July 2009

Hot Topics in LABOR LAW REPORTS:

Supreme Court will hear Granite Rock case against Teamsters
The U.S. Supreme Court will hear Granite Rock Co.'s challenge to a ruling the company called a "blueprint for industrial chaos," in a case where the International Brotherhood of Teamsters stand accused of interfering with a labor contract between the company and a Teamsters local by causing a strike

Granite Rock and Local 287 were parties to a collective bargaining agreement. Negotiations between the parties were unsuccessful before that agreement expired, and Local 287 members went on strike. The parties reached a tentative four-year agreement, which contains a no-strike clause and a broad arbitration clause. Subsequently, Local 287 instructed workers not to return to work and the International Brotherhood of Teamsters (IBT) gave the employees benefits. Granite Rock brought the suit under the Labor Management Relations Act (LMRA) against Local 287 for breach of contract and against IBT for tortious interference with contract. The district court granted IBT's motion to dismiss the complaint for failure to state a claim, but denied Local 287's motion to compel arbitration of the dispute. Granite Rock and Local 287 appealed.

The Ninth Circuit Court of Appeals affirmed. The Court reasoned that the plain language of the LMRA requires that "the underlying agreement must have created the rights or liabilities which the parties seek to vindicate by their suit." Because the agreement between Granite Rock and Local 287 neither mentioned IBT nor governed any rights or duties of IBT, the claim is outside the scope of LMRA, and the claim against IBT must be dismissed. With regard to the motion to compel arbitration, the Court followed the rule established by the United States Supreme Court: "[u]nless the challenge is to the arbitration clause itself, the issue of the contract's validity is considered by the arbitrator in the first instance." The Court held that Granite Rock has no ground to repudiate the arbitration agreement because it did not challenge the arbitration clause. The Court reversed and remanded the case for arbitration. (Granite Rock Corp v Teamsters, 9thCir, 156 LC ¶11,110).

President Obama rounds out his picks for vacant NLRB seats
Beginning late April of this year, President Obama made his first of three nominations to the NLRB. The Board, presently composed of Chairman Wilma Liebman (D) and Member Peter Schaumber (R), has been the focus of judicial scrutiny over whether it has the authority to issue decisions as a quorum of just two. That issue was petitioned to the Supreme Court on May 27th. With that backdrop, one would believe that seating new members to the Board ought to move quickly.

While perhaps more urgent matters have stolen the spotlight, here are the President's picks for Member, National Labor Relations Board:

• Republican Senate staffer Brian Hayes. Hayes currently serves as the Republican labor policy director for the Senate Committee on Health, Education, Labor and Pensions. Previously, he was in private practice for over 25 years, representing management clients exclusively in all aspects of labor and employment law. Hayes has represented employers before the Board, the EEOC, and various state agencies and has extensive experience negotiating labor contracts on behalf of management clients, as well as representing clients in arbitrations, mediations and other forms of alternative dispute resolution. Before entering private practice, Hayes clerked for the Chief Judge of the NLRB and thereafter served as counsel to the Chairman of the NLRB. Hayes earned his J.D. from Georgetown University Law Center.
• Democrat Craig Becker. Becker is associate general counsel to both the SEIU and the AFL-CIO. He received his J.D. from Yale Law School and has practiced and taught labor law for the past 27 years, as a professor of law at the UCLA School of Law and at the University of Chicago and Georgetown. Becker has published numerous articles on labor and employment law in scholarly journals and has argued labor and employment cases in virtually every federal court of appeals and before the US Supreme Court.
• Mark Pearce, Democrat and founding partner of Creighton, Pearce, Johnsen & Giroux, a Buffalo, New York, law firm. Pearce practices union-side labor and employment law before state and federal courts and agencies. In 2008, he was appointed to the New York State Industrial Board of Appeals, an independent quasi-judicial agency responsible for review of certain rulings and compliance orders of the state department of labor in wage and hour matters. Prior to 2002, he practiced union-side labor law and employment law at Lipsitz, Green, Fahringer, Roll, Salisbury & Cambria LLP, and from 1979 to 1994 was an attorney and district trial specialist for the NLRB. Pearce received his J.D. from State University of New York. He is a Fellow in the College of Labor and Employment Lawyers.
  All three nominations have been sent to the Senate; however, hearings have yet to be set on the Health, Education, Labor and Pensions Committee calendar. It's also unclear whether the three will be considered as a package or individually.
  

Oregon Governor signs workplace communications bill
Oregon Governor Ted Kulongoski (D) signed into law a bill (S.B. 519a) on June 30, 2009, that prohibits employers in the state from taking adverse employment actions against employees who decline to attend or participate in employer-sponsored meetings the primary purpose of which is to communicate the employer's position on religious and political matters, including meetings on union organizing. The bill passed the House on June 19 by a vote of 34-24. The Senate narrowly passed the bill June 8 in a 16-14 vote. The law is scheduled to take effect on January 1, 2010.

According to the law, "political matters" includes political party affiliation, campaigns for legislation or candidates for political office and the decision to join, not join, support or not support any lawful political or constituent group or activity. "Constituent groups" include, but are not limited to, civic associations, community groups, social clubs and mutual benefit alliances, including labor organizations. "Religious matters" includes religious affiliation or the decision to join, not join, support or not support a bona fide religious organization. The bill does not prohibit a religious organization from requiring its employees to attend an employer-sponsored meeting or to participate in any communications with their employer for the primary purpose of communicating the employer's religious beliefs, practices or tenets. In addition, the bill does not prohibit political organizations from requiring its employees to attend an employer-sponsored meeting or to participate in any communication with the employer for the primary purpose of communicating the employer's political tenets or purposes.

An aggrieved employee may bring a civil action to enforce the provisions of the bill no later than 90 days after the date of the alleged violation in the circuit court of the judicial district where the violation is alleged to have occurred or where the principal office of the employer is located. The court may award a prevailing employee all appropriate relief, including injunctive relief, rehiring or reinstatement of the employee to the employee's former position or an equivalent position, back pay and reestablishment of any employee benefits, including seniority, to which the employee would otherwise have been eligible if the violation had not occurred and any other appropriate relief as deemed necessary by the court to make the employee whole. The court may award a prevailing employee treble damages, together with reasonable attorney fees and costs.

During debate on the bill, Oregon's Association of Oregon Industries, the state's largest business association, said the bill "effectively prohibits employers from requiring attendance at employer-paid meetings to discuss these issues even though the meetings are protected under federal law."

President Obama nominates George Cohen to Director, FMCS
On June 29, 2009, President Obama announced his nomination of George H. Cohen for Director of the Federal Mediation and Conciliation Service. Cohen, a distinguished labor lawyer, negotiator, and mediator, was a senior partner at the law firm of Bredhoff & Kaiser from 1966-2005. Cohen had a national practice, specializing in representing private and public sector labor organizations in collective bargaining involving a wide variety of industries and government entities.

Prior to entering into private practice, Mr. Cohen served as an appellate court attorney with the National Labor Relations Board. He is a graduate of Cornell University and its Law School and earned a LLM degree from Georgetown Law. In the past three years he has been engaged in a solo practice as a mediator. He is a member of the prestigious Mediation Panel of the U.S. Circuit Court of Appeals for the D.C. Circuit and has successfully mediated numerous complex, high profile disputes. From the mid 1970's thru 2005, he was an Adjunct Professor at Georgetown Law School where he taught the Art of Collective Bargaining and other labor courses.
Federal Labor Relations Authority announces key nominations by President Obama

Carol Waller Pope, Chairman of the Federal Labor Relations Authority (FLRA), announced that President Obama nominated Ernie DuBester as a Member of the FLRA, and Julia A. Clark as the General Counsel of the FLRA. Chairman Pope expressed her pleasure at the prospect that these positions will be filled following Senate confirmation by individuals with such a wealth of experience in labor-management relations and dispute resolution.

Ernie DuBester has 35 years of experience in labor-management relations. Nominated by President Clinton, Mr. DuBester served as Chairman and Member of the National Mediation Board (NMB) from 1993-2001. He began his career at the National Labor Relations Board (NLRB) serving as counsel to former Chairman and Member John Fanning. He also served as a Union attorney with the firm of Highsaw & Mahoney, and as legislative counsel to the AFL-CIO. In addition, Mr. DuBester served as Professor and Director of the Dispute Resolution Program at George Mason University School of Law. He previously taught collective bargaining and arbitration at the Catholic University of America School of Law. Since July of 2005, he has worked as a mediator at the NMB. Mr. DuBester received his undergraduate degree from Boston College, his law degree from the Catholic University of America School of Law, where he was Recent Developments Editor of the Law Review, and his Masters of Law in Labor Law from the Georgetown University Law Center.

Julia A. Clark, currently serves as General Counsel of the International Federation of Professional and Technical Engineers, AFL-CIO. She received her J.D. in 1980 from the American University, Washington College of Law, and her B.A. in 1977 from Oklahoma Baptist University. She started her legal career as an Honors Program trial attorney in the United States Department of Justice, Antitrust Division. For the past 20 years she has practiced labor and employment law on behalf of unions and workers and before Federal courts and agencies, including the FLRA, the NLRB, the NMB and the Personnel Appeals Board of the General Accountability Office.

The FLRA is an independent agency that administers the labor-management relations program for 1.9 million non-Postal Federal employees worldwide, approximately 1.1 million of whom are exclusively represented in 2,200 bargaining units. It is charged with providing leadership in establishing policies and guidance related to Federal sector labor-management relations and with resolving disputes under and ensuring compliance with the Federal Service Labor-Management relations Statute.
Steelworkers ratify agreement with MeadWestvaco

Updating an earlier report, the United Steelworkers (USW) Local 8-675 in Covington, Virginia has voted in favor of a proposed new contract with MeadWestvaco. The overwhelming ratification vote took place on Wednesday, July 1, 2009.

The new agreement includes $2,600 in cash bonuses and over 16% in general wage increases over the course of its six-year term. Improvements to the defined benefit pension plan raise the multiplier to $58 per month for each year of service, meaning that an employee who retires with 30 years of service would receive a monthly benefit of roughly $1,740 per month, a high-water mark in for workers in the paper industry.

USW International Vice President Jon Geenen, the union's top official with responsibility for paper bargaining, said that this groundbreaking new agreement will raise the bar for the entire industry.

"After two years of strife and division, we believe that this contract, by virtue of the significant gains it establishes, will once again unite the members of Local 8-675," Geenen said. "We are scheduling a new local union officers' election here in Covington that will create a structure inclusive of all views from every area of the mill to build an even stronger local union."

Finally, Geenen said that the hard work of the local union negotiating team and the support and solidarity of the loyal USW members are what enabled the USW, which is still the only Board-recognized bargaining representative at the Covington mill, to conclude these negotiations so successfully.

Source: United Steelworkers (USW)

Arbitrator orders AK to keep Askland plant operating
An independent arbitrator has ordered AK Steel to abandon plans to shut down its Ashland, Ky. plant and lay off about 750 workers and instead look at cutting production elsewhere because the United Steelworkers' (USW) contract contains a provision to prevent its members being laid off while other plants are operating.

In explaining his ruling, Arbitrator Raymond F. Sekula wrote in his final award and decision that "the failure of the Company to temper its 'full capacity' commitment to the Ashland bargaining unit except in cases in which there is no demand at all for Ashland products acts as a restriction on the Company in that if there is customer demand for products which can be produced at Ashland, that work must contractually be assigned to it."

USW International President Leo W. Gerard added a warning to employers that the USW will continue to enforce its contractual protections, no matter what market conditions are or how difficult economic times become.

"We promised job and earnings security in Ashland and delivered," said Gerard. "We promised to fight for fairness and dignity for our members and we're true to our word."

Source: United Steelworkers (USW)

GSA issues proposed rule on project labor agreements
The General Services Administration (GSA), Department of Defense and National Aeronautics and Space Administration (NASA) have issued a proposed rule on the use of project labor agreements for federal construction projects. The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council are proposing to amend the Federal Acquisition Regulation (FAR) to implement Executive Order (E.O.) 13502, "Use of Project Labor Agreements for Federal Construction Projects."

The proposed rule was issued in the July 14, 2009 Federal Register (74 FR 33953). Full text of the rule can be found at: http://edocket.access.gpo.gov/2009/pdf/E9-16619.pdf

Background

On February 6, 2009, President Obama issued E.O. 13502, which encourages executive agencies to consider requiring the use of project labor agreements in connection with large-scale construction projects in order to promote economy and efficiency in federal procurement. The E.O. encourages executive departments and agencies to consider the use of project labor agreements for construction projects where the total cost to the government is valued at $25 million or more and permits agencies on a project-by-project basis to require the use of a project labor agreement where certain criteria would be met.

The term "project labor agreement" means a pre-hire collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project and is an agreement described in 29 U.S.C. 158(f).

The E.O. describes how project labor agreements may help agencies manage workforce challenges that arise in connection with large-scale construction projects. For example, large-scale construction projects typically involve multiple employers at a single location.

The E.O. explains that a "lack of coordination among various employers, or uncertainties about the terms and conditions of employment of various groups of workers, can create friction and disputes in the absence of an agreed-upon resolution and mechanism." The use of project labor agreements may "prevent these problems from developing by providing structure and stability to large-scale construction projects thereby promoting the efficient and expeditious completion of Federal construction contracts." A project labor agreement may help an agency manage these problems by providing an agreed-upon resolution mechanism that promotes the efficient and expeditious completion of Federal construction projects.

Proposed FAR amendments
In accordance with E.O. 13502, this proposed rule amends the FAR to:

• Provide a new FAR Subpart 22.5, Use of Project Labor Agreements for Federal Construction Projects;
• Add a new provision at 52.222-XX, Notice of Requirement for Project Labor Agreement, to be included in solicitations where the agency has exercised its discretion to require a project labor agreement as prescribed at FAR 22.505(a);
• Add a new clause 52.222-YY, Project Labor Agreement, to be included in contracts in accordance with FAR 22.505(b).
  

Comments sought
The Councils invite comment on the process, in which the solicitation incorporates the provision providing for submission of the project labor agreement prior to the contract award (i.e., should agencies require this from each offeror as part of its bid or only from an apparent successful offeror).

The Councils are also considering factors for the contracting officer to consider, on a project-by-project basis, in determining whether use of a project labor agreement will be in the best interest of the government. The Councils welcome public comment on the factors that should be considered, such as the difficulty of coordinating multiple contracts in the absence of a project labor agreement, the importance of timely project completion, etc.

The Director of the Office of Management and Budget (OMB) is working with the Secretary of Labor and other officials to provide recommendations to the President on whether to broaden the application of project labor agreements on both construction projects awarded under federal contracts and construction projects receiving federal financial assistance, to promote the economical, efficient, and timely completion of such projects.

Interested parties should submit written comments on or before August 13, 2009 to be considered in the formulation of a final rule.

Former SEIU-UHW officials hit with preliminary injunction over effort to create new union
A U.S. District Court judge for the Northern District of California granted July 27, 2009, SEIU-UHW members a preliminary injunction against the local union's former officers and agents, finding that they "filched" and "sabotaged" files, records, and union property as part of their plan to form a new union.

After their removal from the union for, among other things, transferring $3 million in members' dues to a sham non-profit organization for their personal use, former SEIU-UHW President Sal Rosselli and other top union officials formed a new organization, the National Union of Healthcare Workers (NUHW).

"Upon leaving UHW, the individual defendants took and reproduced UHW property for use at NUHW and destroyed other UHW property in an effort to hamstring their soon-to-be competitor," wrote U.S. District Judge William Alsup.

"The ousted officers purposely tried to undermine the very members they now say they want to represent," said Dave Regan, who was named trustee of SEIU-UHW following the former officers removal. "They stole documents. They destabilized contracts. They left a lot of hardworking healthcare providers vulnerable at a time when California was in an economic crisis."

Judge Alsup found that the former officials had a scheme to "disrupt union operations so as to make the situation ungovernable" and, as they launched a new and competing union, "filch[ed] or sabotag[ed] UHW property and information or aid[ed] and abett[ed] others in doing so."

The court also found that, in addition to this scheme, Rosselli and his agents "deleted files on their UHW computers on a massive scale," and that Rosselli -- in direct contradiction to his sworn testimony at a previous court hearing -- himself deleted more than 12,000 files from his computer. The court also found that the defendants still have yet to return essential bargaining, grievance and arbitration files, particularly files relating to bargaining and grievances among hospitals in the Sutter and Kaiser hospital systems.

The defendants charged by the order include Sal Rosselli, Jorge Rodriguez, Joan Emslie, John Borsos, John Vellardita, Gabe Kristal, Paul Kumar, Martha Figueroa, Barbara Lewis, Phyllis Willett, Daniel Martin, Laura Kurre, Ralph Cornejo, Will Clayton, Glenn Goldstein, Fred Seavey, Mark Kipfer, Aaron Brickman, Ian Selden, Gail Buhler, Freja Nelson, Andrew Reid, National Union of Healthcare Workers.

Source: SEIU United Healthcare Workers-West

NLRB rejects employers' recognition challenges arising from UNITE HERE split
The National Labor Relations Board (NLRB) has upheld the dismissal of a petition filed by a California-based laundry company challenging the representative status of Workers United, a Service Employees International Union (SEIU) affiliate union that was formed by former UNITE HERE members who splintered off from that union due to an ongoing internal rift. A Regional Director rejected the employer's contention that both Workers United and UNITE HERE were seeking representative status, thus a question concerning representation existed. The NLRB affirmed.

The employer, Royal Laundry, contested Workers United Local 75's status at the San Francisco industrial laundry after UNITE HERE also claimed to be the workers' bargaining agent. Royal ceased contract negotiations with Local 75, denied union representatives access to the workplace, withheld union dues, and refused to process workers' grievances.

Several employers have attempted to use the ongoing dispute between the two unions as a basis for refusing to recognize the incumbent union that was elected as their employees' exclusive bargaining rep. In particular, employers filed petitions with the NLRB in an attempt to end Workers United's representation of their workers.

NLRB Regional Directors have since issued six decisions finding that Workers United affiliates are the proper bargaining representatives. All have determined that the Workers United affiliates maintained continuity of representation and that disaffiliation from UNITE HERE did not affect continuity of representation. The same stewards, local officers, and union staff continued to bargain and administer the contracts, the decisions noted. Therefore, the employers had to recognize the Workers United affiliates, the Regional Directors ruled, dismissed the employers' petitions.

The decisions were made in Michigan (Continental Linen Services, GR-7-RM-1491), Ohio (Premair of Cleveland, 8-RM-1111), Missouri (Gateway Packaging Co of Missouri, 17-RM-864), Minnesota (Radisson Duluth Hotel, 18-RM-1380), and California (Royal Laundry, 20-RM-2868), (Angelica Textile Services, Inc, 21-RM-2676).

Based on the recent Board decision upholding the Royal Laundry ruling, the NLRB General Counsel will begin issuing complaints against employers that refuse to bargain with, to process grievances and arbitrations with, provide access to and to remit dues to Workers United affiliates.

DOT reinstates rule requiring direct observation of urine testing
The US Department of Transportation (DOT) has reinstated its 2008 final rule subjecting transportation industry workers in safety-sensitive positions to direct observation for all return-to-duty and follow-up drug tests, according to a notice published in the July 30, 2009, Federal Register. The rule takes effect August 31.

Acting pursuant to the Omnibus Transportation Employee Testing Act of 1991, DOT published a final rule amending its drug testing regulations (codified at 49 CFR §40.67) on July 25, 2008, to require pre-employment, random, and postaccident drug and alcohol tests for employees throughout the transportation industry. Employees who fail or refuse to take the tests are barred from performing safety-sensitive duties until they complete a treatment program under the supervision of a substance abuse professional. Employees who successfully complete the program must then pass a "return-to-duty" urine test before resuming safety-sensitive duties. During the next twelve months, employees must also pass at least six unannounced "follow-up" urine tests.

Prior to the rulemaking, employers had the option of conducting return-to-duty and follow-up tests using so-called "direct observation," a procedure that requires a same-gender observer to "watch the urine go from the employee's body into the collection container." Concerned that employers were underutilizing this option, DOT promulgated the rule to require transportation industry employers to use direct observation for all return-to-duty and follow-up testing. The regulation also requires that immediately prior to all direct observation tests, employees must raise their shirts above the waist and lower their lower clothing so as to expose their genitals and allow the observers to verify the absence of any cheating devices.

Several transportation industry unions and the BNSF Railway Company filed a petition for review on August 13, 2008, challenging the rule, which was scheduled to take effect August 27, 2008. On November 12, 2008, the DC Circuit stayed the direct observation mandatory requirement pending the court's resolution of the matter. In order to comply with the court-ordered stay, DOT again made the regulation optional (BNSF Railway Co v DOT, DCCir, No 08-1264).

On May 15, 2009, the DC Circuit held that DOT acted neither arbitrarily nor capriciously in enacting the rule, nor were they in violation of the Fourth Amendment (see ¶69,015D). The agency had a "considered justification" for the rule, wrote the circuit court, having determined that "the growth of an industry devoted to circumventing drug tests, coupled with returning employees' higher rate of drug use and heightened motivation to cheat, presented an elevated risk of cheating on return-to-duty and follow-up tests." Moreover, as the rule applied only to employees who failed or refused to take previous drug tests, the regulation balanced the government's compelling interest in transportation safety with employees' freedom from intrusive searches. Therefore, even though the DC Circuit court recognized the "highly intrusive nature of direct observation testing," it concluded that the regulations complied with the Fourth Amendment.

Because there was an opportunity for the parties to seek rehearing of the DC Circuit's ruling, the court's stay continued to effect. Ultimately, the DC Circuit issued a mandate on July 1, 2009, which finalized the decision, thereby lifting the stay.

In the Federal Register notice, DOT noted that some employers and labor organizations may have entered into collective bargaining agreements (CBAs) that prohibit or limit the use of direct observation collections in return-to-duty and follow-up testing situations. "Employers and employees, of course, do not have the authority to agree to avoid compliance with the requirements of federal law," said DOT. When the final rule takes effect, conducting all follow-up and return-to-duty testing using direct observation collections will be a requirement of federal law and "[e]mployers must use direct observation collections for such tests that take place after the effective date of this rule, and any contrary provisions of CBAs in the present or in the future will not be effective," confirmed DOT.
Machinists ratify national UPS contract

International Association of Machinists (IAM) members at United Parcel Service (UPS) have approved a new contract covering 3,200 maintenance workers at 33 locations across the United States. Members voted to approve the contract by an 82 percent margin, according to the union.

The five-year agreement includes annual wage increases, improved pension contributions, eligibility for the IAM 401(k) plan and improved tool allowances. Members' health care benefits under the new agreement will remain intact.

"This agreement is a credit to the solidarity of our members and the hard work of our negotiating committee and UPS to find a way to increase wages and benefits during these tough economic times," said IAM automotive department director Boysen Anderson.

Kroger, UFCW Local 75 reach tentative contract agreement
The Kroger Co has reached a tentative agreement on a new contract with the United Food & Commercial Workers, Local 75, in Dayton, Ohio. The agreement would cover more than 4,000 Kroger workers at 30 stores in Dayton and the surrounding area.

The UFCW 75 leadership will present the fully recommended tentative agreement to its members for ratification during a meeting scheduled for August 12. Details of the agreement are not being released pending ratification. However, according to the UFCW, the agreement secures "fair wages and affordable health care over the life of the contract," including benefit improvements without any increase in employee contributions. The Dayton agreement is consistent with the contract reached for Cincinnati Kroger workers in 2007, the union said.

"Both Local 75 and Kroger came together and worked hard to reach an agreement that provides quality jobs, increased wages, a stable pension fund, and affordable, quality health care for associates and their families," said Geoff Covert, president of Kroger's Cincinnati/Dayton Division. "This tentative agreement also keeps Kroger competitive in this marketplace."

Kroger is one of the nation's largest retail grocery chains, employing more than 326,000 workers in over 2,500 retail stores.

LEADING CASE NEWS

DCCir: Selective enforcement of email policy violated NLRA
An employer's selective enforcement of its email policy violated the NLRA, the DC Circuit held, issuing a narrow, fact-based ruling in a case that had inspired a rare oral argument before the NLRB—and leaving for another day the broader issue of whether employee use of an employer's e-mail system is in itself protected activity under the Act. The employer twice disciplined a union president for using her work email to send union-related messages; one clarified an earlier email, while two others solicited support for the union. While it was undisputed that the employer's email policy forbade email use for "non-job-related solicitations," the union argued the first email was not covered by the policy and that, in regards to the other emails, the employer selectively enforced that policy to discriminatory ends. Since the first email was not a solicitation, the employer's decision to discipline the employee over it violated the Act, the appeals court held. The court found that the employer's discipline over the other emails also violated the Act. While the Board ruled that the discipline was not discriminatory because there was no evidence the employer had allowed other employees to solicit on behalf of groups, the appeals court found the employer selectively applied its policy, noting that even though the policy did not draw a distinction between solicitation for groups or individuals, "in practice the only employee e-mails that had ever led to discipline were the union-related e-mails at issue here," and that email solicitations on behalf of individuals had been allowed. Moreover, the employer had specifically warned the employee not to use email for union purposes (Guard Publishing Co dba Register Guard v NLRB, July 7, 2009).

9thCir: Non-signatory employer was not liable for ERISA contributions
A joint employer that was not a signatory to a collective bargaining agreement is not liable under ERISA for contributions to an employee benefit plan, the Ninth Circuit has ruled. However, it reversed and remanded a district court finding that the total amount of compensation paid by the two employers does not serve as the basis for contribution. Trustees of multi-employer employee benefit plans sued a non-signatory employer, contending the employer was liable under ERISA for contributions made as a joint employer. The appeals court held the joint employer theory could not be used to impose obligations on the non-signatory company. The court reasoned that the trustees' attempt to impose obligations over and above those required by the bargaining agreement directly conflicts with the plain language of ERISA. However, the signatory joint employer could be liable for contributions based on the gross compensation the two employers paid to the employee. The bargaining agreement obligated employers to contribute an amount equal to a specific percentage of the gross compensation, but did not identify which employer paid the gross compensation. As the language was ambiguous, the appeals court remanded the question for a determination of the parties' past practice (Trustees v NYCA, Inc, July 15, 2009).

FedCir: Discharge for service-related absences violated USERRA
The Merit Systems Protection Board (MSPB) erred in rejecting an employee's claim that he was terminated due to his military service in violation of the Uniformed Services Employment and Reemployment Rights Act (USERRA), ruled the Federal Circuit Court of Appeals. In a four-year period, the employee had only worked for the employer for four days due to military obligations. The employer, after speaking with the employee, later discharged him for "excessive use of military leave." The employee then brought an action under USERRA, claiming the employer discharged him based on his military service. After an administrative ruling on the issue, the employee sought review by the full MSPB, which ruled his military service was not a motivating factor in his dismissal. The appellate court noted that "the [MSPB] found that [the employee] had failed to show that his military service was a motivating factor…because the ‘real reason' for his removal was his absence from work…" However, this reasoning went against the very tenets of what the USERRA seeks to protect, the court concluded, reversing the MSPB. An employer "cannot escape liability…by claiming that it was merely discriminating against an employee on the basis of his absence when that absence was for military service," the court wrote (Erickson v US Postal Service, July 15, 2009).

NLRB: Discriminatee's remedy not affected by felony, quitting interim job, medical leave
A hospital's back pay and reinstatement obligations for unlawfully discharging an x-ray technician were not effected by the ex-employee's subsequent felony conviction for attempting to solicit a controlled substance by fraud, her quitting an interim job, or her extended medical leave in a subsequent job, the NLRB held, adopting a law judge's determination. First, the employer had a past practice of dealing with comparable drug abuse via an employee assistance program and it was unknown whether the discharged employee would have availed herself of the program because she had been unlawfully discharged two years before she committed the crime. Thus, the employer failed to prove it would have discharged the employee for the felony conviction so as to disqualify her for reinstatement or toll the back pay owed. Second, the law judge credited the ex-employee's reason for quitting an interim job—that the scheduled work hours became incompatible with child-care needs—and the Board found the law judge implicitly discredited testimony from the past employer to the contrary. Finally, the employer failed to prove that the ex-employee's eight-month medical leave of absence from a subsequent job would have resulted in her lawful discharge under the employer's policy, precluding reinstatement and further back pay. The employer argued it had a practice of requiring those who exhaust FMLA leave to return and work at least three shifts to gain a two-month extension or face discharge, yet the written policy itself allowed for both an extension of FMLA leave and a personal leave of absence that could have been read to cover the eight-month leave. Thus, the defenses did not negate any remedial obligations imposed for the unlawful termination (Jackson Hospital Corp dba Kentucky River Medical Center, 345 NLRB No 42, July 9, 2009).

SDNY: Court strikes ruling voiding Frontier Airlines bargaining agreements
A federal district court in New York has vacated a bankruptcy court ruling that erroneously voided an airline’s collective bargaining agreements with the Teamsters union, finding the bankruptcy court erroneously applied the standards set forth in section 1113 of the Bankruptcy Code when it considered the airline’s proposal to modify the bargaining agreement after the 1113 hearing already had begun. The bankruptcy statute does not allow for rejection of a bargaining agreement based on a modification proposal made after a debtor-employer’s application to reject the contract, the district court concluded. Nor does the code permit rejection based upon a debtor-employer’s disclosure efforts made during a section 1113 hearing. Finally, the court rejected the airline’s assertion that the union’s conduct during the hearing amount to a waiver of any objection to these mid-hearing developments. The bankruptcy court’s ruling had effectively allowed the airline to implement a unilateral 14 percent cut in wages, among other terms (Teamsters Airline Div v Frontier Airlines, Inc, July 20, 2009).

WAGES HOURS – FMLA

House-passed bill allowing flight attendants, pilots to take FMLA leave introduced in the Senate
A bill (S. 1422 ) clarifying that flight attendants and pilots are eligible for 12 weeks of unpaid leave under the Family and Medical Leave Act of 1993 (FMLA) was introduced on July 9, 2009, by Senator Patty Murray (D-Wash) and a bipartisan group of senators. Called the Airline Flight Crew Technical Corrections Act, the Senate bill is substantially similar to H.R. 912, which passed the House on February 9 by voice vote.

"Pilots and flight attendants deserve the same ability to balance work and family that is already guaranteed to millions of working Americans," said Senator Murray. "These men and women spend long days, nights and sometimes weeks apart from their families and homes, and they should be able to take the time off they need. The intention of the FMLA was never to exclude these workers. This bill ensures that the airline industry's time-keeping methods don't limit the time flight crews get to care for themselves and their families."

To qualify for FMLA leave, an employee must work 60 percent of a full time schedule or 1,250 hours per year. Courts calculate the requisite number of hours using the Fair Labor Standards Act (FLSA), which covers most workers. However, the hours worked by airline flight crews are calculated differently. Unlike most workers, most flight crewmembers are not credited for each hour they spend on the job. Instead, they are only credited for actual time "in flight" time --hours generally spent while the plane is moving --even though they spend much more time at work, like the time they spend between flights. This means that time between flights, such as overnights and layovers does not count toward FMLA coverage and has resulted in flight crews being excluded from receiving unpaid leave.

According to the bill's sponsors, the Airline Flight Crew Technical Corrections Act would clarify the FMLA to reflect the original intent of Congress to include these workers under Act's protections. This means that flight attendants and pilots would qualify for leave when they have fulfilled 60 percent of a full-time work schedule (or the "monthly guarantee") at their airline.

The legislation is endorsed by the Association of Flight Attendants-CWA, the Air Line Pilots Association, the International Association of Machinists, the International Brotherhood of Teamsters, the Transport Workers Union, the United Steelworkers and the National Partnership for Women & Families.

Senator Murray's bill is co-sponsored by Senators Chris Dodd (D-Conn), Kit Bond (R-Mo), Susan Collins (R-Maine), Lisa Murkowski (R-Ark), and Jim Webb (D-Va). The bill has been referred to the Senate Health, Education, Labor and Pensions Committee.

Bill would amend FMLA's military family leave provisions
A bill (S. 1543/H.R. 3403) that would extend up to 26 weeks of unpaid leave to family members of injured veterans for five years after the veteran leaves service was introduced in Congress on July 30, 2009.

Called the Supporting Military Families Act of 2009, the bill expands on the Fiscal Year 2008 National Defense Authorization Act (NDAA) (P.L. 110-181), which amended the Family and Medical Leave Act of 1993 (FMLA) to provide that eligible employees, who are the spouse, son, daughter, parent or next of kin of covered servicemembers in the Armed Forces, including members of the National Guard or Reserves, are entitled to 26 workweeks of leave during a 12-month period to care for that servicemember, who because of a serious injury or illness, is undergoing medical treatment, recuperation, or therapy, otherwise in outpatient status, or is otherwise on the temporary disability retired list. The bill was introduced by Senator Chris Dodd (D-Conn) and Representative Lynn Woolsey (D-Cal).

A number of service-related illnesses and injuries may not manifest themselves until after a servicemember has left the military, according to Dodd and Woolsey in a July 30, 2009, release. The bill would extend the 26 weeks of leave to family members of veterans for up to five years after a veteran leaves service, if he or she develops a service-related injury or illness that was incurred, or, in the case of an existing injury, was aggravated, while on active duty.

The bill would also extend eligibility for exigency leave to all active duty personnel deployed to a foreign country in order to provide another needed benefit to families who struggle with the challenges of a deployment. The NDAA, which was signed into law by President Bush on January 28, 2008, also amended the FMLA to provide eligible employees with up to 12 workweeks of leave during any 12-month period for certain qualifying exigencies arising out of the fact that the employee's spouse, son, daughter, or parent (i.e., the covered military member) is on active duty (or has been notified of an impending call or order to active duty) in the National Guard or Reserves in support of a contingency operation. The Department of Labor's FMLA regulations relating to qualifying exigency leave limited access to the leave to Reserve and National Guard members only. This was not the intent of the initial legislation, according to Dodd and Woolsey. The bill would also extend exigency leave to cover active duty members in the regular service as well.

"We must ensure that we care for the health and well-being of our war heroes and veterans, many of whom return from deployment with serious injuries and illnesses," said Dodd. "We enacted legislation last year to provide extended leave from work to allow family members to take care of their wounded warriors. The legislation we introduce today will ensure that the family members of former military personnel are also afforded the same benefits. We have a responsibility to provide our servicemembers the tools they need to recover from injuries, and this legislation will help us do that."

"Since a majority of military family members work, they too must balance work and family," said Woolsey. "This legislation makes important changes to the FMLA military family provisions that were passed last year to ensure that these workers get the time off they need to support servicemembers---and now veterans---in their families during deployment and when they are ill."

The Senate bill, which has three cosponsors, has been referred to the Committee on Health, Education, Labor and Pensions. The House bill, which has two cosponsors, has been referred to the Committees on Education and Labor, Oversight and Government Reform and House Administration.

Military Family Leave Act introduced in the Senate
A bill (S. 1441) that would amend the Uniformed Services Employment and Reemployment Rights Act of 1993 to grant military family of servicemembers temporary annual leave during the member's deployment was introduced on July 10, 2009, by Senator Ron Wyden (D-Or).

Called the Military Family Leave Act, the bill would allow the spouse, son, daughter or parent of a servicemember in the uniformed services up to two workweeks of annual leave in any 12-month period if the member receives notification of an impending call or order to active duty in support of a contingency operation or is deployed in connection with a contingency operation. Accordingly, an "eligible employee" is a family member of a member of a uniformed service; and a an employee of the employer with respect to whom leave is requested under the Act. The terms "spouse," "son or daughter" and "parent" have the same meaning as provided by the Family and Medical Leave Act of 1993. In addition, the family member would be entitled to two workweeks of leave for each servicemember called to active duty.

According to the proposed bill, leave may be taken intermittently or on a reduced leave schedule. In any case in which an employee chooses to use leave under the Act, the employee must provide such notice to the employer as is "reasonable and practicable." Leave granted under the proposed Military Family Leave Act may consist of paid leave or unpaid leave as the employer considers appropriate. If the employer provides paid leave to an employee for fewer than the total number of workweeks of leave that the employee is entitled to under the Act, the additional amount of leave necessary to attain the total number of workweeks of leave may be provided without compensation. In addition, an employee may elect, and an employer may not require the employee, to substitute any of the accrued paid vacation leave, personal leave, or family leave of the eligible employee for leave provided under the Act for any part of the total period of such leave the eligible employee is entitled to under the Act.

An employer may require, according to the bill, that a request for leave under the Act be supported by a certification, which must be provided in a timely manner. A sufficient certification would include a copy of the notification, call, or order to duty. An employee who takes leave under the Act must be restored to their same or equivalent position upon returning from leave without the loss of benefits, according to the bill's provisions. And, the bill also prevents an employer from discharging or otherwise discriminating against an employee who take such leave.

The bill has been referred to the Senate Health, Education, Labor and Pensions Committee.

Comprehensive working families bill incorporates provisions of already-introduced family and medical leave bills
A comprehensive bill (H.R. 3047) intended for working families has been introduced in the House by Representative Lynn Woolsey (D-Cal). Called the Balancing Act of 2009, the bill incorporates the provisions of several previously-introduced family and medical leave bills, including the Family Leave Insurance Act (H.R. 1723), Family and Medical Leave Enhancement Act (H.R. 824), Domestic Violence Leave Act (H.R. 2515) and the Healthy Families Act (H.R. 2460), all bill introduced in the House within the past six months. In addition to expanding family and medical leave, the proposed bill would also enhance access to childcare and in-school/after-school assistance, addressing school breakfast and lunch eligibility, child care facility financing, family care needs and telecommuting. In particular, the bill would create a pilot program to raise awareness about telecommuting among employers and to encourage employers to offer telecommuting options to employees.

Family leave insurance. The Balancing Act would provide up to 12 weeks of paid leave benefits to workers who need to care for an ill family member (including a domestic partner or the child of a domestic partner), a new child, to treat their own illness or to deal with an exigency caused by the deployment of a member of the military. Employees who take the leave would receive benefits from a federal "Family Leave Insurance Fund." Employees would contribute 0.2 percent of their annual earnings and employers would match employee payments; employees with less than 20 employees would pay a 0.1 percent premium. The program is designed to be self-financing. The Department of Labor would contract with the states to administer the program. If the state chooses not to administer, the Secretary of Labor may make an interagency agreement with the Social Security Commissioner to administer the program (similar to how the SSA carries out its disability program). These provisions are from the Family Leave Insurance Act, which was introduced in the House on March 25, 2009, by Representative Fortney "Pete" Stark (D-Cal), among other sponsors.

Family and Medical Leave Enhancement. Another part of the Balancing Act would amend the Family and Medical Leave Act (FMLA) to allow private and federal employees to take additional leave under the Act for parental involvement and family wellness. In particular, the provision would allow eligible employees under the FMLA to take time off from work to participate in or attend their children's or grandchildren's school or community organization activities ( i.e., parent/teacher conferences, scouting or sports events) and meet routine family medical care needs, including medical and dental appointments of the employee's son, daughter, spouse or grandchild or to attend to the care needs of elderly individuals who are related to the eligible employee, including visits to nursing homes and group homes.

The Balancing Act would also expand the definition of "eligible employee" under the FMLA to apply to employers with 25 or more employees within a 75 mile radius, not 50 or more as it is under current law. In addition, an eligible employee would be permitted to take parental involvement or family wellness leave under Act for up to four hours of leave in any 30-day period, not to exceed 24 hours during any 12-month period. This leave is in addition to other types of permissible leave. An eligible employee may elect, or an employer may require the employee, to substitute any of their accrued paid vacation leave, personal leave, or family leave for parental involvement and family wellness leave under the Act. In addition, an employee would be required to provide their employer with at least seven days notice or as much notice as is practicable before the date the leave is to be taken. An employer may require certification. These provisions are from the Family and Medical Leave Enhancement Act, which was introduced by Representative Carolyn Maloney (D-NJ) on February 3.

Domestic Violence Leave. The Balancing Act would also provide eligible employees up to a total of 12 workweeks of unpaid leave under the FMLA during any 12-month period to address domestic violence, sexual assault or stalking and their effects. The bill would amend the FMLA to also allow employees to care for family members who are also addressing those same issues. In addition, the bill would also include same-sex spouses (as determined under applicable state law) and domestic partners of the employee under the FMLA. These provisions are from Representative Woolsey's Domestic Violence Leave Act, which she introduced in the House on May 20.

Paid sick leave. Another component to the Balancing Act would require employers with 15 or more employees to earn up to seven paid sick days a year. Taken from the Healthy Families Act, the provision would allow the paid sick days to be used to care for an employee's own illness or physical or mental condition, to obtain a medical diagnosis, a related treatment, or preventive care, or to care for a family member for any of the above reasons. The provision would also allow employees using the paid sick leave to recover from or seek assistance related to domestic violence, stalking or sexual assault. Workers would accrue one hour of paid sick time for every 30 hours worked in order to earn up to 56 hours or 7 days of paid sick time. Employees would begin to earn paid sick time at the commencement of their employment, but would not be entitled to use the leave until after 60 days. Paid sick leave would carry over from year to year, but may not exceed 56 hours unless the employer permits additional accrual. Employers can require workers to provide documentation supporting any request for leave longer than three consecutive days, according to the bill. The Healthy Families Act was introduced in the House by Representative Rosa DeLauro (D-Conn) on May 18.

This Balancing Act, which was introduced on June 25, 2009, has 32 cosponsors. It has been referred to the House Committees on Education and Labor, Oversight and Government Reform, Armed Services, Ways and Means and House Administration.

House bill would suspend statute of limitations for FLSA suits during DOL investigations
House Democrats introduced legislation on Thursday, July 23 that they say will ensure that workers do not lose wages while the Department of Labor (DOL) investigates "wage theft" by employers who drag out agency compliance investigations. The Wage Theft Prevention Act (H.R. 3303) would amend the Portal-to-Portal Act to suspend the statute of limitations for certain rights of action under the Fair Labor Standards Act (FLSA) during investigations by the Secretary of Labor. The measure "would ensure that delays in investigating claims of wage theft will not result in a permanent loss of back pay for workers," said Rep. George Miller (D-Calif), chairman of the House Education and Labor Committee, who sponsored the bill.

The legislation is based on recommendations made in a Government Accountability Office (GAO) report released the same day, the bill's sponsors said. "The GAO found many investigations of wage theft were inadequately handled by the Bush administration's Wage and Hour Division and were dropped because the statute of limitations is too short and investigations took too long," according to the press release. "To ensure that workers do not lose their hard-earned wages, the bill would freeze the statute of limitations from the date an employer is informed of an investigation until the agency notifies the employer that the investigation has concluded." (The current statute of limitations under the FLSA is two years from the date a violation occurred, or three years for willful violations of the Act.)

The GAO report that reportedly spawned the bill was based on its undercover investigation of the DOL. The GAO found the Wage and Hour Division's complaint intake, complaint resolution, and investigation processes were ineffective and discouraged workers from lodging wage-theft complaints. In several of the division's regional offices, agency staff were directed to only record successful complaint resolutions in its database, making the Wage and Hour Division statistics appear better than they were. In addition, the GAO found that because of the lack of resources and staff, investigations on wage theft and child labor violations were frequently delayed by months or years. The full text of the GAO report can be found at: http://edlabor.house.gov/documents/111/pdf/publications/20090723GAOWage-HourRecs.pdf.

"This legislation is a simple solution to the very real problem of workers' pay being stolen by unscrupulous employers," said Miller. "This bill will hold those responsible for stealing workers' wages by helping to ensure that legitimate complaints can be properly investigated."

"Wage theft is a serious problem in this country and affects those who can least afford to lose their pay," said Rep. Lynn Woolsey (D-Calif), co-sponsor of the bill and chair of the Workforce Protections Subcommittee. "These same workers generally cannot afford a private attorney to recover their wages and must rely on the Department of Labor to pursue these claims. This bill will give the Department time to do this."

H.R. 3303 has been referred to the Committee on Education and Labor and House Judiciary Committee.

Meanwhile, the Department of Labor has recently announced that the agency will hire 250 additional investigators in the Wage and Hour Division.

LEADING CASE NEWS

6thCir: Estoppel did not bar employer from raising FMLA non-eligibility defense
An employer’s representations that an employee was being given FMLA leave did not bind it under equitable estoppel such that the FMLA’s protections were extended to him even though he was not an eligible employee, ruled the Sixth Circuit. The employee learned his position as a mechanical engineer had been eliminated after he attempted to return to work from an approved leave for an elective surgical procedure to treat his epilepsy. Prior to his surgery, he applied for leave on an FMLA form and received written notice from his employer that his leave was “pursuant to the [FMLA]” and that he was an “eligible employee” even though he was, in fact, not covered by the FMLA because the employer did not have the requisite 50 employees within 75 miles of the employee’s worksite. Deciding not to impose an additional requirement that the employee show knowledge or bad faith on the part of the employer, the Sixth Circuit found that, although the employer’s actions amounted to a definite misrepresentation of his eligibility, the employee could not show that he detrimentally relied on this misstatement of eligibility. There was no evidence to show his decision to have surgery was contingent on his understanding of his FMLA eligibility status. Rather, the record showed he had already decided upon the surgery by the time he was informed of his eligibility. Moreover, he offered no evidence to support his assertion that he would have rescheduled the surgery had he known that he was not FMLA eligible (Dobrowski v Jay Dee Contractors, Inc, July 8, 2009).

7thCir: Internal complaints must be in writing to be FLSA-protected activity
An employee who alleged he was discharged after making verbal complaints about the location of the company’s time clocks did not suffer retaliation within the meaning of the FLSA because he was not engaged in FLSA-protected activity, the Seventh Circuit ruled. The employee was suspended and then terminated after receiving several written warnings for failing to swipe in and out. The employee claimed he was discharged for making repeated verbal complaints to supervisors and to a human resources staff member that the location of the time clocks was illegal and prevented employees from being paid for time spent donning and doffing required protective gear. Addressing for the first time whether internal complaints are protected activity, the Seventh Circuit concluded, “in line with the vast majority of circuit courts to consider this issue,” that under the plain language of the FLSA, intra-company complaints are covered, and that protection from retaliation is not limited to formal complaints filed in court or with an administrative agency. However, the appeals court also held unwritten verbal complaints are not protected activity, rejecting the Secretary of Labor’s contention in an amicus brief that the retaliation provision should be read expansively to include such unwritten objections. Looking again to the language of the statute, the appeals court found the retaliation provision refers to “filing” a complaint, which connotes a complaint made in writing. Further, it noted analogous provisions in other statutes (such as Title VII and the ADEA) more broadly protect employees who have “opposed any practice,” and the FLSA’s “file any complaint” language is more narrow. Because the employee’s alleged verbal complaints were not protected, the court affirmed summary judgment to the employer (Kasten v Saint-Gobain Performance Plastics Corp, June 29, 2009).

9thCir: Court may not rely solely on uniform exemption policy to certify class
The Ninth Circuit has reversed a district court’s ruling granting class certification under FRCP Rule 23 in a wage suit against Wells Fargo, finding the lower court relied so heavily on the company’s uniform policy of treating all home mortgage consultants as exempt that it excluded all other relevant factors touching on predominance. “Such centralized rules, to the extent they reflect the realities of the workplace, suggest a uniformity among employees that is susceptible to common proof. But Wells Fargo’s blanket application of exemption status, whether right or wrong, is not such a rule,” the appeals court explained. The court compared the blanket exemption policy at hand with a hypothetical employer policy that requires employees to be at their desks for 80 percent of their workday: In a wage suit that turned on the outsides sales exemption, which applies where the employee is “customarily and regularly away from the employer’s place of business,” such a policy “would change this individual issue into a common one... and would be highly relevant to the predominance analysis,” the court explained. In contrast, the exemption policy at issue here “has no such transformative power,” the court wrote, as it “does nothing to facilitate common proof on the otherwise individualized issues.” As such, relying on the policy to the near exclusion of other relevant factors was an abuse of discretion, the court held, reversing and remanding the decision (Mevorah v Wells Fargo Home Mortgage, July 7, 2009).

9thCir: Rule 23 does not bar preemptive motions to deny class certification
A district court did not abuse its discretion by considering an employer’s motion to deny class certification before a putative class of loan consultants filed their motion to certify the class, the Ninth Circuit ruled, concluding no rule or decisional authority prohibited the employer from filing its motion to deny certification before the plaintiffs filed their motion to certify. The appeals court rejected the plaintiffs’ argument that a defense motion to deny class certification brought outside the context of a plaintiff’s motion actually seeking certification is procedurally improper per se. “Although we have not previously addressed this argument directly, we conclude that Rule 23 does not preclude a defendant from bringing a `preemptive’ motion to deny certification,” the appeals court wrote. The court also ruled the plaintiffs were given adequate time in which to conduct discovery on the question of class certification, and the lower court thus did not abuse its discretion by considering the preemptive motion to deny certification; nor did the lower court abuse its discretion in ultimately denying certification. Finally, the appeals court declined again to adopt a rule that class certification is warranted whenever an employer uniformly classifies a group of employees as exempt—for reasons set forth at greater length in the court’s Wells Fargo ruling above (Vinole v Countrywide Home Loans, July 7, 2009).

9thCir: Injunction of state rule requiring pharmacists to fill drugs was overbroad
A federal district court abused its discretion by enjoining the Washington State Board of Pharmacy from enforcing its rules requiring pharmacies and pharmacists to fill lawfully prescribed medications, including RU-486 and Plan B contraception, on the ground that the rules violate pharmacists’ free exercise rights under the First Amendment. The lower court incorrectly applied a heightened level of scrutiny to what the Ninth Circuit concluded was a neutral law of general applicability. The purpose of the new rules was not to eliminate religious objections to delivery of lawful medicines, but to eliminate all objections that do not ensure patient health, safety, and access to medication. Thus, the rules do not target practices because of their religious motivation, and rational basis scrutiny should have been applied. Moreover, the preliminary injunction was overbroad: The court erroneously treated the as-applied challenge brought by the plaintiffs as a facial challenge to the rules, and thus abused its discretion by enjoining the enforcement of the antidiscrimination provisions as to all pharmacists and pharmacies in the state of Washington who refuse to sell or dispense Plan B for any reason—religious or otherwise, including refusals grounded in individual morals, conscience, or even personal distaste or discriminatory prejudices, the appeals court noted (Stormans, Inc v Selecky, July 8, 2009).

5thCir: Employer has no obligation to reimburse H-2B workers for expenses
An employer's refusal to reimburse H-2B guest workers for certain expenses incurred prior to their relocation to the United States did not violate the FLSA, the Fifth Circuit ruled, on a petition for panel rehearing. Facing a staffing shortage, the employer used a staffing service to recruit H-2B workers. Each of the workers hired a recruitment company affiliated with the owner of the staffing service to locate H-2B opportunities, and each paid the company between $3,000 and $5,000 in recruitment, transportation and visa expenses. The H-2B workers sued the employer, alleging that its failure to reimburse for these expenses resulted in a payment of less than minimum wage, free and clear. The FLSA's wage requirements are not met when employees "kick back" wages to the employer, if the "kickback" is for the employer's benefit. The court found that, while the FLSA does not specify whether employee-paid visa expenses "belong to the guest worker," other federal regulations which assign H-2B processing fees to the workers indicate that employers are not responsible for the expense. The appeals court also held the employer didn't have an obligation to reimburse the workers for transportation expenses, citing a recently modified Department of Labor interpretation that hedged on the issue, as well as other federal regulations that assigned transportation expenses of H-2A workers (but not H-2B workers) to employers. Lastly, the employer was likewise not obligated to reimburse for recruitment expenses. The employer had no practice of forcing H-2B workers to pay such costs and did not know that the staffing companies charged a fee. Moreover, new regulations enacted after the suit was filed, which forbid employers from collecting fees from H-2B workers, strongly suggested that the employer had not previously been obligated to reimburse (Castellanos-Contreras v Decatur Hotels, Inc, July 21, 2009).

WI: No implied right to jury trial under the Wisconsin FMLA
While the federal Family and Medical Leave Act generally allows for jury trials, no such right is implied under the Wisconsin equivalent, the state supreme court found. A 20-year employee missed three days of work and requested leave under the Wisconsin Family and Medical Leave Act (WFMLA) due to a medically diagnosed back ailment. Her request was denied for being untimely filed. A few months later, she again sought to have three different days approved for WFMLA leave, and once more she was denied. This time, she was terminated for attendance violations because she had not been examined by her doctor on the days she requested leave. The employee filed a complaint with the state administrative agency, and an administrative law judge found the termination was unlawful and ordered her reinstatement. The employee then sued the employer and requested a jury trial. The trial court found that under the WFMLA, there was no express right to a jury trial. The employee appealed, and the appellate court, noting this was a case of first impression, sought review by the state high court. The Wisconsin supreme court determined there was no “implied” right to a jury trial under the WFMLA. “Asking this court to discover an implied statutory right to trial by jury in situations where the legislature has not prescribed such a right and where the constitution does not afford such a right would open a can of worms,” the court added (Harvot v Solo Cup Co, WisSupCt, July 17, 2009).

PA: State wage law applied to overtime hours worked abroad, even if FLSA did not
An employee was not entitled to overtime wages under the FLSA for the time he spent working in England and Canada, since the FLSA expressly exempted work performed outside the United States from its overtime requirements. That did not mean the hours that he worked abroad were not covered by the Pennsylvania Minimum Wage Act (PMWA), however, a federal district court ruled, denying summary judgment to his employer on his state-law overtime claim. The FLSA does not preempt the states from enacting wage laws that offer greater employee protections than state law provides. "There is nothing within the PMWA that restricts the benefits of the PMWA to work performed within the United States," the court wrote. "We are reluctant to find an unstated foreign-work exemption in the PMWA based solely on the fact that the FLSA contains such an exemption," it noted. Had the state legislature intended that work assignments performed abroad are not to be covered, it would have expressly provided for such an exemption, the court reasoned (Truman v DeWolff, Boberg and Associates, WDPa, July 7, 2009).

State employment laws and regulations, wages-hours/labor relations, July update

Arkansas Meal and Rest Periods
Effective July 31, employers must provide a reasonable unpaid break time each day to an employee who needs to express breast milk for her child. The employer must make reasonable effort to provide a room or other location close to the work area that is private, secure, and sanitary, other than a toilet stall, where an employee can express her breast milk. Break time for expressing breast milk is to run concurrently with any paid or unpaid break time already provided to the employee. The employer is not required to provide break time for purposes of expressing breast milk if to do so would create an undue hardship on the employer's operations. The employee must make a reasonable effort to minimize disruption of the employer's operations. Arkansas Code at Title 11, Chapter 5, Subchapter 1, Section 11-5-116, added by Act 621 (H.B. 1552), L. 2009, effective July 31, 2009.

Connecticut Equal Pay
Connecticut's equal pay for equal work law is amended to clarify exceptions allowing for a pay differential and to prohibit retaliation for filing a wage complaint. The law is further amended to provide that the Labor Commissioner, at the request of an employee who has received less wages than he or she is entitled to, may take assignment of the employee's wage claim and may bring any legal action necessary to collect such claim. In such actions brought by the Labor Commissioner, employer violators may be found liable to the affected employee or employees for the difference in the wages paid and the maximum amount paid any other employee for equal work, compensatory damages, and, if the violation is found to be intentional or committed with reckless indifference to the employee's or employees' rights, punitive damages. Claims for wages are limited to two years after a violation occurred, or three years if the violation is intentional or committed with reckless indifference. Sections 31-75 and 31-76 are amended by Public Act 09-101 (H.B. 6185), L. 2009, effective October 1, 2009.

Connecticut Wage Payment
Law relating to civil penalties for wage violations is amended to extend application of penalties for violations to Chapter 563a of Title 31, relating to employee access to personnel files. Employer violators will be liable to the Labor Department for a civil penalty of $300 for each violation of the chapter. The Attorney General, upon complaint by the Labor Commissioner, has authority to institute civil actions to recover penalties, which may be used by the Labor Department to enforce the law. Equal pay provisions are also amended to clarify exceptions allowing for a pay differential and to prohibit retaliation for filing a wage complaint. The law is further amended to provide that the Labor Commissioner, at the request of an employee who has received less wages than he or she is entitled to, may take assignment of the employee's wage claim and may bring any legal action necessary to collect such claim. In such actions brought by the Labor Commissioner, employer violators may be found liable to the affected employee or employees for the difference in the wages paid and the maximum amount paid any other employee for equal work, compensatory damages, and, if the violation is found to be intentional or committed with reckless indifference to the employee's or employees' rights, punitive damages. Claims for wages for equal pay violations are limited to two years after a violation occurred, or three years if the violation is intentional or committed with reckless indifference. Sections 31-69a, 31-75 and 31-76 are amended by Public Act 09-101 (H.B. 6185), L. 2009, effective October 1, 2009.

Florida Wage Payment
The state wage payment law is amended to include payroll debit cards under requirements applicable to payment instruments. This law provides that a method of payment of wages or salary, including any order, check, draft, note, memorandum, or payroll debit card, must be negotiable and payable in cash, on demand, without discount, at some established place of business in the state and the name of such business must appear on the instrument or in the payroll debit card issuing materials. At time of issuance and for a reasonable time thereafter, which must be at least 30 days, the maker or drawer must have sufficient funds or credit, arrangement, or understanding with the drawee for its payment. Sec. 532.01, as last amended by Ch. 140 (H.B. 569), L. 2009, effective July 1, 2009.

Florida Child Support
Law relating to child support enforcement is amended with regard to medical support orders. The term "health insurance" is defined to mean "coverage under a fee-for-service arrangement, health maintenance organization, or preferred provider organization, and other types of coverage available to either parent, under which medical services could be provided to a dependent child." The law is also amended to establish standards for a presumption of reasonable costs of and accessibility of health insurance; to require that the court make a written finding before deviating from the presumed reasonable cost; to provide a method for calculating a child's health insurance and noncovered medical expenses under certain circumstances; to provide for the enforcement of medical support obligations in child-support-enforcement cases that received services under the Social Security Act; and to conform other provisions to changes made. The phrase "health care coverage" is changed to "health insurance" throughout. Sections 61.046, 61.13, 61.1301, 409.2554 and 409.2576 are amended by Ch. 90 (H.B. 5129), L. 2009, effective May 27, 2009.

Florida Military Leave
Law prohibiting private and public employers from penalizing members of the Florida National Guard because of absence for state active duty is revised to apply the law to employees who are members of the National Guard ordered into state active duty. This law is also amended to require National Guard members to notify employers of intent to return to work; to provide exceptions; to provide for entitlement to seniority and other rights and benefits for National Guard members returning to work following state active duty; to provide that such members may not be discharged from employment except for cause; to provide rights and requirements with respect to use of vacation and leave by such members; and to remove a limitation that an employee had to be employed for at least one year before being ordered into state active service before he or she could bring a civil action against an employer for a violation. Section 250.481 is amended by Ch. 122 (H.B. 635), L. 2009, effective July 1, 2009.

Illinois Minimum Wage
Reminder: The state minimum increased to $8.00 per hour effective July 1, 2009, as part of a scheduled increase. 820 ILCS 105/4.

Kentucky Minimum Wage
Reminder: The minimum wage rate in Kentucky increased to $7.25 per hour on July 1, 2009, as part of a scheduled increase. Sec. 337.275.

Mississippi Child Support
Law relating to child support enforcement is amended to require withholding orders for child support to be payable through the Department of Human Services and to allow the Department to collect lump-sum payments made by an employer to an employee who owes a child support arrearage. Employers served with an order for income withholding, including a provision for payment of arrears, must notify the Department of Human Services before making any lump-sum payments of over $500 are made. In addition, the definition of employer is amended to mean a person who has control of payment of income to an individual and to the definition of "lump-sum payment" is added. Sections 93-11-101 and 93-11-103 are amended by S.B. 2588, L. 2009, effective June 30, 2009. Note that the changes to these sections by S.B. 2588, L. 2009, are effective until July 1, 2010.

Nevada Minimum Wage
Reminder: The minimum hourly wage in Nevada increased to $6.55 per hour July 1 for employees of employers who offer qualifying health benefits or $7.55 per hour for all other employees. State minimum wage rates are adjusted annually based on changes in the cost of living, pursuant to Section 16 of Article 15 of the Constitution of Nevada.

Nevada Maximum Hours and Overtime
Nevada law provides for payment of overtime at the rate of one and one-half times the employee's regular rate when the employee works over 40 hours in a scheduled week of work or over eight hours in a workday (unless by mutual agreement the employee works a scheduled 10 hours a day for four calendar days within a scheduled week of work). Exemptions from this requirement include salesmen earning commissions in a retail business if their regular rate is more than one and one-half times the state minimum wage and more than one-half of their compensation comes from commissions. This exemption from overtime is amended, effective July 1, 2009, to apply to employees in a retail or service business if their regular rate is more than one and one-half times the minimum wage, and more than half their compensation for a representative period comes from commissions on goods or services, with the representative period being, to the extent allowed pursuant to federal law, not less than one month. Section 608.018, as amended by Ch. 445 (A.B. 84), L. 2009, effective July 1, 2009.

Oklahoma Wage Payment
Rules of the Oklahoma Department of Labor rules relating payroll deductions and wage claim procedures are amended. A rule relating to payroll deductions is amended to provide that any voluntary payroll deduction agreement made must be in writing and must be signed by the employee before any deduction authorized under the agreement is taken. Also amended is a rule relating to procedures for wage claims, to provide that unless good cause is shown, motions and briefs are to be filed at least 30 days prior to hearing of a claim; must be served upon the opposing party, counsel, and the Department of Labor in a timely manner; and must not exceed 25 pages in length, exclusive of exhibits and attachments; Any response to a motion or brief must be filed within 15 days after that, unless good cause is shown. Any motion for a stay of proceedings must be filed within 20 days after a wage claim is filed. Oklahoma Administrative Code 380:30-1-7, 380:30-3-4, and 380:30-3-5, as amended effective July 1, 2009. OAR Docket No. 09-1067. Filed May 26, 2009.

Oregon Child Labor
Oregon's child labor law is amended to increase the hours of the day during which a child under the age of 16 may be employed and to provide for additional hours of work during summer. A child under the age of 16 can not be employed for more than 10 hours per day or more than six days in one week. Effective January 1, 2010, the Commissioner of the Bureau of Labor and Industries has authority to issue special permits for employment of children under 16 years of age in agriculture for longer than 10 hours in one day when the Commissioner determines such hours will not be detrimental to the health and safety of the children so employed. Currently, a child under the age of 16 can not be employed before 7 a.m. or after 6 p.m., except in agriculture, youth camps, as a newspaper vendor or carrier, by special permit, or in or about a private residence at domestic work, chores and child care (but not in places where child care or training is carried on as an occupation). This part is amended effective January 1, 2010, to provide that a minor under the age of 16 may not be employed before 7 a.m. or after 7 p.m., except that during the period between June 1 and Labor Day a child under the age of 16 may be employed until 9 p.m. Exceptions for agriculture, youth camps, as a newspaper vendor or carrier, or for domestic work, chores and child care in the home remain the same but the provision allowing for employment by special permit is removed effective January 1, 2010. Section 653.315, as last amended by Ch. 104 (H.B. 2826), L. 2009, effective January 1, 2010.

Oregon Wage Payment
Law relating to writs of garnishment is amended to increase processing fees from $1 to $2, effective January 1, 2010. Sections 18.736 and 18.838 are amended by H.B. 3474, L. 2009, effective January 1, 2010.

Oregon Wage Payment
Law relating to exemptions from garnishment is amended to provide that funds deposited into a financial institution that are exempt under federal law remain exempt in the account as long as the exempt funds are readily identifiable. Certain payments deposited into a bank account by means of direct deposit or electronic payment that are not garnishable include payments from a public or private retirement plan; payments from the Social Security Administration; public assistance payments from the state or a state agency; unemployment compensation payments from the state or a state agency; black lung benefits payments from the United States Department of Labor; veterans benefits payments from the Veterans Benefits Administration; and workers' compensation payments from a workers' compensation carrier. Sections 18-348, 18-618, 18-665, 18-685, 18-835, 18.838 and 18.845 are amended by S.B. 731, L. 2009, effective January 1, 2009.

Oregon Wage Payment
Oregon law provides that the Bureau of Labor and Industries may deduct and retain money collected on wage claims such as costs, attorney's fees, and commissioner's penalties. This law is amended to provide that the commissioner may charge a claimant or respondent on a wage claim for which the commissioner has obtained a judgment the actual collection fees charged to the Bureau by any other governmental agency assisting in the collection of the judgment. Section 652.390, as last amended by Ch. 162 (S.B. 60), L. 2009, effective January 1, 2009.

Oregon Whistleblower Protection
New law is enacted effective January 1, 2010, that will make it an unlawful employment practice for an employer to discharge, demote, suspend or discriminate in any manner or to retaliate against an employee with regard to promotion, compensation or other terms, conditions or privileges of employment because the employee has in good faith reported information that the employee believes is evidence of a violation of a state or federal law, rule or regulation. New law, added by H.B. 3162, L. 2009, effective January 1, 2010. To be added to and made a part of Oregon Revised Statutes Chapter 659A.

Oregon Military Leave
New law is enacted effective June 25, 2009, to provide that during a period of military conflict, an employee who is a spouse of a member of the Armed Forces of the United States, the National Guard or the military reserve forces of the United States who has been notified of an impending call or order to active duty or who has been deployed is entitled to take an unpaid leave of absence of up to 14 days per deployment after the military spouse has been notified of an impending call or order to active duty and before deployment and when the military spouse is on leave from deployment. Employees must give employers notice of intent to take such leave within five business days of receiving official notice of an impending call or order to active duty or of a leave from deployment. New law, to be added to and made a part of Oregon Revised Statutes Chapter 659A. This law, cited at the Military Family Leave Act, is added by H.B. 2744, L. 2009, effective June 25, 2009.

Oregon Labor Relations
Employers and their agents, representatives and designees may not discharge, discipline or otherwise penalize or threaten to discharge, discipline or otherwise penalize or take an adverse employment action against an employee: (a) Who declines to attend or participate in an employer-sponsored meeting or communication if the primary purpose of the meeting or communication is to communicate the opinion of the employer about religious or political matters; (b) as a means of requiring an employee to attend a meeting or participate in communications described in paragraph (a) of this subsection; or (c) because the employee, or a person acting on behalf of the employee, makes a good faith report, orally or in writing, of a violation or a suspected violation of this section. This paragraph does not apply if the employee knows that the report is false. Exceptions apply. Employers must post a notice of employee rights in an area that is commonly frequented by employees and that is normally reserved for employment-related notices. New law, added by S.B. 519, L. 2009, enacted June 30, 2009, and effective January 1, 2010. Not yet codified.

Oregon Labor Relations
Oregon law specifies procedures for filing a complaint of unlawful employment practices through the Commissioner or the Bureau of Labor and Industries. This law provides that, after a hearing, the Commissioner is to issue an appropriate cease and desist order against any respondent found to have engaged in any unlawful practice alleged in the complaint. This provision is amended to provide that the Commissioner may charge a respondent on a cease and desist order the actual collection fees charged to the bureau by any other governmental agency or any private collection agency assisting in the collection of the judgment. Section 659A.850 is amended by Ch. 162 (S.B. 60), L. 2009, effective January 1, 2010. OR ¶38-63,092.

Texas Maximum Hours and Overtime
Law prohibiting mandatory overtime for nurses is enacted. Under this law, a hospital can not require a registered or vocational nurse to work mandatory overtime, and a nurse may refuse to work mandatory overtime, except in certain specified situations. Nurses may voluntarily work overtime. A hospital can not use on-call time as a substitute for mandatory overtime. Exceptions include a health care disaster; a declared federal, state or county emergency; an emergency or unforeseen event that does not regularly occur, increases the need for health care personnel at the hospital to provide safe patient care, and could not prudently be anticipated by the hospital; or the nurse is actively engaged in an ongoing medical or surgical procedure and the continued presence of the nurse through the completion of the procedure is necessary to ensure the health and safety of the patient. Hospitals, in determining an exception exists, must, to the extent possible, make a good faith effort to meet staffing needs through voluntary overtime, including calling per diems and agency nurses, assigning floats, or requesting an additional day of work from off-work employees. Employers are prohibited from suspending, terminating, or otherwise disciplining or discriminating against a nurse who refuses to work mandatory overtime. Texas Health and Safety Code, Sections 258.001 through 258.005, added by S.B. 476, L. 2009, effective September 1, 2009.

Texas Wage Payment
Texas law provides that a claim for wages must be filed no later than the 180th day after the date the wages claimed became due for payment. This law is amended to provide that the 180 day deadline is a matter of jurisdiction. If a wage claim is filed after the deadline, the examiner is to dismiss the wage claim for lack of jurisdiction. Texas Labor Code, Sections 61.051 and 61.052 are amended by Ch. 21 (S.B. 741), L. 2009, effective September 1, 2009.

Texas Wage Payment
Law relating to wage claims is amended to provide that a claim for wages must be filed in a manner and on a form prescribed by the labor commission and must be verified by the employee. The methods in which an employee may file a claim is expanded to include by faxing the claim or my any other method adopted by the commission by rule, in addition to existing methods of filing, in person or by mail. Texas Labor Code, Section 61.051 is amended Ch. 97 (H.B. 762), Laws 2009, effective September 1, 2009.

Virginia Garnishment Regulations
Regulations of the Virginia Department of Labor and Industry setting the method to calculate the maximum amount of disposable earnings that may be subject to garnishment are amended to reflect the impact of the scheduled increase in the federal minimum wage rate to $7.25 per hour on July 24, 2009. For calculation of maximum garnishment amounts for ordinary debt on weekly earnings, nothing may be withheld for garnishment if the weekly disposable earnings are 40 times the federal minimum wage rate or less. If weekly disposable earnings exceed 40 times the federal minimum wage rate, the maximum amount that may be withheld for garnishment is either 25 percent of the weekly disposable earnings or the amount by which the weekly disposable earnings exceed 40 times the federal minimum wage rate, whichever is less, so long as the amount withheld does not reduce the weekly disposable earnings less than 40 times the federal minimum wage rate. Based on the federal minimum wage rate of $7.25 per hour, 40 times the federal minimum wage rate is $290. Therefore, effective July 24, 2009, if the weekly disposable earnings are less than or equal to $290, nothing may be withheld for garnishment. 16 VAC 15-21-30, amended effective July 24, 2009. Filed May 18, 2009. Virginia Register Doc. No. R09-1971.