*By Patrick J. Hoban
This morning, the Federal Circuit Court for the District of Columbia issued an injunction which prevents the National Labor Relations Board (“NLRB”) from enforcing its rule requiring Employers to post the NLRB-mandated “Employee Rights” notice by April 30, 2012. The injunction means that employers do not have to post the NLRB Employee Rights notice by April 30. Z&R discussed the posting requirement and its implications for employers in previous alerts: October 2011, September 2011 and August 2011.
In March, 2012, in response to a challenge by two employer organizations, the Federal District Court for the District of Columbia, ruled that the NLRB was authorized to compel private employers to post notices informing employees of their rights under the National Labor Relations Act (“NLRA”) – including their right to form a union and file unfair labor practice charges. See Nat’l Assoc. of Manufacturers v. Nat’l Labor Relations Bd., et al., No. 1:11-cv-01629-ABJ (D.C. Sept. 8, 2011) The employer groups appealed the decision to the D.C. Circuit Court of Appeals and filed a Motion to Stay enforcement of the rule pending appeal. The NLRB opposed this motion; however, the Circuit Court issued the requested injunction this morning. The Court of Appeals’ injunction recognizes the “uncertainty about enforcement” of the rule and requires preserving the “status quo” (i.e., no notice posting requirement) pending resolution of the challenges to the rule on appeal. The Circuit Court has scheduled oral arguments in the case for September 2012 which means that employers will not be required to post the “Employee Rights” notice until the Court issues its decision sometime after that.
In another challenge to the posting rule brought by the U.S. Chamber of Commerce, on Friday, April 13, 2012, the United States District Court in Charleston, South Carolina rejected the NLRB’s argument that the posting requirement was “necessary” to carry out the mission of the NLRA. Further, Judge Norton also rejected the NLRB’s argument that Congress had delegated authority to the NLRB to order the posting of these notices. The Court held that the NLRB lacked authority to issue the posting rule, that, as a result, the rule was unlawful and granted summary judgment to the U.S. Chamber of Commerce. Chamber of Commerce of the United States, et al. v. National Labor Relations Board, et al., No. 2:11-cv-02516-DCN (D.S.C. Apr. 13, 2012). This decision rendered the posting rule unenforceable in the State of South Carolina, but left the NLRB free to enforce it in other parts of the country. However, today’s injunction from the D.C. Circuit Court prohibits the NLRB from enforcing the rule anywhere.
The ultimate fate of the “Employee Rights” poster remains unclear and may ultimately rest with the U.S. Supreme Court. Z&R will keep you updated on any changes in the posting requirement.
Election Rule Amendments Take Effect April 30
The election rule amendments, passed in December, 2011, reduce the time between the filing of a union election petition and an election by virtually eliminating pre-election litigation. As a result, employers will have less time to present the case against unionization to their employees and rebut union propagandizing that has been underway for months. The new election rules drastically undermine an employer’s ability to defend itself and its employees against a union organizing campaign. (See our previous alert discussing the amendments in more detail).
If you have not updated your employee handbook or workplace policies in light of these NLRB rules changes, you should do so immediately. Specifically, your confidentiality, social media, code of conduct, non-harassment, related investigations, discipline, electronic communications and solicitation/distribution polices should be reviewed and revised to ensure that they comply with the NLRA and give you the tools to counter union organizing in your workplace. If you have any questions about the posting requirement, the election rules changes, revising your employee handbook to comply with the NLRA, contact Pat Hoban at 216-696-4441 or pjh@zrlaw.com.
*Patrick J. Hoban, an OSBA Certified Specialist in Labor and Employment Law, appears before the National Labor Relations Board and practices in all areas of labor relations. For more information about the NLRB’s election amendments, NLRB’s posting requirement, or labor & employment law, please contact Pat (pjh@zrlaw.com) at 216.696.4441.
Tuesday, April 17, 2012
Friday, April 13, 2012
California Supreme Court: Employers Need Not “Police” Meal Breaks To Ensure They Are Taken
*By B. Jason Rossiter
In California, it is now (finally) clear what an employer’s responsibility is concerning meal breaks.
California Courts have been befuddled for some time concerning meal breaks. Specifically, what happened if a boss told an employee to take a meal break, but the employee got busy and forgot and worked through all or part of the break? Does the mere fact that the boss told the employee to go on break mean that the company satisfied whatever obligation it might have had to provide the employee with a break (assuming, of course, that the boss did not pester the employee to keep working during the break)?
Or, on the other hand, is it the company’s duty to actually make sure the employee takes a meal break when he or she is supposed to? If this is the case, then legions of employees in various industries, who performed a spot of work here and there during meal breaks, might have claims against their employers. One wonders what a company must do to fulfill such a requirement, if it indeed were a requirement. Should companies tail their employees to the In-N-Out Burger?
After years of waiting, the California Supreme Court has finally answered this question in Brinker Restaurant Corp. v. Superior Court. The Court summarized its key holding at the very beginning of the 54-page opinion:
This holding creates a few new issues, however. California employers who have handbook policies that limit what employees can do during meal breaks might want to rethink those policies, since tying the employee’s hands and requiring them to take all breaks in the breakroom, etc., may no longer be wise, since it might not satisfy the “at liberty to use the meal period for whatever purpose he or she desires” requirement. California employers might also want to think about whether they should direct supervisors and managers to simply stay out of the breakroom (unless they are on breaks themselves), since a rather glaring hole in this holding is the possibility that employees might allege that their bosses coerced or pressured them into working, and those allegations become more feasible the more often supervisors visit the breakroom. The court even mentioned this possibility by stating that “an employer may not undermine a formal policy of providing meal breaks by pressuring employees to perform their duties in ways that omit breaks.”
In its opinion, the Brinker court also addressed various issues regarding class certification, how to calculate when rest and meal breaks must be given, etc., but the issue above was what everyone was waiting to see resolved.
*Jason Rossiter practices in all areas of labor and employment law and has extensive experience handling employee break issues. He is licensed to practice law in California, Pennsylvania and Ohio. For more information about this and other changes to California law, contact Zashin & Rich at (216) 696-4441.
In California, it is now (finally) clear what an employer’s responsibility is concerning meal breaks.
California Courts have been befuddled for some time concerning meal breaks. Specifically, what happened if a boss told an employee to take a meal break, but the employee got busy and forgot and worked through all or part of the break? Does the mere fact that the boss told the employee to go on break mean that the company satisfied whatever obligation it might have had to provide the employee with a break (assuming, of course, that the boss did not pester the employee to keep working during the break)?
Or, on the other hand, is it the company’s duty to actually make sure the employee takes a meal break when he or she is supposed to? If this is the case, then legions of employees in various industries, who performed a spot of work here and there during meal breaks, might have claims against their employers. One wonders what a company must do to fulfill such a requirement, if it indeed were a requirement. Should companies tail their employees to the In-N-Out Burger?
After years of waiting, the California Supreme Court has finally answered this question in Brinker Restaurant Corp. v. Superior Court. The Court summarized its key holding at the very beginning of the 54-page opinion:
an employer’s obligation [to provide a meal break] is to relieve its employee of all duty, with the employee thereafter at liberty to use the meal period for whatever purpose he or she desires, but the employer need not ensure that no work is done.The Court elaborated upon this holding a little later in its opinion (at pp. 36-37):
An employer’s duty with respect to meal breaks under both [Labor Code] section 512, subdivision (a) and [IWC] Wage Order No. 5 is an obligation to provide a meal period to its employees. The employer satisfies this obligation if it relieves its employees of all duty, relinquishes control over their activities and permits them a reasonable opportunity to take an uninterrupted 30-minute break, and does not impede or discourage them from doing so. What will suffice may vary from industry to industry, and we cannot in the context of this class certification proceeding delineate the full range of approaches that in each instance might be sufficient to satisfy the law.
On the other hand, the employer is not obligated to police meal breaks and ensure no work thereafter is performed. Bona fide relief from duty and the relinquishing of control satisfies the employer’s obligations, and work by a relieved employee during a meal break does not thereby place the employer in violation of its obligations and create liability for premium pay under Wage Order No. 5, subdivision 11(B) and Labor Code section 226.7, subdivision (b).(Emphasis added). The underlined language is key and is what most California employers likely will focus on. So long as an employer gives its employees meal breaks when required, and legitimately relieves them of all responsibility and lets them do essentially whatever they want (the employee must be “at liberty to use the meal period for whatever purpose he or she desires”), the employer is not at risk of a meal break penalty merely because its employees might start working to some degree during their breaks. As the Court put it, “Proof an employer had knowledge of employees working through meal periods will not alone subject the employer to liability for premium pay; employees cannot manipulate the flexibility granted them by employers to use their breaks as they see fit to generate such liability.”
This holding creates a few new issues, however. California employers who have handbook policies that limit what employees can do during meal breaks might want to rethink those policies, since tying the employee’s hands and requiring them to take all breaks in the breakroom, etc., may no longer be wise, since it might not satisfy the “at liberty to use the meal period for whatever purpose he or she desires” requirement. California employers might also want to think about whether they should direct supervisors and managers to simply stay out of the breakroom (unless they are on breaks themselves), since a rather glaring hole in this holding is the possibility that employees might allege that their bosses coerced or pressured them into working, and those allegations become more feasible the more often supervisors visit the breakroom. The court even mentioned this possibility by stating that “an employer may not undermine a formal policy of providing meal breaks by pressuring employees to perform their duties in ways that omit breaks.”
In its opinion, the Brinker court also addressed various issues regarding class certification, how to calculate when rest and meal breaks must be given, etc., but the issue above was what everyone was waiting to see resolved.
*Jason Rossiter practices in all areas of labor and employment law and has extensive experience handling employee break issues. He is licensed to practice law in California, Pennsylvania and Ohio. For more information about this and other changes to California law, contact Zashin & Rich at (216) 696-4441.
Tuesday, March 6, 2012
NLRB 1, Employers 0: National Labor Relations Board Wins Partial Victory in Battle over its "Posting" Requirement
*By Patrick J. Hoban
The Federal District Court for the District of Columbia ruled Friday, March 2, 2012 that the National Labor Relations Board ("NLRB") can require private employers to post notices informing employees of their rights under the National Labor Relations Act ("NLRA") - including the rights to form a union and file unfair labor practice charges. National Association of Manufacturers v. NLRB, No. 11-1629, (D.D.C. Mar. 2, 2012). Z&R reported on the posting requirements in several prior alerts: Employers Need to See the Writing on the Wall – National Labor Relations Board Publishes Final Rule on Posting Requirements; National Labor Relations Board Employee Rights Notice Posters Now Available; and National Labor Relations Board Delays Implementation of Employee Rights Notice Posters Rule.
The Court issued its decision in an action consolidating lawsuits filed by the National Association of Manufacturers and the National Right to Work Legal Defense Fund employer advocacy organizations. The organizations contended that the NLRB did not have the statutory authority to implement workplace regulations (such as the notice posting requirements). Additionally, they argued that the Rule's enforcement provisions rendering failure to post an unfair labor practice and extending the six-month period for filing unfair labor practice charges violated the NLRA. They further contended that the Rule violated employers' First Amendment rights by compelling employer speech.
The Court held that the NLRA granted the NLRB "broad" authority to issue rules enforcing the NLRA' s provisions – including the notice posting Rule. Specifically, the Court explained that the NLRB' s conclusion that historically low levels of private sector unionization, large numbers of immigrants in the national workforce, and high school graduates' relative ignorance of national labor law rendered the Rule "reasonably" necessary to "carry out the provisions" of the NLRA. Thus, the Court found the posting requirement, which informs employees of their right to organize, provides contact information for the NLRB, and includes information about how to file unfair labor practice charges, was within the NLRB' s statutory authority. In short, the Court validated the NLRB' s motive in issuing the Rule – to increase unionization in the private sector.
By contrast, the Court found the Rule' s provision that failure to post was a violation of the NLRA and could extend the unfair labor practice filing period were in conflict with the express provisions of the NLRA and struck them down. However, the Court further held that because the Rule required employers to provide a clear statement of the law issued by the NLRB, it was not compelling employer speech and did not violate the First Amendment.
Importantly for employers, the Court made clear that, although it struck down the unfair labor practice and filing period provisions of the Rule, employers still face penalties for failing to post the required notice. The NLRB may, on a case-by-case basis, find that an employer' s failure to post the required notice may be evidence supporting unfair labor practice charges and may extend the filing period. Additionally, the Court let stand the Rule' s provision stating that when an employer "knowingly and willfully" fails to post the notice (i.e., fails to post the notice with knowledge of the requirement that it do so), such facts may be considered evidence of unlawful motive in any unfair labor practice case involving other alleged violations of the NLRA.
The Rule, which becomes effective on April 30, 2012, requires employers to post and maintain an 11 x 17 inch notice that alerts workers to their rights under Section 7 of the NLRA. The rule also requires businesses that use the Internet or an intranet site to post human resources-related information to post the NLRB notice on those sites as well. These obligations are unaffected by this decision. Employers can download the notice (https://www.nlrb.gov/poster) or obtain a copy from a regional NLRB office. The Rule was originally to have taken effect on November 14, 2011; however, the NLRB extended the Rule's effective date in response to the lawsuit.
It is likely that the employer organizations will appeal the decision to the D.C. Circuit Court of Appeals. A decision in another case filed by the United States Chamber of Commerce and South Carolina Chamber of Commerce is still pending in U.S. District Court in Charleston, South Carolina.
Notwithstanding ongoing legal challenges, this decision requires that employers – especially those whose employees are not unionized – review their workplace policies to maximize their ability to respond to a union organizing effort.
*Patrick J. Hoban, an OSBA Certified Specialist in Labor and Employment Law, appears before the National Labor Relations Board and practices in all areas of labor relations. For more information about the NLRB's posting requirements or labor & employment law, please contact Pat (pjh@zrlaw.com) at 216.696.4441.
The Federal District Court for the District of Columbia ruled Friday, March 2, 2012 that the National Labor Relations Board ("NLRB") can require private employers to post notices informing employees of their rights under the National Labor Relations Act ("NLRA") - including the rights to form a union and file unfair labor practice charges. National Association of Manufacturers v. NLRB, No. 11-1629, (D.D.C. Mar. 2, 2012). Z&R reported on the posting requirements in several prior alerts: Employers Need to See the Writing on the Wall – National Labor Relations Board Publishes Final Rule on Posting Requirements; National Labor Relations Board Employee Rights Notice Posters Now Available; and National Labor Relations Board Delays Implementation of Employee Rights Notice Posters Rule.
The Court issued its decision in an action consolidating lawsuits filed by the National Association of Manufacturers and the National Right to Work Legal Defense Fund employer advocacy organizations. The organizations contended that the NLRB did not have the statutory authority to implement workplace regulations (such as the notice posting requirements). Additionally, they argued that the Rule's enforcement provisions rendering failure to post an unfair labor practice and extending the six-month period for filing unfair labor practice charges violated the NLRA. They further contended that the Rule violated employers' First Amendment rights by compelling employer speech.
The Court held that the NLRA granted the NLRB "broad" authority to issue rules enforcing the NLRA' s provisions – including the notice posting Rule. Specifically, the Court explained that the NLRB' s conclusion that historically low levels of private sector unionization, large numbers of immigrants in the national workforce, and high school graduates' relative ignorance of national labor law rendered the Rule "reasonably" necessary to "carry out the provisions" of the NLRA. Thus, the Court found the posting requirement, which informs employees of their right to organize, provides contact information for the NLRB, and includes information about how to file unfair labor practice charges, was within the NLRB' s statutory authority. In short, the Court validated the NLRB' s motive in issuing the Rule – to increase unionization in the private sector.
By contrast, the Court found the Rule' s provision that failure to post was a violation of the NLRA and could extend the unfair labor practice filing period were in conflict with the express provisions of the NLRA and struck them down. However, the Court further held that because the Rule required employers to provide a clear statement of the law issued by the NLRB, it was not compelling employer speech and did not violate the First Amendment.
Importantly for employers, the Court made clear that, although it struck down the unfair labor practice and filing period provisions of the Rule, employers still face penalties for failing to post the required notice. The NLRB may, on a case-by-case basis, find that an employer' s failure to post the required notice may be evidence supporting unfair labor practice charges and may extend the filing period. Additionally, the Court let stand the Rule' s provision stating that when an employer "knowingly and willfully" fails to post the notice (i.e., fails to post the notice with knowledge of the requirement that it do so), such facts may be considered evidence of unlawful motive in any unfair labor practice case involving other alleged violations of the NLRA.
The Rule, which becomes effective on April 30, 2012, requires employers to post and maintain an 11 x 17 inch notice that alerts workers to their rights under Section 7 of the NLRA. The rule also requires businesses that use the Internet or an intranet site to post human resources-related information to post the NLRB notice on those sites as well. These obligations are unaffected by this decision. Employers can download the notice (https://www.nlrb.gov/poster) or obtain a copy from a regional NLRB office. The Rule was originally to have taken effect on November 14, 2011; however, the NLRB extended the Rule's effective date in response to the lawsuit.
It is likely that the employer organizations will appeal the decision to the D.C. Circuit Court of Appeals. A decision in another case filed by the United States Chamber of Commerce and South Carolina Chamber of Commerce is still pending in U.S. District Court in Charleston, South Carolina.
Notwithstanding ongoing legal challenges, this decision requires that employers – especially those whose employees are not unionized – review their workplace policies to maximize their ability to respond to a union organizing effort.
*Patrick J. Hoban, an OSBA Certified Specialist in Labor and Employment Law, appears before the National Labor Relations Board and practices in all areas of labor relations. For more information about the NLRB's posting requirements or labor & employment law, please contact Pat (pjh@zrlaw.com) at 216.696.4441.
Sunday, January 29, 2012
Strength in Numbers – The NLRB Finds Class and Collective Arbitration Waivers Unlawful
*By Patrick J. Hoban
On January 6, 2012, the National Labor Relations Board (“NLRB”) issued its much-anticipated decision in D.R. Horton, Inc., 357 N.L.R.B. No. 184 (2012). In D.R. Horton, the NLRB again flexed its regulatory muscle and extended the protections of the National Labor Relations Act (“NLRA”) to all forms of class litigation. The case addressed the issue of whether a nonunionized employer could require employees, as a condition of employment, to accept a mandatory arbitration agreement that required arbitration of employment disputes and precluded “class” arbitrations (i.e., resolution of claims brought by a group of employees in a single arbitration). A plurality of the Board, consisting of Board Chairman Mark Pearce and recently departed Member Craig Becker, ruled that home builder D.R. Horton’s mutual arbitration agreement (“MAA”) violated the National Labor Relations Act because it required employees —as a condition of employment — to forego class and collective action arbitration proceedings.
Background Facts
In January 2006, D.R. Horton began requiring employees to execute the MAA as a condition of employment. The MAA required that "all disputes and claims relating to the employee's employment" be determined by arbitration. The MAA further stated that the arbitrator "may hear only [an] employee's individual claims," and "does not have authority to fashion a proceeding as a class or collective action or to award relief to a group or class of employees in one arbitration proceeding." In other words, the MAA required an employee to resolve all employment-related disputes in individual arbitration, without the possibility of class or collective arbitration.
A D.R. Horton superintendent sought to arbitrate a claim on behalf of himself and other similarly-situated superintendents under the Fair Labor Standards Act (“FLSA”). The employee claimed that he and other employees were misclassified and thus entitled to overtime pay under the FLSA. D.R. Horton refused to submit to class arbitration, citing the MAA. The employee filed an unfair labor practice charge with the NLRB, claiming that the MAA violated Section 8(a)(1) by unlawfully interfering with employee rights under the NLRA.
Board’s Decision
The NLRB held that "an individual who files a class or collective action regarding wages, hours, or working conditions, whether in court or before an arbitrator, seeks to initiate or induce group action and is engaged in conduct protected by [the NLRA]." Thus, by requiring employees as a condition of employment to forego their rights to such concerted activity, D.R. Horton violated the NLRA.
The Board then addressed whether its decision was consistent with the language and goals of the Federal Arbitration Act (“FAA”). The Board determined that its decision did not conflict with the goals of the FAA because the right to bring a class or collective action was a substantive right guaranteed by the NLRA as a form of concerted protected activity. In reaching this conclusion, the Board distinguished the recent United States Supreme Court decision in Stolt-Nielsen S.A. v. AnimalFeeds International Corp., 130 S. Ct. 1758 (2010), which held that arbitration agreements that are silent on class arbitration cannot be construed to require a party to submit to arbitration involving class claims. The NLRB also distinguished AT&T Mobility v. Concepcion, 131 S. Ct. 1740 (2011) wherein the Supreme Court held that state laws prohibiting class arbitration conflict with the FAA. Under these Supreme Court decisions, it is permissible for arbitration agreements to ban class or collective actions because arbitration is designed to provide an informal, simple mechanism for the resolution of bilateral disputes according to terms agreed upon by the parties.
The NLRB made clear that its decision addressed arbitration agreements that required a waiver of the right to engage in class litigation as a mandatory condition of employment. Many arbitration agreements, however, contain clauses allowing employees to "opt out" of the program. Under such agreements, employees may choose to refrain from participation in the arbitration process, preserving employee rights to participate in class action litigation and avoid individual arbitration entirely.
The decision leaves open the possibility that arbitration agreements that allow employees to “opt out” may not violate the NLRA, even if those agreements ban class or collective actions in any forum. However, in D.R. Horton, the NLRB established broad protections for employee participation in class or collective actions under the NLRA. As a result, the NLRB may find a violation of the NLRA if employers rely on Stolt-Nielsen to argue that arbitration agreements prohibit class or collective arbitration.
In light of the NLRB’s significant expansion of the protections under the NLRA, it is likely that D.R. Horton will be appealed to the U.S. Court of Appeals and the U.S. Supreme Court. Indeed, a U.S. District Court discounted the NLRB’s D.R. Horton decision without comment less than ten days after it was issued. Lavoice v. UBS Financial Services, Inc., 11 Civ. 2308 (SD N.Y., January 13, 2012). However, employers that use or are considering using mandatory arbitration programs that restrict class and collective actions must carefully consider the impact of D.R. Horton.
*Patrick J. Hoban, an OSBA Certified Specialist in Labor and Employment Law, appears before the National Labor Relations Board and practices in all areas of labor relations. For more information about this decision or the NLRB, please contact Pat (pjh@zrlaw.com) at 216.696.4441.
On January 6, 2012, the National Labor Relations Board (“NLRB”) issued its much-anticipated decision in D.R. Horton, Inc., 357 N.L.R.B. No. 184 (2012). In D.R. Horton, the NLRB again flexed its regulatory muscle and extended the protections of the National Labor Relations Act (“NLRA”) to all forms of class litigation. The case addressed the issue of whether a nonunionized employer could require employees, as a condition of employment, to accept a mandatory arbitration agreement that required arbitration of employment disputes and precluded “class” arbitrations (i.e., resolution of claims brought by a group of employees in a single arbitration). A plurality of the Board, consisting of Board Chairman Mark Pearce and recently departed Member Craig Becker, ruled that home builder D.R. Horton’s mutual arbitration agreement (“MAA”) violated the National Labor Relations Act because it required employees —as a condition of employment — to forego class and collective action arbitration proceedings.
Background Facts
In January 2006, D.R. Horton began requiring employees to execute the MAA as a condition of employment. The MAA required that "all disputes and claims relating to the employee's employment" be determined by arbitration. The MAA further stated that the arbitrator "may hear only [an] employee's individual claims," and "does not have authority to fashion a proceeding as a class or collective action or to award relief to a group or class of employees in one arbitration proceeding." In other words, the MAA required an employee to resolve all employment-related disputes in individual arbitration, without the possibility of class or collective arbitration.
A D.R. Horton superintendent sought to arbitrate a claim on behalf of himself and other similarly-situated superintendents under the Fair Labor Standards Act (“FLSA”). The employee claimed that he and other employees were misclassified and thus entitled to overtime pay under the FLSA. D.R. Horton refused to submit to class arbitration, citing the MAA. The employee filed an unfair labor practice charge with the NLRB, claiming that the MAA violated Section 8(a)(1) by unlawfully interfering with employee rights under the NLRA.
Board’s Decision
The NLRB held that "an individual who files a class or collective action regarding wages, hours, or working conditions, whether in court or before an arbitrator, seeks to initiate or induce group action and is engaged in conduct protected by [the NLRA]." Thus, by requiring employees as a condition of employment to forego their rights to such concerted activity, D.R. Horton violated the NLRA.
The Board then addressed whether its decision was consistent with the language and goals of the Federal Arbitration Act (“FAA”). The Board determined that its decision did not conflict with the goals of the FAA because the right to bring a class or collective action was a substantive right guaranteed by the NLRA as a form of concerted protected activity. In reaching this conclusion, the Board distinguished the recent United States Supreme Court decision in Stolt-Nielsen S.A. v. AnimalFeeds International Corp., 130 S. Ct. 1758 (2010), which held that arbitration agreements that are silent on class arbitration cannot be construed to require a party to submit to arbitration involving class claims. The NLRB also distinguished AT&T Mobility v. Concepcion, 131 S. Ct. 1740 (2011) wherein the Supreme Court held that state laws prohibiting class arbitration conflict with the FAA. Under these Supreme Court decisions, it is permissible for arbitration agreements to ban class or collective actions because arbitration is designed to provide an informal, simple mechanism for the resolution of bilateral disputes according to terms agreed upon by the parties.
The NLRB made clear that its decision addressed arbitration agreements that required a waiver of the right to engage in class litigation as a mandatory condition of employment. Many arbitration agreements, however, contain clauses allowing employees to "opt out" of the program. Under such agreements, employees may choose to refrain from participation in the arbitration process, preserving employee rights to participate in class action litigation and avoid individual arbitration entirely.
The decision leaves open the possibility that arbitration agreements that allow employees to “opt out” may not violate the NLRA, even if those agreements ban class or collective actions in any forum. However, in D.R. Horton, the NLRB established broad protections for employee participation in class or collective actions under the NLRA. As a result, the NLRB may find a violation of the NLRA if employers rely on Stolt-Nielsen to argue that arbitration agreements prohibit class or collective arbitration.
In light of the NLRB’s significant expansion of the protections under the NLRA, it is likely that D.R. Horton will be appealed to the U.S. Court of Appeals and the U.S. Supreme Court. Indeed, a U.S. District Court discounted the NLRB’s D.R. Horton decision without comment less than ten days after it was issued. Lavoice v. UBS Financial Services, Inc., 11 Civ. 2308 (SD N.Y., January 13, 2012). However, employers that use or are considering using mandatory arbitration programs that restrict class and collective actions must carefully consider the impact of D.R. Horton.
*Patrick J. Hoban, an OSBA Certified Specialist in Labor and Employment Law, appears before the National Labor Relations Board and practices in all areas of labor relations. For more information about this decision or the NLRB, please contact Pat (pjh@zrlaw.com) at 216.696.4441.
Monday, January 9, 2012
No Reason to be Bored with the Board: New Election Rules, Legal Challenges and Legislation to Stop New Rules, Delaying the Rights Posting Rule and Three "Recess" Appointments
*By Patrick J. Hoban
The National Labor Relations Board (the “Board”) is once again making headlines after a series of controversial decisions, activist rulemaking and President Obama’s decision to maintain the Board’s operating quorum through three “recess” appointments. These actions have resulted in legislation to limit the Board’s authority and/or undo the effect of recent Board rules and, to date, two lawsuits. Although the recess appointments will almost certainly face legal challenges on constitutional grounds, the fully-staffed “activist” Board is poised to continue to exercise its authority to skew the labor law landscape further toward unions and against employers.
The rule changes take effect on April 30, 2012 and include the following:
Most important for employers, the amendments will significantly reduce the time between a union election petition and an election by virtually eliminating pre-election litigation. As a result, employers will have less time to present the case against unionization to their employees and rebut union propagandizing that has been underway for months. Additionally, in light of the Board’s 2011 decision in Specialty Healthcare, 357 NLRB No. 83 (2011) (see our prior alert discussing the case in more detail), the Board has imposed significant limits on an employer’s ability to challenge unit composition and eligibility issues before an election. The decision encourages unions to “cherry pick” units comprised of employees who strongly support them and will allow them to get their foot in an employer’s door with a small unit to establish a presence in the workplace. This decision, together with the new election rules, drastically undermines an employer’s ability to defend itself and its employees against a union organizing campaign.
Additionally, on November 30, 2011 the U.S. House of Representatives passed by a 235-188 vote a bill that would roll back both the new election rules and the Board’s decision in Specialty Healthcare. Rep. John Kline (R-MN) sponsored the Workforce Democracy and Fairness Act in response to the Board’s ongoing effort to tilt the Board’s policies in favor of labor unions. However, the bill is unlikely to become law anytime soon due to the Democrat majority in the Senate.
The three recess appointments to the Board include:
Regardless of how these weighty constitutional issues play out, it is safe to assume that the new Board will continue its activist ways by favoring unions over employers. Employers must continue to defend themselves against the activist Board by reviewing written employment policies to ensure they are effective and lawful, and redoubling efforts to identify and address employee issues. The Board’s new rules, standards and the new activist majority mean that employers simply cannot wait until they receive an election petition to take action.
*Patrick J. Hoban, an OSBA Certified Specialist in Labor and Employment Law, appears before the National Labor Relations Board and practices in all areas of labor relations. For more information about the NLRB’s election amendments or labor & employment law, please contact Pat at 216.696.4441 or pjh@zrlaw.com.
The National Labor Relations Board (the “Board”) is once again making headlines after a series of controversial decisions, activist rulemaking and President Obama’s decision to maintain the Board’s operating quorum through three “recess” appointments. These actions have resulted in legislation to limit the Board’s authority and/or undo the effect of recent Board rules and, to date, two lawsuits. Although the recess appointments will almost certainly face legal challenges on constitutional grounds, the fully-staffed “activist” Board is poised to continue to exercise its authority to skew the labor law landscape further toward unions and against employers.
Election Rule Amendments Will Hamstring Employer’s Campaigns
On December 22, 2011, the Board adopted eight amendments to its election rules that will significantly affect an employer’s ability to mount an effective representation election campaign.The rule changes take effect on April 30, 2012 and include the following:
- Pre-election hearings are limited to whether a “question of representation” exists (i.e., do employees want a union) and all voter eligibility disputes (e.g., supervisor status) will be resolved post-election.
- Hearing officers may limit pre-election hearings to evidence relevant only to the issue of whether a question of representation exists.
- Hearing officers now have the authority to determine when (and if) a party may file a post-hearing brief. Previously, parties had a right to file post-hearing briefs which necessarily extended the time for campaigning. Hearing officers also have complete discretion to limit issues addressed in and time for filing briefs.
- Parties no longer have the right to seek Board review of regional director and hearing officer decisions prior to an election. In addition, the new election rules fail to state that elections should be scheduled at least 25 days after the regional director’s determination that a question of representation exists.
- Parties may request special permission for Board review of regional director or hearing officer decisions only if they show “extraordinary circumstances” and that review after the election would be meaningless.
- Board review of regional director or hearing officer determinations on pre and post-election disputes are now discretionary. Under previous Board rules, pre-election review was discretionary, while post-election review was mandatory.
Most important for employers, the amendments will significantly reduce the time between a union election petition and an election by virtually eliminating pre-election litigation. As a result, employers will have less time to present the case against unionization to their employees and rebut union propagandizing that has been underway for months. Additionally, in light of the Board’s 2011 decision in Specialty Healthcare, 357 NLRB No. 83 (2011) (see our prior alert discussing the case in more detail), the Board has imposed significant limits on an employer’s ability to challenge unit composition and eligibility issues before an election. The decision encourages unions to “cherry pick” units comprised of employees who strongly support them and will allow them to get their foot in an employer’s door with a small unit to establish a presence in the workplace. This decision, together with the new election rules, drastically undermines an employer’s ability to defend itself and its employees against a union organizing campaign.
Legal Challenges to Board Actions
The Board’s ongoing activism drew swift reaction from congressional Republicans. The election rules amendments face challenges from the Senate under the Congressional Review Act, which allows the House or Senate to prevent federal agencies from enforcing their rules. Senator Mike Enzi (R-WY) announced his plans for challenging the final rule last week. Enzi contends that the new rules, by shortening the pre-election process and doing away with mandatory Board review of election challenges, deprive employers of the opportunity to present their case to their employees during a campaign. The U.S. Chamber of Commerce has also filed a lawsuit to stop the rules. See Chamber of Commerce, et al. v. National Labor Relations Board, No. 1:11-cv-02262 (D.C. Dec. 20, 2011).Additionally, on November 30, 2011 the U.S. House of Representatives passed by a 235-188 vote a bill that would roll back both the new election rules and the Board’s decision in Specialty Healthcare. Rep. John Kline (R-MN) sponsored the Workforce Democracy and Fairness Act in response to the Board’s ongoing effort to tilt the Board’s policies in favor of labor unions. However, the bill is unlikely to become law anytime soon due to the Democrat majority in the Senate.
Board Delays Deadline for Posting “Employee Rights” Poster
The Board has once again postponed the posting requirement for the employee rights poster. Employers are now required to post the notices by April 30, 2012. The decision to postpone the effective date resulted from a request by the federal court in Washington, D.C. that is currently hearing a legal challenge regarding the rule. See Nat’l Assoc. of Manufacturers v. Nat’l Labor Relations Bd., et al., No. 1:11-cv-01629-ABJ (D.C. Sept. 8, 2011). The Board said that the delay will allow for “the resolution of the legal challenges that have been filed with respect to the rule.”Board Restored to Five Members – a 3-2 Democrat Majority – After Three “Recess” Appointments
On December 31, 2011, Member Becker’s recess appointment expired and the Board lost the three members necessary to issue decisions or make rules. To maintain the Board’s authority, President Obama made three “recess” Board appointments on January 4, 2012. The U.S. Constitution grants the President the power to make recess appointments without Senate approval “during a recess of the Senate.” In this case, the Senate was conducting “pro forma” sessions and not in recess on January 4. As a result, lawmakers and employer advocates contend that the appointments are illegitimate and violate the Constitution.The three recess appointments to the Board include:
- Sharon Block (Democrat member), former Deputy Assistant Secretary for Congressional Affairs at the U.S. Department of Labor. She previously worked for former Board Chairman Battista and as an attorney for the Board. Ms. Block also served on the staff of late U.S. Senator Ted Kennedy (D-MA). Prior to her public service, Ms. Block was in private practice for five years.
- Terence F. Flynn (Republican member), former Chief Counsel to current Board Member Hayes. Mr. Flynn was previously Chief Counsel to former Board Member Schaumber. Prior to his Board work, Mr. Flynn spent nearly thirteen years practicing labor & employment law with several different law firms.
- Richard Griffin (Democrat member), former General Counsel for International Union of Operating Engineers. Mr. Griffin also served on the board of directors for the AFL-CIO Lawyers Coordinating Committee. During his career of over thirty years, he has practiced before and held various positions with the Board.
Regardless of how these weighty constitutional issues play out, it is safe to assume that the new Board will continue its activist ways by favoring unions over employers. Employers must continue to defend themselves against the activist Board by reviewing written employment policies to ensure they are effective and lawful, and redoubling efforts to identify and address employee issues. The Board’s new rules, standards and the new activist majority mean that employers simply cannot wait until they receive an election petition to take action.
*Patrick J. Hoban, an OSBA Certified Specialist in Labor and Employment Law, appears before the National Labor Relations Board and practices in all areas of labor relations. For more information about the NLRB’s election amendments or labor & employment law, please contact Pat at 216.696.4441 or pjh@zrlaw.com.
Tuesday, December 27, 2011
Ohio Minimum Wage Increasing Again in 2012
*By Michele L. Jakubs
As part of an Amendment to the Ohio Constitution, Ohio’s minimum wage will increase by thirty cents on January 1, 2012. The Amendment provides for an increase, tied to the rate of inflation, every January 1st. The think tank Policy Matters Ohio estimates 347,000 Ohio workers will see an increase in wages.
The hourly rate for workers 16 years and older who do not receive tips will increase thirty cents to $7.70 per hour. Tipped employees’ hourly rate will increase fifteen cents, to $3.85 per hour. This new wage affects employers who gross more than $283,000 annually, up from the current $271,000 threshold.
Employers who gross less than $283,000 annually must pay their employees the federal minimum wage, currently set at $7.25 per hour. Fourteen and 15-year old employees must receive $7.25 per hour, regardless of company revenue. Minimum-wage workers in other states, including Arizona, Colorado, Florida, Montana, Oregon, Vermont, and Washington will also see an increase in their paychecks on January 1, 2012.
If you have any questions about complying with these new wage increases, please contact Michele L. Jakubs.
*Michele L. Jakubs, an OSBA Certified Specialist in Labor and Employment Law, has extensive experience in all aspects of workplace law, including wage and hour compliance. For more information about employment law, please contact Michele (mlj@zrlaw.com) at 216.696.4441.
As part of an Amendment to the Ohio Constitution, Ohio’s minimum wage will increase by thirty cents on January 1, 2012. The Amendment provides for an increase, tied to the rate of inflation, every January 1st. The think tank Policy Matters Ohio estimates 347,000 Ohio workers will see an increase in wages.
The hourly rate for workers 16 years and older who do not receive tips will increase thirty cents to $7.70 per hour. Tipped employees’ hourly rate will increase fifteen cents, to $3.85 per hour. This new wage affects employers who gross more than $283,000 annually, up from the current $271,000 threshold.
Employers who gross less than $283,000 annually must pay their employees the federal minimum wage, currently set at $7.25 per hour. Fourteen and 15-year old employees must receive $7.25 per hour, regardless of company revenue. Minimum-wage workers in other states, including Arizona, Colorado, Florida, Montana, Oregon, Vermont, and Washington will also see an increase in their paychecks on January 1, 2012.
If you have any questions about complying with these new wage increases, please contact Michele L. Jakubs.
*Michele L. Jakubs, an OSBA Certified Specialist in Labor and Employment Law, has extensive experience in all aspects of workplace law, including wage and hour compliance. For more information about employment law, please contact Michele (mlj@zrlaw.com) at 216.696.4441.
Wednesday, November 9, 2011
SB 5 Repealed: Now What??
*By George S. Crisci
As all of you now know, Ohio’s voters repealed Senate Bill 5 by more than 60% of the vote. This outcome is consistent with the polling data that had been conducted since last August, so the outcome was not surprising.
This outcome raises serious questions about what will happen next. There is a two-part answer.
First, Senate Bill 5 never went into effect. The successful petition drive that put the repeal referendum on the ballot delayed its effective date, if at all, until after referendum. Ohio already has a collective bargaining law and related public sector employment laws (e.g., civil service, teacher tenure, etc.); those laws remained in effective throughout the referendum campaign; and they remain in effect today. Our best suggestion is to continue living with the terms of the existing laws that had developed over the years and before Senate Bill 5 ever surfaced.
Second, there are some aspects of Senate Bill 5 that also were included in the biennial appropriations bill. Those changes survive the referendum, because a referendum cannot repeal an appropriations measure. Those changes address: (1) licensure examinations, evaluations, performance-based compensation and layoffs for public school teachers; (2) laying off or transferring public school transportation employees and replacing them with independent contractors; (3) limiting sick leave benefits for less than regular full-time public school employees; (4)restructuring low-performing public schools; (5) health care plans requirements for certain political subdivisions; and (6) civil service appointment and promotion selection procedures. Public sector employers who are subject to these provisions in the biennial appropriations bill should continue their efforts to comply. If you have any questions concerning the changes that survived the repeal of Senate Bill 5 or whether you are subject to these requirements, please contact us.
Finally, commentators and political analysts have started discussions about how Governor Kasich and the Republican leadership will respond to the repeal of Senate Bill 5. Any such discussions are grounded in speculation and uncertainty. It is too soon to tell what, if anything, will happen and when it will occur. We will continue to monitor the situation and alert you to any significant and substantive developments.
*George S. Crisci
, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of labor and employment law. For more information about legislation affecting the public sector, or any other labor or employment issue, please contact George at 216.696.4441 or gsc@zrlaw.com.
As all of you now know, Ohio’s voters repealed Senate Bill 5 by more than 60% of the vote. This outcome is consistent with the polling data that had been conducted since last August, so the outcome was not surprising.
This outcome raises serious questions about what will happen next. There is a two-part answer.
First, Senate Bill 5 never went into effect. The successful petition drive that put the repeal referendum on the ballot delayed its effective date, if at all, until after referendum. Ohio already has a collective bargaining law and related public sector employment laws (e.g., civil service, teacher tenure, etc.); those laws remained in effective throughout the referendum campaign; and they remain in effect today. Our best suggestion is to continue living with the terms of the existing laws that had developed over the years and before Senate Bill 5 ever surfaced.
Second, there are some aspects of Senate Bill 5 that also were included in the biennial appropriations bill. Those changes survive the referendum, because a referendum cannot repeal an appropriations measure. Those changes address: (1) licensure examinations, evaluations, performance-based compensation and layoffs for public school teachers; (2) laying off or transferring public school transportation employees and replacing them with independent contractors; (3) limiting sick leave benefits for less than regular full-time public school employees; (4)restructuring low-performing public schools; (5) health care plans requirements for certain political subdivisions; and (6) civil service appointment and promotion selection procedures. Public sector employers who are subject to these provisions in the biennial appropriations bill should continue their efforts to comply. If you have any questions concerning the changes that survived the repeal of Senate Bill 5 or whether you are subject to these requirements, please contact us.
Finally, commentators and political analysts have started discussions about how Governor Kasich and the Republican leadership will respond to the repeal of Senate Bill 5. Any such discussions are grounded in speculation and uncertainty. It is too soon to tell what, if anything, will happen and when it will occur. We will continue to monitor the situation and alert you to any significant and substantive developments.
*George S. Crisci
, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of labor and employment law. For more information about legislation affecting the public sector, or any other labor or employment issue, please contact George at 216.696.4441 or gsc@zrlaw.com.
Subscribe to:
Posts (Atom)