an express statement that employees could talk with others about the interviews once the investigation ended. Under the circumstances, the NLRB found that the employees would have reasonably understood that the confidentiality instruction lasted only through the duration of the investigation.
The NLRB’s decision in Alcoa Corp. reinforces employers’ ability to provide reasonable confidentiality directives to employees that interviewed as part of an internal investigation. In doing so, employers should not restrict employees’ ability to discuss the events giving rise to the investigation, or their ability to discuss the interviews once the investigation has ended. When conducting workplace investigations, employers should consider consulting legal counsel for advice on conducting them effectively while avoiding potential claims by employees or their unions.
*Jantzen D. Mace, a member of the firm’s Columbus office, practices in all areas of labor and employment law. For more information about workplace investigation issues, please contact Jantzen at jdm@zrlaw.com or (614) 224-4411.
To Pay or Not to Pay: DOL’s Opinion On Employee Travel and Training Time
The Department of Labor’s Wage and Hour Division (“WHD”), recently issued two opinion letters interpreting the Fair Labor Standards Act’s (“FLSA”) compensation requirements for work-related travel and voluntary training hours. Specifically, the WHD examined three work-related travel scenarios for a construction company’s non-exempt foremen and laborers, and six voluntary training or continuing education scenarios for a hospice care provider’s non-exempt employee. This article summarizes the WHD’s opinion letters to help employers gain a better understanding of their FLSA obligations in comparable scenarios.
Work-Related Travel
In its recent opinion letter, the WHD addressed the following scenarios:
- Local Job Site: The foremen of a construction company must first retrieve a company truck from the employer’s principal place of business, drive it to a local job site, and then return the truck at the end of the day.
- Remote Job Site (1.5 – 4 hours of travel time): The employer pays for hotel accommodations and per-diem meal stipends for employees working at the job site. Each foreman retrieves a company truck from the employer’s principal place of business at the beginning of the job, drives it to the job site, and returns it at the end of the job. Laborers can drive their personal vehicles to and from the job site at the beginning and end of the job; or they can drive their personal vehicles to the principal place of business and ride to and from the job site with the foremen.
- Remote Job Site (1.5 – 4 hours of travel time): Same facts of the second scenario except the laborers choose to travel to and from the job site each day instead of staying at the hotel.
1) “an intrinsic element” of the employee’s principal activities; and
2) one the employee “cannot dispense [with] if he is to perform his principal activities.”
Integrity Staffing Solution, Inc. v. Busk, 135 S. Ct. 513, 518-19 (2014).
The WHD concluded that in each of the three scenarios, the foremen’s travel time to and from the employer’s principal place of business with the company truck is both integral and indispensable to their principal activities because (1) the employer mandates the pickup and return of the company truck as part of the foremen’s job responsibilities; and (2) the principal activities at the construction site require the company truck. Accordingly, the foremen’s travel time in the company truck to and from the employer’s principal place of business is compensable travel time under the FLSA regardless of jobsite location.
Employer compensation requirements under the FLSA for employee travel time to remote job sites in another city depend on when and how employees travel. If an employee’s travel time is for a special one-day assignment, then the travel is compensable worktime. In these situations, the FLSA permits employers to account for the actual travel time or the average commute time that the employee would have used to travel to their usual work site and deduct it from the compensable travel time. Similarly, if an employer offers transportation but the employee chooses to utilize their own transportation, the employer can calculate compensable travel time with either (1) the amount of time the employee spent traveling; or (2) the amount of time that would have accrued using the employer’s offered transportation. If the travel keeps an employee away from home overnight, then travel that occurs during the employee’s normal working hours, even during typical nonwork days, is compensable work time because the travel is in place of the employee’s normal duties. On the other hand, travel that occurs after the employer relieves the employee for long enough “to use the time effectively for [the employee’s] own purposes” is not compensable, even if the employee uses the time to travel to an employer-provided lodging accommodation or to the employee’s home multiple hours away. 29 C.F.R. § 785.16(a).
Applying these principles to the second scenario, the WHD concluded that the laborer’s travel time to a remote jobsite is not compensable under the FLSA, unless the travel occurs during the laborer’s normal working hours. Further, the FLSA considers the travel time occurring between the jobsite and the hotel at the beginning or the end of the workday as part of the everyday commute, which is not compensable travel time. Additionally, since laborers have the option to travel to and from the job site with the foremen, the employer may choose to calculate the laborer’s compensable travel time using either the time that would have accrued if the laborer rode with the foremen or the laborers actual compensable travel time.
The WHD reached the same conclusion for the laborer’s travel time in the third scenario. When a laborer chooses to forego the hotel accommodation and drive between the remote job site and their home each day, the laborer is traveling during their personal time after the employer has relieved the laborer for the day. Therefore, the laborer’s travel time is not compensable under the FLSA.
Voluntary Training Time
The WHD, in its recently issued opinion letter, states that according to the FLSA, employee “attendance at lectures, meetings, training programs and similar activities” is not compensable working time if it meets all four of the following criteria:
(a) Attendance is outside of the employee’s regular working hours;
(b) Attendance is voluntary;
(c) The course, lecture, or meeting does not directly relate to the employee’s job; and
(d) The employee does not perform any productive work during such attendance.
29 C.F.R. 987 § 785.27. Generally, training time that fails to meet any one of the above four criteria is compensable work time. However, the WHD recognizes two “special situation” exceptions to this general rule even when the training directly relates to the employee’s job. If an employee attends (1) a course offered by an independent bona fide institution of learning related to the employee’s job; or (2) an independent school, college or independent trade school to take courses related to the employee’s job, that time is not compensable for FLSA purposes so long as the other three criteria apply. If an employer mandates training, if the training (voluntary or not) occurs during regular working hours, or the employee performs productive work for the employee’s job duties during the training, then the training is compensable as work time. Employers may, however, establish policies prohibiting employees from participating in training courses during regular working hours.
In each of the following scenarios, the WHD assumed that employee attendance was voluntary, and that the employee did not perform any productive work.
Scenario 1: A nurse participates in an on-demand webinar after working hours that directly relates to the nurse’s job and counts towards professional licensing requirements. The WHD concluded that this scenario is exempt as a special situation for a course offered by an independent bona fide institution of learning related to the employee’s job. Thus, the voluntary training time is not compensable. The WHD also noted that the special exception applies regardless of whether the course is offered by the employer or by a third party.
Scenario 2: An accounting clerk participates in an on-demand webinar after working hours that directly relates to the clerk’s job but has no continuing education component. The WHD stated that it did not have sufficient facts to issue an opinion because it could not determine whether an independent bona fide institution offered the training course. If an independent bona fide institution of learning offered the training course, the employee’s time is exempt as a special situation. Otherwise, the training is compensable for FLSA purposes.
Scenario 3: An accounting clerk participates in an on-demand webinar during working hours that directly relates to the clerk’s job but has no continuing education component. The WHD concluded this is compensable training time because the training takes place during working hours.
Scenario 4: An accounting clerk participates in an on-demand webinar during working hours that does not directly relate to the clerk’s job and has no continuing education component. The WHD concluded this is compensable training time because the training takes place during working hours.
Scenario 5: A nurse participates in an on-demand webinar during working hours that directly relates to the nurse’s job and counts toward professional licensing requirements. The WHD concluded this is compensable training time because the training takes place during working hours.
Scenario 6: A nurse participates in an out-of-state weekend conference that has some topics relating directly to the nurse’s job and professional licensing requirements and some topics that don’t. Travel time to the conference occurs during some of the nurse’s normal work hours, but the conference occurs outside of the nurse’s normal work schedule. The WHD concluded that the training time is exempt as a special situation and not compensable time. Additionally, the WHD stated that since the conference is not compensable work hours, travel to and from the conference is personal non-compensable travel time.
While the above referenced opinion letters provide some helpful interpretation of employer requirements, they are not the law. If you have questions about your obligations, please contact counsel, as even small FLSA compliance errors can create significant liability.
*Lauren M. Drabic regularly advises clients on labor and employment matters, including FLSA compliance. If you have questions about wage and hour issues, please contact Lauren at lmd@zrlaw.com or (216) 696-4441.
Z&R SHORTS
Please join Z&R in congratulating Jzinae N. Jackson
Z&R is proud to congratulate Jzinae N. Jackson, a Stokes Scholar Alumni, on joining the Cleveland Metropolitan Bar Association’s Louis Stokes Scholars Advisory Committee, which is committed to expanding diversity in the legal profession. To learn more about the Stokes Scholars Program and to read a recent feature on Jzinae by Court News Ohio, please click here.Upcoming Speaking Engagements
June 2, 2021
Ryan C. Spitzer presents “CBD Products, Hemp and Employee Positive Drug Tests” for the Ohio Municipal Attorneys Association. Registration information for this webinar can be found via the following link: https://www.anymeeting.com/AccountManager/RegEv.aspx?PIID=E053DC80824F3E
June 26, 2021
Jonathan J. Downes presents “Budgets, Revenues, Expenditures – Oh My!” at the 2021 Ohio Prosecuting Attorneys Association Summer Workshop. Information regarding the OPAA Summer Workshop can be found via the following link: http://www.ohiopa.org/training/summer2021.html
September 14, 2021
Jonathan J. Downes presents “Bargaining for Results: Achieving Agreement while Maintaining Flexibility for Management” for the Ohio Association of Chiefs of Police in Hilliard, Ohio. Information regarding this full-day workshop can be found via the following link: https://oacp.org/bargaining-results2021/
Monday, March 2, 2020
A Win for Employers: NLRB Issues Long-Awaited Final Rule Governing Joint-Employer Status
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.
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.
Thursday, December 19, 2019
EMPLOYMENT LAW QUARTERLY | Volume XXI, Issue iv
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In a recent win for employers, the National Labor Relations Board (“NLRB”) ruled that if a nonemployee is engaged in protests, picketing, or boycotts on an employer’s property, the employer can have the nonemployee removed and bar the nonemployee from the property. Kroger Limited Partnership I Mid-Atlantic, 368 NLRB 64 (2019). This is true even if the employer allows non-protesters on its property for certain types of other activities, such as collecting donations.
The Kroger case arose after managers of a supermarket called the police to remove nonemployee union representatives from the supermarket’s parking area. The union representatives were collecting customers’ signatures for a petition protesting the transfer of union members employed by the supermarket. The supermarket previously permitted other groups and organizations to utilize the parking area to collect donations and provide information to customers. Accordingly, a NLRB Administrative Law Judge (“ALJ”) found that the supermarket illegally discriminated against the union representatives by singling them out and barring them from obtaining signatures merely because they were union representatives.
On appeal, the NLRB reversed the ALJ’s decision and found that the ALJ improperly relied upon a 1999 decision that contained a flawed and overly broad definition of “discrimination.” The NLRB clarified that under the appropriate standard, discrimination is defined as “unequal treatment by employers of activities that are ‘similar in nature.’” Using this standard, the NLRB held that employers may bar someone who is protesting, picketing, or boycotting from employer property while still permitting non-protesters on the property. Importantly, the NLRB ruled that employers specifically can bar nonemployees from access to company property for union purposes so long as the employer also bars “comparable organizational activities” by nonunion groups.
In reaching its decision, the NLRB explained that protesting and boycotting are not sufficiently similar activities to charitable, civic, or commercial activities. Without the sufficiently similar link, no finding of discrimination based on disparate treatment can occur. To successfully argue discrimination based on disparate treatment, the union would need to prove that the supermarket previously allowed other nonemployees to encourage customers to boycott or protest the store.
This NLRB decision provides significant reinforcement of employer property rights and useful clarification as to what constitutes discrimination against union representatives. As the NLRB continues to define employer rights, employers should consult with counsel regarding the legal implications of their actions, including enforcing their property rights.
*Patrick J. Hoban, an OSBA Certified Specialist in Employment and Labor Law, regularly represents employers before the NLRB. If you have questions about this NLRB decision or employer rights more generally, please contact Pat at pjh@zrlaw.com or (216) 696-4441.
Biometric technology involves the use of body measurements and calculations of physical characteristics, such as a person’s fingerprint, voiceprint, or face scan, for identification, security, and other purposes. The use of biometric technology to monitor and manage employer workforces has become increasingly common, especially for time-tracking purposes. As technology and the law develop, employers that use or plan to use biometric technology should pay close attention to privacy laws that implicate the use of biometric technology. Although Ohio has not enacted a law governing employers’ use of biometric technology, court decisions applying laws in other states have illustrated the issues and liabilities facing employers in this evolving area.
For example, a federal district court rejected an employer’s attempt to dismiss an employee’s lawsuit alleging violations of Illinois’ Biometric Information Privacy Act (“BIPA”). Rogers v. CSX Intermodal Terminals, Inc., No. 1:19 C 2937, 2019 U.S. Dist. LEXIS 151135 (N.D. Ill. Sep. 5, 2019). BIPA requires private employers in Illinois to protect employees’ “biometric identifiers,” i.e., “retina or iris scans, fingerprints, voiceprints, or scans of hand or face geometry,” and employee’s “biometric information,” which includes any information, regardless of how it is captured, that is based on an individual’s biometric identifier and is used to identify an individual. The law specifically requires employers to: (1) provide prior notice of the purpose for which the data is collected and the length of time that it will be used or stored; (2) establish a written policy explaining the retention schedule and develop guidelines for permanently destroying the information; and (3) obtain written consent before collecting biometric information. For negligent violations, employers may have to pay liquidated damages of $1,000 or actual damages, whichever is greater. Intentional or reckless violations may result in liquidated damages of $5,000 or actual damages, whichever is greater.
In Rogers, the employer required its truck drivers to scan their fingerprints to gain access to its facilities in order to pick up and deliver freight. According to the lawsuit, prior to obtaining and using its employees’ fingerprints, the employer did not provide notice or a written policy, nor did the employer obtain employees’ written consent. Based on these allegations, one of the company’s former truck drivers filed a class action lawsuit alleging violations of BIPA. In response, the employer filed a motion to dismiss arguing, in part, that the employee’s rights were not violated because he voluntarily provided his fingerprints.
Relying on a recent decision by the Illinois Supreme Court, the Rogers Court rejected the employer’s arguments and explained that the purpose of BIPA is to impose safeguards before problems occur. Notably, in order to assert a viable claim under BIPA, the Court held “an individual need not allege some actual injury or adverse effect, beyond a violation of his or her rights under BIPA.” Accordingly, even though the employee knew his fingerprints were being collected and could have withheld his consent if he wanted, the Court found this to be irrelevant to the issue of whether he could pursue a claim for a violation of his rights. The Court noted that “biometrics are unlike other unique identifiers because they are biologically unique to the individual and once compromised, the individual has no recourse.”
The Rogers decision provides important guidance for employers as to the potential risks associated with the use of employee biometric data. Other states, including Texas and Washington, have statutes similar to BIPA which govern the use of biometric data. In addition, it is likely that more states will implement similar laws. To ensure compliance with these laws, employers should consult with counsel and consider implementing safeguards. This may include developing and maintaining a written policy governing the use and storage of biometric data, explaining the purpose for using the data, and setting forth a schedule for the retention and destruction of the data. Likewise, prior to collecting any biometric data, employers should provide written notice to employees and obtain employees’ written consent to collect and use their biometric data. Employers also should develop security procedures to protect employee information, including implementing safeguards and protocols in the event of a data breach. Even in states that currently lack laws directly governing the use of employee biometric data, employers may reduce the risk of future litigation by applying these tips.
*Tiffany S. Henderson practices in all areas of labor and employment law. If you have questions about biometric information or other employment issues, please contact Tiffany at tsh@zrlaw.com or (216) 696-4441.
On September 18, 2019, California Governor Gavin Newsom signed into law a bill limiting when businesses and companies can classify employees as independent contractors. “Assembly Bill 5 is landmark legislation for workers and our economy. It will help reduce worker misclassification – workers being classified as ‘independent contractors’ rather than employees,” Governor Newsom said. The author of Assembly Bill 5, Assemblywoman Lorena Gonzalez of San Diego, said in a statement: “As one of the strongest economies in the world, California is now setting the global standard for worker protections for other states and countries to follow.”
But not everyone is happy. Gig companies like Uber, Lyft, and DoorDash, which rely on thousands of independent contractors, plan to spend upwards of $90 million combined on a ballot initiative to overturn the law. While this is no small price, the companies could ultimately spend much more if forced to reclassify their workers as employees who are entitled to set wages and benefits.
Assembly Bill 5, effective January 1, 2020 codifies the California Supreme Court’s 2018 decision in Dynamex Operations West v. Superior Court, 4 Cal. 5th 903 (2018). The Dynamex lawsuit involved claims that the company unlawfully classified its delivery drivers as independent contractors as the company previously classified drivers as employees. The Court applied the “ABC test” and ruled in the drivers’ favor, finding that companies could no longer reclassify workers at their discretion. With the signing of Assembly Bill 5, the ABC test became a state-mandated test for worker classification in California.
Under the ABC test, workers are presumed employees unless they pass each of the three branches of the test: (A) the worker is free from the control and direction of the hiring entity in connection with the performance of the work; (B) the worker performs work outside the usual course of the hiring entity’s business; and (C) the worker is customarily engaged in an independently-established trade, occupation, or business of the same nature as the work performed. If the worker “passes” these three requirements, then a company can classify them as an independent contractor.
A number of professions are exempt from reclassification under this new law, including cosmetologists, commercial fishermen, and real estate agents. Importantly, this list does not include gig workers. Additionally, the California legislature approved a companion bill, Assembly Bill 170, which offers a one-year exemption for newspaper distributors and carriers who are under contract with a publisher. Governor Newsom approved the bill on October 2, 2019 and signed it into law in the same week as a number of other worker-friendly laws aimed at improving worker conditions and combating sexual harassment at work.
These new laws also end mandatory arbitration provisions in California workers’ contracts. Assembly Bill 51 now makes it a criminal misdemeanor to require workers to waive their right to sue over violations of employment statutes as a condition of employment. Also among the bills signed into law are Assembly Bill 547 and Senate Bill 530, which require state agencies to create sexual violence and harassment prevention training requirements in the construction industry and for janitorial employers. The Governor also approved other bills including: Senate Bill 142, which requires employers to provide a lactation room for mothers, and Assembly Bill 9, which extends the deadline to file workplace harassment or discrimination claims from one year to three years. This series of pro-worker laws came just weeks after Governor Newsom signed Assembly Bill 5.
While Assembly Bill 5 only applies in California, both labor groups and gig companies anticipate it having national implications. Ohio, like many other states, uses a “totality of the circumstances” multi-factor analysis to determine whether an employer may classify a worker as an independent contractor. Ohio courts look to the following six factors: (1) the permanency of the relationship; (2) the degree of skill required; (3) the worker’s investment in equipment; (4) the worker’s opportunity for profit or loss; (5) the degree of the employer’s control; and (6) whether the service rendered is integral to the employer’s business. With the signing of Assembly Bill 5, employers in Ohio and other states should collaborate closely with employment counsel as worker classification laws continue to develop.
*Jantzen D. Mace, a member of the firm’s Columbus office, practices in all areas of labor and employment law. For more information about worker classification or other labor and employment issues, please contact Jantzen at jdm@zrlaw.com or (614) 224-4411.
At the beginning of the New Year, several states, including Ohio, will increase their minimum wage. In Ohio, the minimum wage will increase by fifteen cents per hour from $8.55 to $8.70 for non-tipped employees and by five cents per hour from $4.30 to $4.35 for tipped employees. Ohio’s law applies to employers with gross revenue of $319,000.00 or more. Ohio employers grossing less than $319,000.00 are only required to pay the federal minimum wage, which is $7.25 per hour for non-tipped employees and $2.13 per hour for tipped employees. Additionally, Ohio employers only are required to pay minors age fifteen or younger the federal minimum wage.
Some states will not wait for the New Year to increase wages. On December 31, 2019, New York fast food employees outside of New York City will see a minimum wage increase to $13.75 per hour, and other New York employees will see an increase to $11.80 per hour. Other states will see increases later in 2020. For example, Delaware’s minimum wage will increase to $9.75 per hour on October 1, 2020.
Recently, states have been moving towards the “Living Wage” and “$15 Minimum Wage Initiative.” A number of states, including California, Maryland, Massachusetts, New Jersey, and New York have passed bills that will increase their minimum wage to approximately $15.00 per hour in the coming 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 increases to state minimum wages in 2020 (unless otherwise noted, all increases are effective January 1, 2020):
*Julia G. Ross practices in all areas of labor and employment law. For more information about minimum wage and other wage and hour questions, please contact Julia at jgr@zrlaw.com or (216) 696-4441.
David Posner is a trial lawyer that has litigated numerous jury trials to completion during his illustrious career. For over 30 years, he has represented publicly-traded and privately-owned companies in all aspects of employment and labor law including discrimination, retaliation, harassment, wrongful discharge, and wage and hour matters. He has extensive experience litigating cases involving the misappropriation of trade secrets and violations of non-compete and non-solicitation agreements under state and federal law. David also has a broad range of experience counselling employers and drafting employment related agreements. David is certified by the Ohio State Bar Association as a specialist in Labor and Employment Law. Best Lawyers in America© has recognized him in the areas of labor and employment litigation as well as management-side employment law. He is a recognized practitioner in labor and employment law in Ohio by Chambers USA and has been named a “Super Lawyer” since 2012.
Julia Ross practices out of Z&R’s Cleveland office. She represents public and private sector employers in all aspects of labor and employment law. Julia graduated from the University of Rochester in 2016 and received her Juris Doctor from Case Western Reserve University School of Law in 2019. As a law student, Julia was an Executive Notes Editor for Health Matrix: Journal of Law-Medicine, was the President of the Jewish Law Students Association, and worked in the public, private, and health-care law sectors with a focus on employment law. Julia was also the Noah Webster Law Scholar and the Eudese and Elmer Paull Prize Winner.
Jantzen Mace practices out of Z&R’s Columbus office. His practice encompasses all aspects of labor and employment law. Jantzen graduated from Miami University (OH) in 2012 and received his Juris Doctor from the Ohio State University Moritz College of Law in 2019. As a law student, Jantzen earned a Certificate in Alternative Dispute Resolution through his completion of additional classes and work experience in Arbitration, Negotiation, and Mediation.
April 17, 2020
Jonathan J. Downes presents “Workplace Challenges: Civility, Bullying, Harassment, and Discrimination” at the State Personnel Board of Review (“SPBR”) Conference. The SPBR Conference will take place at the Crowne Plaza Columbus North-Worthington in Columbus, Ohio. Information regarding the SPBR Conference can be found here.
- Access Denied: NLRB Allows Employers to Bar Nonemployees Access to Property for Protests, Picketing, or Boycotts
- Fingerprints and Legal Settlements: The Evolving Law of Biometric Technology
- Get “Giggy” With It: California Governor Signs Worker Misclassification Bill into Law
- New Year, New Wages: Minimum Wage Increases in Several States
- Z&R SHORTS
Access Denied: NLRB Allows Employers to Bar Nonemployees Access to Property for Protests, Picketing, or Boycotts
By Patrick J. Hoban*In a recent win for employers, the National Labor Relations Board (“NLRB”) ruled that if a nonemployee is engaged in protests, picketing, or boycotts on an employer’s property, the employer can have the nonemployee removed and bar the nonemployee from the property. Kroger Limited Partnership I Mid-Atlantic, 368 NLRB 64 (2019). This is true even if the employer allows non-protesters on its property for certain types of other activities, such as collecting donations.
The Kroger case arose after managers of a supermarket called the police to remove nonemployee union representatives from the supermarket’s parking area. The union representatives were collecting customers’ signatures for a petition protesting the transfer of union members employed by the supermarket. The supermarket previously permitted other groups and organizations to utilize the parking area to collect donations and provide information to customers. Accordingly, a NLRB Administrative Law Judge (“ALJ”) found that the supermarket illegally discriminated against the union representatives by singling them out and barring them from obtaining signatures merely because they were union representatives.
On appeal, the NLRB reversed the ALJ’s decision and found that the ALJ improperly relied upon a 1999 decision that contained a flawed and overly broad definition of “discrimination.” The NLRB clarified that under the appropriate standard, discrimination is defined as “unequal treatment by employers of activities that are ‘similar in nature.’” Using this standard, the NLRB held that employers may bar someone who is protesting, picketing, or boycotting from employer property while still permitting non-protesters on the property. Importantly, the NLRB ruled that employers specifically can bar nonemployees from access to company property for union purposes so long as the employer also bars “comparable organizational activities” by nonunion groups.
In reaching its decision, the NLRB explained that protesting and boycotting are not sufficiently similar activities to charitable, civic, or commercial activities. Without the sufficiently similar link, no finding of discrimination based on disparate treatment can occur. To successfully argue discrimination based on disparate treatment, the union would need to prove that the supermarket previously allowed other nonemployees to encourage customers to boycott or protest the store.
This NLRB decision provides significant reinforcement of employer property rights and useful clarification as to what constitutes discrimination against union representatives. As the NLRB continues to define employer rights, employers should consult with counsel regarding the legal implications of their actions, including enforcing their property rights.
*Patrick J. Hoban, an OSBA Certified Specialist in Employment and Labor Law, regularly represents employers before the NLRB. If you have questions about this NLRB decision or employer rights more generally, please contact Pat at pjh@zrlaw.com or (216) 696-4441.
Fingerprints and Legal Settlements: The Evolving Law of Biometric Technology
By Tiffany S. Henderson*Biometric technology involves the use of body measurements and calculations of physical characteristics, such as a person’s fingerprint, voiceprint, or face scan, for identification, security, and other purposes. The use of biometric technology to monitor and manage employer workforces has become increasingly common, especially for time-tracking purposes. As technology and the law develop, employers that use or plan to use biometric technology should pay close attention to privacy laws that implicate the use of biometric technology. Although Ohio has not enacted a law governing employers’ use of biometric technology, court decisions applying laws in other states have illustrated the issues and liabilities facing employers in this evolving area.
For example, a federal district court rejected an employer’s attempt to dismiss an employee’s lawsuit alleging violations of Illinois’ Biometric Information Privacy Act (“BIPA”). Rogers v. CSX Intermodal Terminals, Inc., No. 1:19 C 2937, 2019 U.S. Dist. LEXIS 151135 (N.D. Ill. Sep. 5, 2019). BIPA requires private employers in Illinois to protect employees’ “biometric identifiers,” i.e., “retina or iris scans, fingerprints, voiceprints, or scans of hand or face geometry,” and employee’s “biometric information,” which includes any information, regardless of how it is captured, that is based on an individual’s biometric identifier and is used to identify an individual. The law specifically requires employers to: (1) provide prior notice of the purpose for which the data is collected and the length of time that it will be used or stored; (2) establish a written policy explaining the retention schedule and develop guidelines for permanently destroying the information; and (3) obtain written consent before collecting biometric information. For negligent violations, employers may have to pay liquidated damages of $1,000 or actual damages, whichever is greater. Intentional or reckless violations may result in liquidated damages of $5,000 or actual damages, whichever is greater.
In Rogers, the employer required its truck drivers to scan their fingerprints to gain access to its facilities in order to pick up and deliver freight. According to the lawsuit, prior to obtaining and using its employees’ fingerprints, the employer did not provide notice or a written policy, nor did the employer obtain employees’ written consent. Based on these allegations, one of the company’s former truck drivers filed a class action lawsuit alleging violations of BIPA. In response, the employer filed a motion to dismiss arguing, in part, that the employee’s rights were not violated because he voluntarily provided his fingerprints.
Relying on a recent decision by the Illinois Supreme Court, the Rogers Court rejected the employer’s arguments and explained that the purpose of BIPA is to impose safeguards before problems occur. Notably, in order to assert a viable claim under BIPA, the Court held “an individual need not allege some actual injury or adverse effect, beyond a violation of his or her rights under BIPA.” Accordingly, even though the employee knew his fingerprints were being collected and could have withheld his consent if he wanted, the Court found this to be irrelevant to the issue of whether he could pursue a claim for a violation of his rights. The Court noted that “biometrics are unlike other unique identifiers because they are biologically unique to the individual and once compromised, the individual has no recourse.”
The Rogers decision provides important guidance for employers as to the potential risks associated with the use of employee biometric data. Other states, including Texas and Washington, have statutes similar to BIPA which govern the use of biometric data. In addition, it is likely that more states will implement similar laws. To ensure compliance with these laws, employers should consult with counsel and consider implementing safeguards. This may include developing and maintaining a written policy governing the use and storage of biometric data, explaining the purpose for using the data, and setting forth a schedule for the retention and destruction of the data. Likewise, prior to collecting any biometric data, employers should provide written notice to employees and obtain employees’ written consent to collect and use their biometric data. Employers also should develop security procedures to protect employee information, including implementing safeguards and protocols in the event of a data breach. Even in states that currently lack laws directly governing the use of employee biometric data, employers may reduce the risk of future litigation by applying these tips.
*Tiffany S. Henderson practices in all areas of labor and employment law. If you have questions about biometric information or other employment issues, please contact Tiffany at tsh@zrlaw.com or (216) 696-4441.
Get “Giggy” With It: California Governor Signs Worker Misclassification Bill into Law
By Jantzen D. Mace*On September 18, 2019, California Governor Gavin Newsom signed into law a bill limiting when businesses and companies can classify employees as independent contractors. “Assembly Bill 5 is landmark legislation for workers and our economy. It will help reduce worker misclassification – workers being classified as ‘independent contractors’ rather than employees,” Governor Newsom said. The author of Assembly Bill 5, Assemblywoman Lorena Gonzalez of San Diego, said in a statement: “As one of the strongest economies in the world, California is now setting the global standard for worker protections for other states and countries to follow.”
But not everyone is happy. Gig companies like Uber, Lyft, and DoorDash, which rely on thousands of independent contractors, plan to spend upwards of $90 million combined on a ballot initiative to overturn the law. While this is no small price, the companies could ultimately spend much more if forced to reclassify their workers as employees who are entitled to set wages and benefits.
Assembly Bill 5, effective January 1, 2020 codifies the California Supreme Court’s 2018 decision in Dynamex Operations West v. Superior Court, 4 Cal. 5th 903 (2018). The Dynamex lawsuit involved claims that the company unlawfully classified its delivery drivers as independent contractors as the company previously classified drivers as employees. The Court applied the “ABC test” and ruled in the drivers’ favor, finding that companies could no longer reclassify workers at their discretion. With the signing of Assembly Bill 5, the ABC test became a state-mandated test for worker classification in California.
Under the ABC test, workers are presumed employees unless they pass each of the three branches of the test: (A) the worker is free from the control and direction of the hiring entity in connection with the performance of the work; (B) the worker performs work outside the usual course of the hiring entity’s business; and (C) the worker is customarily engaged in an independently-established trade, occupation, or business of the same nature as the work performed. If the worker “passes” these three requirements, then a company can classify them as an independent contractor.
A number of professions are exempt from reclassification under this new law, including cosmetologists, commercial fishermen, and real estate agents. Importantly, this list does not include gig workers. Additionally, the California legislature approved a companion bill, Assembly Bill 170, which offers a one-year exemption for newspaper distributors and carriers who are under contract with a publisher. Governor Newsom approved the bill on October 2, 2019 and signed it into law in the same week as a number of other worker-friendly laws aimed at improving worker conditions and combating sexual harassment at work.
These new laws also end mandatory arbitration provisions in California workers’ contracts. Assembly Bill 51 now makes it a criminal misdemeanor to require workers to waive their right to sue over violations of employment statutes as a condition of employment. Also among the bills signed into law are Assembly Bill 547 and Senate Bill 530, which require state agencies to create sexual violence and harassment prevention training requirements in the construction industry and for janitorial employers. The Governor also approved other bills including: Senate Bill 142, which requires employers to provide a lactation room for mothers, and Assembly Bill 9, which extends the deadline to file workplace harassment or discrimination claims from one year to three years. This series of pro-worker laws came just weeks after Governor Newsom signed Assembly Bill 5.
While Assembly Bill 5 only applies in California, both labor groups and gig companies anticipate it having national implications. Ohio, like many other states, uses a “totality of the circumstances” multi-factor analysis to determine whether an employer may classify a worker as an independent contractor. Ohio courts look to the following six factors: (1) the permanency of the relationship; (2) the degree of skill required; (3) the worker’s investment in equipment; (4) the worker’s opportunity for profit or loss; (5) the degree of the employer’s control; and (6) whether the service rendered is integral to the employer’s business. With the signing of Assembly Bill 5, employers in Ohio and other states should collaborate closely with employment counsel as worker classification laws continue to develop.
*Jantzen D. Mace, a member of the firm’s Columbus office, practices in all areas of labor and employment law. For more information about worker classification or other labor and employment issues, please contact Jantzen at jdm@zrlaw.com or (614) 224-4411.
New Year, New Wages: Minimum Wage Increases in Several States
By Julia G. Ross*At the beginning of the New Year, several states, including Ohio, will increase their minimum wage. In Ohio, the minimum wage will increase by fifteen cents per hour from $8.55 to $8.70 for non-tipped employees and by five cents per hour from $4.30 to $4.35 for tipped employees. Ohio’s law applies to employers with gross revenue of $319,000.00 or more. Ohio employers grossing less than $319,000.00 are only required to pay the federal minimum wage, which is $7.25 per hour for non-tipped employees and $2.13 per hour for tipped employees. Additionally, Ohio employers only are required to pay minors age fifteen or younger the federal minimum wage.
Some states will not wait for the New Year to increase wages. On December 31, 2019, New York fast food employees outside of New York City will see a minimum wage increase to $13.75 per hour, and other New York employees will see an increase to $11.80 per hour. Other states will see increases later in 2020. For example, Delaware’s minimum wage will increase to $9.75 per hour on October 1, 2020.
Recently, states have been moving towards the “Living Wage” and “$15 Minimum Wage Initiative.” A number of states, including California, Maryland, Massachusetts, New Jersey, and New York have passed bills that will increase their minimum wage to approximately $15.00 per hour in the coming 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 increases to state minimum wages in 2020 (unless otherwise noted, all increases are effective January 1, 2020):
STATE | NON-TIPPED | TIPPED |
Alaska | $10.19 | $10.19 |
Arizona | $12.00 | $9.00 |
Arkansas | $10.00 | $2.63 |
California | $13 for larger employers; $12 for smaller employers | $13 for larger employers; $12 for smaller employers |
Colorado | $12.00 | $8.98 |
Connecticut (effective 9/1/2020) | $12.00 | $6.38 |
Delaware (effective 10/1/2020) | $9.75 | $2.23 |
District of Columbia (effective 7/1/2020) | $15.00 | $5.00 |
Florida | $8.56 | $5.54 |
Illinois | $9.25 | $5.55 |
Maine | $12.00 | $6.00 |
Maryland | $11.00 | $3.63 |
Massachusetts | $12.75 | $4.95 |
Michigan | $9.65 | $3.67 |
Minnesota | $10.00 for larger employers; $8.15 for smaller employers | $10.00 for larger employers; $8.15 for smaller employers |
Missouri | $9.45 | $4.73 |
Montana | $8.65 | $8.65 |
Nevada (effective 7/1/2020) | $9.00 for employees without healthcare benefits; $8.00 for employees with healthcare benefits | $9.00 for employees without healthcare benefits; $8.00 for employees with healthcare benefits |
New Jersey | $11.00 for larger employers; $10.30 for seasonal, agricultural, and small employers | $3.13 |
New Mexico | $9.00 | $2.35 |
New York (effective 12/31/19) | $13.75 for fast food employees; $11.80 for other employees | $7.85 for food service employees; $9.85 for other service employees |
Ohio | $8.70 for large employers; $7.25 for small employers | $4.35 |
Oregon (effective 7/1/2020) | $13.25 for Portland metro area; $12.00 for urban counties; $11.50 for rural counties | $13.25 for Portland metro area; $12.00 for urban counties; $11.50 for rural counties |
South Dakota | $9.30 | $4.65 |
Vermont | $10.96 | $5.48 |
Washington | $13.50 | $13.50 |
*Julia G. Ross practices in all areas of labor and employment law. For more information about minimum wage and other wage and hour questions, please contact Julia at jgr@zrlaw.com or (216) 696-4441.
Z&R SHORTS
Please join Z&R in welcoming David Posner, Julia Ross, and Jantzen Mace to its Employment and Labor Groups
David Posner is a trial lawyer that has litigated numerous jury trials to completion during his illustrious career. For over 30 years, he has represented publicly-traded and privately-owned companies in all aspects of employment and labor law including discrimination, retaliation, harassment, wrongful discharge, and wage and hour matters. He has extensive experience litigating cases involving the misappropriation of trade secrets and violations of non-compete and non-solicitation agreements under state and federal law. David also has a broad range of experience counselling employers and drafting employment related agreements. David is certified by the Ohio State Bar Association as a specialist in Labor and Employment Law. Best Lawyers in America© has recognized him in the areas of labor and employment litigation as well as management-side employment law. He is a recognized practitioner in labor and employment law in Ohio by Chambers USA and has been named a “Super Lawyer” since 2012.
Julia Ross practices out of Z&R’s Cleveland office. She represents public and private sector employers in all aspects of labor and employment law. Julia graduated from the University of Rochester in 2016 and received her Juris Doctor from Case Western Reserve University School of Law in 2019. As a law student, Julia was an Executive Notes Editor for Health Matrix: Journal of Law-Medicine, was the President of the Jewish Law Students Association, and worked in the public, private, and health-care law sectors with a focus on employment law. Julia was also the Noah Webster Law Scholar and the Eudese and Elmer Paull Prize Winner.
Jantzen Mace practices out of Z&R’s Columbus office. His practice encompasses all aspects of labor and employment law. Jantzen graduated from Miami University (OH) in 2012 and received his Juris Doctor from the Ohio State University Moritz College of Law in 2019. As a law student, Jantzen earned a Certificate in Alternative Dispute Resolution through his completion of additional classes and work experience in Arbitration, Negotiation, and Mediation.
Please join Z&R in congratulating its attorneys for the following achievements:
Ohio Super Lawyers Top 100 List and Cleveland Top 50 List:
Andrew ZashinSuper Lawyers List 2020:
George Crisci, Jon Dileno, Deanna DiPetta, Jonathan Downes, Michele Jakubs, Drew Piersall, David Posner, Christopher Reynolds, Jonathan Rich, Patrick Watts, Jeffrey Wedel, Stephen Zashin, and Andrew Zashin.Rising Stars List 2020:
Amy Keating, David Vance, and Kyleigh Weinfurtner.Upcoming Speaking Engagements
April 17, 2020
Jonathan J. Downes presents “Workplace Challenges: Civility, Bullying, Harassment, and Discrimination” at the State Personnel Board of Review (“SPBR”) Conference. The SPBR Conference will take place at the Crowne Plaza Columbus North-Worthington in Columbus, Ohio. Information regarding the SPBR Conference can be found here.
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