October 2011
The NLRB announced October 5th that it has postponed the implementation date for its new notice-posting rule by more than two months, until January 31, 2012. The delay is intended to allow for enhanced education and outreach to employers, specifically small and medium-sized businesses.
The Board acknowledged that “queries from businesses and trade organizations indicating uncertainty about which businesses fall under the Board’s jurisdiction” motivated the delay in implementation. However, the Board also said that it will not make any changes in the rule or in the form or content of the notice. The rule requires employers to post a notice of their employees’ right to unionize. Failure to comply would constitute an unfair labor practice.
The rule has been bitterly opposed by numerous groups, including the National Association of Manufacturers and the National Right to Work Foundation. Those organizations filed suit challenging the rule in federal court and the NRWF filed a preliminary injunction to block implementation. The postponement renders that injunctive request moot, as the court will hear oral arguments, on December 19, on the parties’ respective motions for summary judgment.
OLMS publishes final rule on union official disclosures
The DOL’s Office of Labor-Management Standards (OLMS) has published a final rule in the October 26 edition of Federal Register altering the disclosure requirements for union officials regarding conflicts of interest. The final rule alters OLMS Form LM-30.
Under the new rule, union officials must only disclose payments and interests that involve actual or likely conflicts between the official’s union duties and personal financial interests. Such conflicts include payments, interests, and transactions involving the employers of either current or potential union members, vendors, and service providers to those employers, the official’s union or the union’s trust, and any other employers from which a payment could create a conflict.
The final rule contains provisions intended to assist union officials and the DOL has said that it will engage in compliance assistance and enforcement efforts to ensure proper reporting by union officials. The new rule removes requirements that officials report transactions that either do not, or are unlikely to, create actual or likely conflicts of interest. Under the new rule, union shop stewards, in general, do not have to file the form and officials do not need to report union leave of payments to non-employee union officials for work done on employer time. In addition, officials do not need to report “bona fide” financial transactions with credit institutions, including loans or payments from competitor employers, unless those payments present an actual, or likely, conflict.
The rule, which takes effect on November 25, 2011, stems from complaints about the complexity and length of the former rule, published in 2007. The new rule is seven pages shorter than the previous, nine-page iteration. Changes made to the form reporting requirements will apply to reports required by union officials with fiscal years beginning on or after January 1, 2012. For fiscal years beginning before that date, OLMS will accept the Revised (2011) Form LM-30, the 2007 Form LM-30, or the Pre-2007 Form LM-30. Accordingly, for fiscal years beginning before January 1, 2012, OLMS will refrain from initiating enforcement actions against union officers and union employees due to failure to file the report required by section 202, based solely on the use of a particular form, as long as individuals meet their statutorily-required filing obligation in some manner.
Following a hearing on Wednesday, October 25, the U.S. House Committee on Education and the Workforce formally approved the Workforce Democracy and Fairness Act (H.R. 3094), a bill intended to blunt the impact of recent decisions and rulemaking by the NLRB. The measure passed the committee on a party-line vote of 23 to 16, with the Committee’s Republican members shepherding through a bill sponsored by the Committee Chairman, Jon Kline (R-Minn.).
Kline said that the legislation was needed to prevent uncertainty in the markets.
“By crippling important rights employees and employers have enjoyed for decades, the Obama board is creating uncertainty and undermining an employer’s ability to hire new workers. I am pleased the Education and the Workforce Committee today took a concrete step toward putting a stop to the board’s destructive agenda.”
The bill is intended to thwart the impact of the Board’s recent Specialty Healthcare decision. Under the bill, in deciding the appropriateness of a proposed ruling the Board would have to consider the similarity of wages and other terms and conditions of employment of the employees in the proposed unit, the similarity of their skills and training, whether a central management and supervisory structure exists for all employees, the extent of interaction among the employees, the integration of the employees’ work flow, the consistency of the unit with the employer’s organizational structure, the bargaining history of the unit and industry, and the similarity of job functions. It would also bar “fragmentation of bargaining units” – a frequent criticism of the Specialty Healthcare decision – unless the interests of the proposed unit are sufficiently separate from other employees.
In addition, the bill would block the Board’s recent proposed rule that would change its election procedures. Under the law, the Board would be required to hold a hearing into any pre-election disputes no more than 14 days after the employer has received the representation petition. The law would also require employers, within seven days of a final Board determination of the appropriate makeup of a proposed unit, to submit a list of all eligible employees. That list would also provide employee names and one additional form of contact information to be chosen by the employee.
Democrats on the committee criticized the passage of the bill, calling it the “Election Prevention Act” and saying it will do nothing to create jobs, focusing on the unanimous decision by the Republican majority to table an amendment that would have provided $25 billion to modernize at least 35,000 public K-12 schools, giving jobs to “hundreds of thousands of workers.”
“This bill will not provide help to the millions of Americans struggling with stubbornly high unemployment,” said Rep. George Miller (D-CA), the senior Democrat on the committee. “That’s why it’s so frustrating that this committee is continuing to focus on attacking workers’ fundamental rights instead of on solving the jobs crisis.”
At a hearing into the Workforce Democracy and Fairness Act (HR 3094), the House Committee on Education and the Workforce engaged in a spirited debate over the bill, which would undo or block recent decisions and proposed rulemaking by the NLRB. Supporters of the bill tended to focus more on what they perceive to be overreaching by the current NLRB, while opponents of the bill highlighted its potential consequences, which include mandated Board review of every election petition.
Chairman Jon Kline opened the hearing saying that the NLRB “is wreaking havoc on the nation’s workforce and it must be stopped.” Kline pointed to the board’s “ambush elections proposal,” which would require a hearing on election petitions within seven days of a filing. He argued that the proposal would give employees as little as 10 days to consider all the consequences of joining a union and suggested that, when combined with the Board’s recent Specialty Healthcare decision, the proposal is intended to promote unionization. Kline did say that he was open to ideas that would modernize the election process, but said that ideas as far-reaching as the Board’s should be argued and decided by Congress. Such a debate, Kline said, is the purpose of the Workforce Democracy and Fairness Act, which would give employers at least 14 days to prepare for the election hearing.
Charles Cohen, a former member of the board appointed by President Clinton, testified that the legislation is necessary in order to “restrict this NLRB – or any future NLRB – from attempting to violate the mandates of the NLRA and circumvent Congress with regard to election procedures.”
Various issues were debated during the course of the hearing. The panelists and Committee members discussed whether the new bill would protect, or hinder, employees’ exercise of their right to vote. Phillip Russell, an attorney and expert on combating unionization campaigns, argued that the WDFA would “protect the rights of all employees in a workplace to vote on unionization and the right to information from all sides before being forced to vote.” Cohen said that the law will guarantee the privacy of employees because it gives employees the choice of how they shall be contacted by a union. Under questioning by Democratic lawmakers, Cohen acknowledged that the WDFA would require the Board to review any election petition that came before it, a process that could greatly delay representation elections. Cohen also said that if the Board drops its election reform proposal and rescinds Specialty Healthcare, he would see no need for the passage of the WDFA.
Witnesses also discussed whether the WDFA will protect employers. Many of the witnesses focused on the bill’s eradication of the requirement that the Board’s election proposal would impose on employers to present their case to the Board within seven days of the filing of an election petition. Cohen said that most employers, especially small employers, simply lack the time, resources, and knowledge to prepare to defend against a unionization campaign within seven days. Robert Sullivan, a spokesman for the Retail Industry Leaders Association seconded that concern, saying that businesses need, at minimum, ten days in which to respond.
Most witnesses also defended the WDFA’s overturning of the Specialty Healthcare decision. Russell contended that the WDFA “would prevent fragmented workforces in which management would be forced to negotiate multiple contracts with multiple groups of employees.” Sullivan said that Specialty Healthcare opened the door to a scenario in which employees could no longer move among jobs at a company and limits the opportunity for employees to train for a number of roles. Russell added that the decision could lead to an explosion of employer voluntary recognition of unions, because employers would rather give in than fight a host of election petitions.
Although most of the witnesses supported the WDFA, Phillip Hunter, an attorney representing unions, argued that the Board’s recent actions and decisions are necessary to level the playing field. Employers, Hunter contended during the hearing, have “unfettered access to employees from the employees’ first day on the job.” The Board’s election proposal, insisted Hunter, puts the employer and union on more equal footing in terms of the opportunities available to each side for persuasion. Hunter also sought to alleviate concerns that the Board’s election proposal would result in lawsuits by employees against employers for giving their information to unions. Employers who are simply following the law in handing over employees’ contact information, averred Hunter, would not be liable for privacy lawsuits.
Following the hearing, the Associated Builders and Contractors (ABC) released a statement attacking “the NLRB’s ‘ambush’ elections proposal” which it says “would significantly impede the ability of construction industry employers to protect their free speech rights” and “hinders the free choice of workers to make a fully informed decision in a union election campaign.”
Legislation introduced in the US House of Representatives would seek to either block, or undo, several recent rules and decisions handed down by the National Labor Relations Board. Introduced by House Committee on Education and the Workforce Chairman John Kline (R-Minn.), the Workforce Democracy and Fairness Act (HR 3094) is intended to thwart what Kline refers to as the NLRB’s “activist agenda that empowers unions to manipulate the workforce for their own gain while restricting an employer’s right to communicate with their employees and crippling an employee’s ability to make a fully informed decision.”
The Workforce Democracy and Fairness Act takes direct aim at the Board’s recent Specialty Healthcare decision, in which the Board altered its approach to determining the appropriateness of proposed bargaining units. Under the bill, the Board would have to consider the similarity of wages and other terms and conditions of employment of the employees in the proposed unit, the similarity of their skills and training, whether a central management and supervisory structure exists for all employees, the extent of interaction among the employees, the integration of the employees’ work flow, the consistency of the unit with the employer’s organizational structure, the bargaining history of the unit and industry, and the similarity of job functions. It would also bar “fragmentation of bargaining units” – a frequent criticism of the Specialty Healthcare decision – unless the interests of the proposed unit are sufficiently separate from other employees.
The measure also targets the Board’s recent proposed rule that would change the Board’s election procedures. Under the law, the Board would be required to hold a hearing into any pre-election disputes no more than 14 days after the employer has received the representation petition. The law would also require employers, within seven days of a final Board determination of the appropriate makeup of a proposed unit, to submit a list of all eligible employees. That list would also provide employee names and one additional form of contact information to be chosen by the employee.
On Wednesday, October 12, the House Committee on Education and the Workforce will hold a legislative hearing on the Workforce Democracy and Fairness Act.
The battle between House Oversight Committee Chairman Representative Darrell Issa and Lafe Solomon, the acting general counsel of the NLRB, has intensified after Issa sent a letter last week to Solomon condemning him for ignoring portions of a subpoena issued by the Committee. In the letter, Issa reminds Solomon that failure to comply is illegal and could result in contempt of Congress Charges.
The subpoenas were issued in relation to the NLRB’s ongoing case against the Boeing Company. Solomon has resisted the subpoena, contending that it would be improper to release documents relating to a pending case. He has also insisted that he has complied with most of the subpoena.
House Education and the Workforce Committee Chairman John Kline (R-MN) and Health, Employment, Labor, and Pensions Subcommittee Chairman Phil Roe (R-TN) have sent a letter to the NLRB demanding that the Board remit documents and information concerning its recent Lamons Gasket decision, which overturned the Dana Corp decision that facilitated decertification elections of unions voluntarily recognized by employers.
In the letter, Kline and Roe note that since the Board’s Dana Corp decision, the Board has received 1,333 requests for voluntary recognition, which resulted in 62 decertification elections. In 25 percent of those elections, employees voted against the union. However, “despite the success of the Dana holding,” wrote Kline and Roe, “the Board … decided to roll back the decision and the protections it provided workers.” The Congressmen expressed concern that workers may now, under Lamons Gasket, have to wait for as many as four years to have a decertification election for a union certified through voluntary recognition.
The Congressmen also expressed concern that the Board has decided to apply its Lamons Gasket decision retroactively in cases where ballots have yet to be counted. Due to these concerns, Kline and Roe demanded that the Board submit a list of cases in which, pursuant to Dana Corp, decertification petitions were filed, along with all relevant case information. They have also asked for a list of cases dismissed pursuant to Lamons Gasket, and, among other things, the ballots that were cast in those cases.
Kline and Roe issued a statement explaining their letter.
“Just because an employer recognizes a union doesn’t mean workers should have to wait years before casting a secret ballot,” said Kline and Roe. “It appears that in at least three cases the NLRB collected ballots following workers’ demand for an election, but dismissed the election due to its August decision. These ballots, cast by employees in the midst of a legitimate election, will never be counted by the NLRB. This is a devastating blow to workers who exercised their rights under the law.”
In a recently released advice memo, Barry J. Kearney, an Assistant General Counsel in the NLRB’s Division of Advice, has recommended dismissing a charge that an employee was unlawfully terminated because the termination resulted from an unprotected posting on the social media site, LinkedIn.
The employee’s supervisor invited him to join his LinkedIn network on the professional networking site. When asked to identity his position on the registration form, the employee, thinking that only his supervisor would see, wrote “fucktard.” In February, 2011, well after the employee joined the site, he engaged in a discussion with fellow employees about whether to file a class action wage/hour suit against their employer, but the employees decided not to proceed and the employer eventually altered its compensation policies to provide overtime pay, not comp time. In April of that year, the employer, as part of research into creating its own LinkedIn site, began looking at LinkedIn profiles of its employees, saw the employee’s position description and fired him for disparaging the company in violation of its Communication Policy.
The employee filed a charge with the NLRB, arguing that the employer terminated him over his involvement in the discussions about the possible wage/hour suit. The employee argued that the temporal proximity between the discussions and his termination suggested a connection. The employee also argued that the LinkedIn profile had been active for over a year before he was fired.
The Assistant G.C., however, found that timing alone does not indicate unlawful motive in terminations; employees must also show that their employer knew of their protected activity. In this case, the Assistant G.C. found, there was no evidence that the employer even knew of the discussions about a possible class action suit. In addition, the employer only learned of the offending profile when it began researching the site. Therefore, the Assistant G.C. found, the termination did not violate the NLRA.
LEADING CASE NEWS
Arizona’s Attorney General and Secretary of State, along with the sheriff of Maricopa County, were denied their motions to dismiss an action brought by various unions challenging the constitutionality of legislation that attempts to regulate picketing activity and dues deductions (United Food and Commercial Workers, Local 99 v Brewer, October 11, 2011, Snow, G). However, Arizona Governor Jan Brewer and the director of Arizona’s Department of Labor were dismissed as defendants after a federal district court determined they did not have a fairly direct relationship to implementation of the law and, thus, they were immune from this lawsuit pursuant to the Eleventh Amendment.
In April 2011, the Arizona legislature passed Senate Bill 1363, a law expanding the definition of “harassment” under Arizona law to include “unlawful picketing, trespassory assembly, unlawful mass assembly, concerted interference with lawful exercise of business activity, and engaging in a secondary boycott.” The law also broadens the definition of “defamation” to include making a false statement about an employer while “knowingly, recklessly, or negligently disregarding the falsity of the statement.” Further, the law makes labor unions liable for the defamatory acts of their members. S.B. 1363 also allows employers to put their place of business on a “no-trespass public notice list” maintained by the Secretary of State; an employer whose premises is on the list may ask law enforcement to remove a union or group of individuals engaged in unlawful picketing, trespassing, or mass assembly or to order the group to leave the property, and an employer would not be required to provide documentation to establish property rights.
The legislature also passed S.B. 1365, the “Protect Arizona Employees’ Paychecks from Politics Act,” requiring organizations that collect funds through payroll deductions to affirm to employers that process those deductions that none of the funds would be used for political purposes or, in the alternative, to specify how much of their funds would be used for such purposes.
According to the unions, the statutes violated the First Amendment; moreover, S.B. 1365 was preempted by the Supremacy Clause. The defendants each filed motions to dismiss the complaint, arguing that the plaintiffs failed to demonstrate that the court has subject matter jurisdiction. The court determined that it had jurisdiction to hear claims challenging a state law on constitutional grounds because federal courts have subject matter jurisdiction over “all civil actions arising under the Constitution, laws, or treaties of the United States.” Additionally, the court determined that the unions satisfied the injury-in-fact requirement necessary for standing by alleging that the two laws restrict their freedom of speech and assembly.
In a previous ruling, the court enjoined enforcement of S.B. 1365 after concluding that the statute, on its face, discriminates according to viewpoint in violation of the First Amendment. Thus, the plaintiffs have standing to continue to challenge a law that facially discriminates against their speech activity. The U.S. Supreme Court, in Dombrowski v Pfister, held that when parties seek to challenge laws that criminalize protected behavior, as the plaintiffs allege with respect to S.B. 1363, they need not “risk prosecution to test their rights.” Consequently, the plaintiffs adequately alleged that they suffered an injury in fact from S.B. 1363 and S.B. 1365.
Additionally, the plaintiffs demonstrated that their claim was fairly traceable to the law, and that their injury would be redressed were their suit successful. Their claim also was constitutionally ripe. The core issues of their complaint were purely legal in nature, alleging that the laws deprived them of their basic First Amendment rights. Dismissing the case on ripeness grounds would cause them to continue to suffer this alleged loss, which the Supreme Court, in Elrod v Burns, has held “unquestionably constitutes irreparable injury.” Consequently, the defendants’ motions to dismiss were granted in part and denied in part.
Andrew Joseph Kahn (Davis Cowell & Bowe LLP) for Plaintiff UFCW. Jennifer Sung (Altshuler Berzon LLP) for Plaintiff SEIU, Local 5. Jason Walta (NEA Office of General Counsel) for Plaintiff Arizona Education Association. Jessica R. Robinson (AFSCME) for Plaintiff AFSCME, Local 449. David J. Strom (American Federation of Teachers) for Plaintiff Arizona Federation of Teachers. James Evans Barton (Office of the Attorney General) for Defendants.
The case number is CV-11-921-PHX-GMS.
The National Labor Relations Board has standing to challenge an amendment to the Arizona state constitution that allegedly makes employers’ voluntary recognition of unions unlawful, a federal district court in Arizona has ruled (NLRB v State of Arizona, October 12, 2011, Martone, F). The court also ruled that it had jurisdiction over the case and granted a motion allowing a third party to intervene permissively.
In 2010, Arizona voters approved an amendment to the state constitution which stated that the right to a secret ballot vote in all elections, including representation elections, was guaranteed. The NLRB filed suit seeking to block the amendment, contending that Article 2 Sec. 37 of the Arizona constitution now requires elections “where federal law does not” and contending that the amendment deprives employees of rights under federal law, namely the right to have their employer voluntarily recognize their selected bargaining representative. The NLRB further claimed that the amendment was preempted because it created a “parallel state enforcement mechanism for protecting … rights that Congress assigned to the NLRB.” The Board asked the court for a declaratory judgment that the amendment was preempted by the NLRA. Arizona moved to dismiss and a group called Save Our Secret Ballot—which drafted the amendment—and 33 state residents moved to intervene.
Standing. The state first argued that the NLRB lacked standing to sue, alleging that it could not establish an injury in fact because the amendment neither regulated, nor interfered with, the NLRB’s actions and because there was no pending state action aimed at enforcing the secret ballot provision. The NLRB responded that it suffered an injury through the amendment’s impeding of the right of employers and employees to create a bargaining relationship through means beyond an election and by impairing the Board’s ability to carry out its mission.
The court noted that Sec. 8(f) of the NLRA allows construction employers to enter into pre-hire agreements with unions and that Sec. 7 guarantees employees the right to bargain through a representative of their choosing. The court further noted that employees have the right, under the NLRA, to choose representatives through either a secret ballot election or though voluntary recognition. The NLRB was created to enforce those rights and uniform application of the NLRA. The court further noted that the US Supreme Court has ruled that the NLRB has exclusive enforcement powers, which forecloses state enforcement of NLRA provisions. However, the amendment allows aggrieved employees to file a state lawsuit, thereby setting up a second enforcement mechanism for the NLRA’s right to a secret ballot election. Thus, the court found that the amendment tasked Arizona courts with enforcing rights under the NLRA. This, ruled the court, curtailed the NLRB’s exclusive authority to protect employees’ Sec. 7 rights and undermined its exclusive authority to administer the NLRA. Therefore, the court found that the Board had standing.
Ripeness. The court also held that the case was ripe for adjudication. The state argued that because there was no current threat of prosecution under the amendment, the issue was not yet ripe. The Board argued that the creation of a parallel enforcement mechanism rendered the case ripe. The court found that the challenged action—namely, the passage of the amendment—had already occurred and was final, as it had been added to the constitution. Thus, the court found that the preemption issue was fit for review. Furthermore, in light of the NLRB’s role in administering the NLRA, the court found that if the amendment impaired that role in any way, the Board would suffer direct and immediate hardship. Thus, the court found that the issue was ripe for review.
Jurisdiction. The court also held that it had jurisdiction over the matter. The state argued that because the Board sought a declaratory judgment, jurisdiction did not exist, as the case did not arise under the NLRA. The court found that although the NLRA does not explicitly authorize the Board to seek declaratory relief, the Supreme Court has ruled that the Board may obtain “appropriate and traditional” remedies to prevent “frustration” of the NLRA’s purposes. Therefore, the court found that the NLRB had the right to pursue declaratory relief and that the court, thus, had jurisdiction. The court then declined to exercise its discretion to decline jurisdiction, finding that litigating the preemption argument would resolve the controversy in one blow and would clarify the legal question. Therefore, the court denied the motion to dismiss.
Motion to intervene. The court then addressed the motion to intervene as of a right. The Save Our Secret Ballot group contended that the state could not adequately represent its interests because, as the drafters of the amendment, the group had “specialized knowledge” of legal and factual issues. The court ruled that such knowledge alone would not compel a finding that the state could not represent SOSB’s interests. The court further found no evidence to suggest that Arizona would not continue to defend the amendment. SOSB also argued that its interests were broader than those of the state. The court, however, found that even if that contention were true, the Board was asserting preemption under “a very broad interpretation of the amendment,” one that would involve the SOSB’s broader interpretation of the amendment. Thus, the court denied the motion to intervene as of right.
It did, however, grant the motion to intervene permissively. Under the Federal Rules of Civil Procedure, courts are allowed to permit movants who share common legal or factual questions with the main action to intervene, so long as the intervention would not cause prejudice or undue delay. The Board did not oppose the motion, so long as it was limited to new arguments and the court, thus, granted the motion.
The case number is 11-00913-PHX-FJM
Abby Propis Simms (NLRB) for Plaintiff. Christopher Arthur Munns (Office of the Attorney General) for Defendant.
Employees of the United States Postal Service (USPS) had a privacy interest in their personal aptitude scores and, therefore, the NLRB was required to balance those privacy interests and a union’s interests in the scores, ruled the First Circuit in vacating and remanding the Board’s order finding that the USPS’ refusal to provide the scores violated the NLRA (NLRB v USPS, October 27, 2011, Lynch, S).
Background. The USPS required all applicants to take a psychological aptitude test and Test 473 was designed to measure an applicant’s cognitive skills and general mental ability, personal characteristics relating to “conscientiousness, interpersonal skills, professional service orientation, self-management,” and the applicant’s ability to deal with “work pressures and demands.” After calculating all relevant factors, including the test results, the USPS would place the applicant’s name and all relevant data into a hiring register.
In 2007, the USPS posted a hiring notice for mail handler positions, and 8,000 applicants passed Test 473 and were placed in the hiring register. The union represented employees in the region where the new employees would be placed. The governing CBA required the USPS to compute seniority rankings of the new employees, and after several veteran employees complained about the rankings assigned to the new employees, the union asked to see scores for the 22 new employees. The USPS refused, arguing that the Privacy Act required it to maintain the confidentiality of employee records absent permission from the employees to provide that information. The NLRB found that the refusal violated the Act and moved for enforcement of its order. The Board found that no privacy interests were at stake and, therefore, it did not have to balance the union’s interest in the scores and the employees’ privacy interests.
Disclosure notice. The First Circuit disagreed. It noted that under the Privacy Act, federal employers are required not to disclose personal information without prior permission, but that federal agencies can modulate that rule by establishing policies for the disclosure of the information for purposes “compatible with the purpose for which it was collected.” The court noted that the USPS had 11 routine uses under which it would disclose information. One of those uses was disclosure to the union for collective bargaining purposes.
The U.S. Supreme Court, in Detroit Edison Co v NLRB, held that the NLRA does not require unconditional disclosure of psychological aptitude test scores. The Board argued that Detroit Edison did not apply because the employer in that case made an express promise of confidentiality to its employees, whereas the USPS told its applicants that it could have to divulge personal information to the union. The court noted that although the USPS did not contest the relevancy of the requested information, it was not automatically required to provide the information. The court found that the USPS makes a Guide to Privacy publicly available and that it provides two notices of rights to all applicants informing them that the Privacy Act applied to any personal information that they chose to divulge, but that personal information could be divulged as required by the NLRA.
However, the reference to the Privacy Act reaffirmed that the applicants’ privacy would be protected. The court further found that the notices also referenced the USPS’ routine use exception under which it could, if required by the NLRA, disclose personal information to the union. That exception stated, “As required by applicable law, records may be furnished to a labor organization when needed by that organization to perform its duties….” This language explained the general rule, the court found, and that the applicant’s privacy would be protected. It did not, the court held, require automatic disclosure of the information to the union. Thus, ruled the court, “The notices did not wipe out all expectations of privacy.” Therefore, the Board’s refusal to weigh the privacy interests against the union’s interests was in error and the court vacated and remanded the case to the Board to weigh those balances.
The Case Number is 11-1225.
Nicole Lancia (NLRB) for Petitioner. Stephan J. Boardman (USPS) for Respondent.
In a case not designated for publication, the Fourth Circuit ruled that substantial evidence supported enforcement of an NLRB order finding that an employer terminated an employee for engaging in protected concerted activity (NLRB v White Oak Manor, October 28, 2011, Diaz, A). Because the employee joined with other employees to challenge the employer’s uneven enforcement of its dress code, she was engaged in protected concerted activity, so that the employer’s action in discharging her violated the NLRA. Moreover, because of a lack of enforcement of a company rule banning employees from taking photographs of coworkers without their permission, the appeals court rejected the employer’s contention that the employee’s violation of the rule justified her discharge.
Background. The employee worked as a supply clerk at a long term care facility. After receiving a “terrible haircut,” the employee wore a hat to work without incident for several days. That changed when the employer’s personnel director explained that wearing a hat violated the company’s dress code. When the employee was asked to remove the hat she refused. Thereafter, the employee was again advised that the dress code forbade employees to wear hats and that she should go home if she refused to remove her hat. The employee protested that she was being unfairly singled out and that other employees were allowed to wear hats. She declined to remove her hat and left the facility for the day. Subsequently, the employee was issued a written warning for insubordination.
In the days following, the employee paid particular attention to the clothing worn by her coworkers. She noticed coworkers wearing and displaying tattoos, in violation of the dress code. Management failed to address these transgressions. Upset by the disparate enforcement of the dress code, the employee began talking with female coworkers to enlist their support. Additionally, the employee documented the dress-code violations by taking pictures on her cell phone, which was contrary to company policy. These pictures were shared with coworkers, as the employee explained that she had documented disparate enforcement of the dress code. After management was advised of the employee’s activities, the employee was confronted. Thereafter, the employer initiated an investigation of the employee’s activities, and approached one of the subjects of her pictures about filing a complaint. The decision was made to discharge the employee.
Following her termination, the employee submitted a charge to the NLRB. The Board in turn charged that the employer had acted unlawfully by interrogating, threatening, and discharging the employee as a result of her protected activity. An administrative law judge concluded that the employer had violated the NLRA by discharging the employee for her protected concerted activity. Moreover, the ALJ concluded that the employee did not lose the protection of the Act by violating the employer’s rule against taking other employees’ pictures without their permission. The Board affirmed the law judge’s recommendations. Thereafter, the Board filed an application for enforcement of its order.
Collective grievance. The Fourth Circuit disagreed with the employer’s contention that the employee acted solely for her own benefit when she complained about the dress code and documented its uneven enforcement. It was undisputed that the employee was terminated for taking and distributing photographs of a coworker without first obtaining his permission. However, the appeals court concluded that this conduct was part and parcel of her larger grievance over dress-code enforcement, and so constituted protected concerted activity under the NLRA.
The employee’s complaints about the employer’s disparate enforcement of the dress code were protected as the product of concerted action. Here, the employee spoke with approximately 10 coworkers about the uneven enforcement of the dress code. Her coworkers sympathized with her concerns, raised their own independent complaints about dress-code implementation, and expressed hopes for more equitable enforcement. Moreover, at least one coworker assisted the employee with her efforts to document the problem, sharing pictures with another coworker. Because the employee’s conversations were initiated to induce group action, they constituted concerted activity. Although her coworkers did not formally appoint the employee as their spokesperson regarding complaints over the dress-code enforcement, substantial evidence supported the conclusion that the employees determined that they had a collective grievance, which they resolved to take to management.
Picture-taking policy. The Fourth Circuit also disagreed with the employer’s contention that even if the employee had engaged in protected concerted activity, her decision to photograph other employees violated a valid company rule and thereby authorized her termination. While an employee can lose the protection of the NLRA by engaging in egregious conduct, the appeals court concluded that the employer failed to make the requisite threshold showing of egregiousness in this instance. The company’s utter failure to enforce its picture-taking policy militated against a finding that the employee’s conduct removed her from the protections of the NLRA. Here, the employer had never before disciplined an employee for taking pictures of coworkers without first securing their permission. Rather, the employer freely permitted employees to take pictures of each other absent permission, to share those photographs, and even post them on facility bulletin boards. Thus, the employer could find no refuge in the egregiousness safe harbor. Accordingly, the appeals court granted the Board’s application for enforcement.
The case number is 10-2122.
Thomas Howard Keim (Ford & Harrison, LLP) for Respondent. Nicole Lancia (NLRB) for Petitioner.
A federal district court did not abuse its discretion in issuing a preliminary injunction against a hospital’s refusal to recognize and bargain with the union representing nurses of a predecessor employer, after determining that an NLRB regional director established a likelihood of success on the merits, ruled the Ninth Circuit (Small v Avanti Health Sys, LLC, October 31, 2011, Reinhardt, S). Additionally, the appeals court decided that the district court did not abuse its discretion in determining that the regional director had shown a likelihood of irreparable harm because of the employer’s refusal to bargain in good faith.
Background. Just three days after completing the purchase of Community Hospital, Avanti refused to recognize or bargain with the California Nurses Association (CNA), the union that had represented the hospital’s registered nurses under the predecessor employer. After the predecessor employer filed for bankruptcy, it attempted to sell the hospital. While negotiating for the hospital’s purchase, Avanti required that the predecessor reject its CBA with the CNA. It also required the predecessor to reject the contract it had with Service Employees Union that represented janitorial employees. However, the CNA sent Avanti a letter asserting that it would be a successor employer, and would be required to recognize and bargain with it. Nonetheless, a bankruptcy court granted the predecessor’s motion to reject the CBA, and Avanti completed the purchase.
Following Avanti’s declaration that it was fully staffed, it reasoned that it did not employ a majority of employees in the relevant bargaining unit from the previous employer to qualify as a successor employer. It refused to recognize or bargain with the CNA. The regional director disputes Avanti’s calculations and identified 30 Avanti nurses, a nearly 64 percent union incumbency rate, who were part of the predecessor’s bargaining unit. The union filed a charge with the NLRB and the regional director petitioned for a preliminary injunction. The regional director was awarded a preliminary injunction pursuant to Sec. 10(j), and the district court ordered Avanti to affirmatively recognize and bargain in good faith with the CNA. Thereafter, the employer timely appealed.
In a parallel action, an NLRB administrative law judge found that 30 of the 47 nurses employed at the hospital had been employed by the predecessor employer, so that a majority of the nurses in the union were union incumbents. Therefore, the ALJ concluded that Avanti was obligated to recognize and bargain in good faith with the CNA. The ALJ ordered nearly identical relief to that ordered by the district court. Although the ALJ’s decision was not part of the district court’s record, the Ninth Circuit took judicial notice of that opinion.
Substantial complement. In Frankl v HTH Corp, the Ninth Circuit reaffirmed that a regional director in a Sec. 10(j) proceeding “can make a threshold showing of likelihood of success by producing some evidence to support the unfair labor practice charge, together with an arguable legal theory. To evaluate the regional director’s likelihood of success, the appeals court applied the standard set forth by the Supreme Court in Fall River Dyeing & Finishing Corp v NLRB, where the court held that a successor employer has an obligation to bargain with a union if the new employer is in fact a successor of the old employer and the majority of its employees were employed by its predecessor. Here, the parties agreed that Avanti is a successor employer because of the “substantial continuity” in the operations of the hospital under both employers. Therefore, the likelihood of success turned on whether a majority of the nurses employed by Avanti were in the bargaining unit of the predecessor. In this instance, the district court did not err in determining that the director was likely to succeed on the merits because Avanti employed a substantial and representative complement of nurses on March 26, 2010, and a majority of its nurses on that date were union incumbents.
On that date, the nurse positions were substantially filled because Avanti employed a majority of the RNs it eventually planned to employ, operations were in normal or substantially normal production, and there was no “relative certainty” that the employer would hire a substantially larger complement of employees. According to Avanti’s own payroll records, it employed 47 nurses on that date and its chief financial officer declared that he believed the hospital was fully staffed on March 26. The fact that some nurses did not show up for work during the first week of the new ownership did not mean that Avanti had not yet hired a substantial and representative complement of nurses. The court rejected the employer’s suggestion that it adopt a “full complement” test, which would calculate union incumbency only once the successor employer had hired all of the employees eventually to be employed. Thus, the proper date for determining union incumbency was not May 16, when the employer was done with hiring, but March 26, when it had hired a majority of nurses.
Union majority status. Having determined that March 26 was the proper date for determining that Avanti employed a “substantial and representative complement of the relevant bargaining unit, the court next examined whether union incumbents comprised a majority of the bargaining unit. In concluding that 47 nurses were employed on March 26, the district court properly relied on the employer’s first payroll after it commenced operations as the new owner. At this point, the appeals court had to determine whether the majority of those nurses were union incumbents of the predecessor employer. Where the regional director identified incumbents by comparing RNs who were designated as union members with those on Avanti’s payroll, 30 incumbents were identified. Therefore, the district court did not clearly err in finding that union incumbents comprised a majority of the bargaining unit. Accordingly, the district court did not abuse its discretion in concluding that the regional director was likely to succeed on the merits.
Irreparable harm. Further, the Ninth Circuit concluded that the district court did not abuse its discretion in determining that the regional director had shown a likelihood of irreparable harm. Here, the appeals court noted that Avanti’s refusal to bargain in good faith was likely to cause irreparable harm absent an injunction. First, without bargaining, employees are denied the opportunity to achieve the economic benefits that CBA can secure for workers. Second, unions provide a range of non-economic benefits to employees that are not realized when an employer refuses to bargain with the union. Third, a failure to bargain in good faith threatens industrial peace. Finally, a delay in bargaining weakens support for the union, and a NLRB order cannot remedy this diminished level of support.
Additionally, the district court’s determination that the regional director had shown likely irreparable harm to the collective bargaining process meant that there was also considerable weight on his side of the balance of hardships, observed the appeals court. Finally, the district court did not abuse its discretion in finding that the public interest supported the grant of a preliminary injunction. Thus, the district court correctly applied the standards set forth in Winter v Natural Resources Defense Council to determine whether an injunction was warranted, and did not abuse its discretion in granting the preliminary injunction.
The case number is 11-55563.
Cecelia Felice Valentine (NLRB, Region 21) for Petitioner-Appellee. Paul Berkowitz (Sheppard Mullin Richter & Hampton LLP) for Respondents-Appellants.
A Michigan HVAC contractor violated Sec. 8(a)(1) of the NLRA by filing a lawsuit against several unions for allegedly interfering with its right to seek job targeting funds from one of the unions, a divided NLRB panel ruled (Allied Mechanical Serv, Inc, October 25, 2011). No “reasonable litigant” could expect that it would succeed on the merits of its claims that the unions engaged in an unlawful secondary boycott or breached a “most favored nations” clause in a bargaining agreement. Moreover, substantial evidence supported a finding that the lawsuit was filed for retaliatory purposes, the Board majority held.
Background. The contractor was a party to a multiemployer bargaining agreement with the Local 7 of the Sheet Metal Workers’ union. The employer also had a relationship with Local 357 of the Plumber’s and Pipefitters’ union, albeit a “tumultuous” one. The employer had reluctantly recognized the union in 1991 in order to settle an unfair labor practice complaint. However, contract negotiations never resulted in a bargaining agreement and after a period fraught with unfair labor practice allegations, the contractor withdrew recognition in 1998. That same year, the sheet metal workers’ union refused to grant the contractor job targeting funds relating to three projects. (Job targeting funds are collected by the union from members while they are working, and which the unions in turn provide to contractors that are parties to bargaining agreements with the unions. The funds are awarded to contractors to enable them to make more competitive bids for specific jobs in order to expand union members’ job opportunities.) After being denied job targeting funds, the contractor filed the lawsuit at issue here, naming the Sheet Metal Workers’ local and the plumber’s union local, along with their respective international unions.
The contractor asserted that plumbers’ Local 357 violated the NLRA’s secondary boycott provisions and had restrained employees in the exercise of their Sec. 7 rights by prohibiting Local 7 from providing job targeting funds to the contractor. The denial of job targeting funds induced or encouraged sheet metal, plumbing, and pipefitting employees to withhold their services and not do business with the contractor, it contended. The suit also challenged a National Joint Adjustment Board’s denial of a grievance filed against the Sheet Metal Workers for allegedly violating the “most favored nations” clause in their bargaining agreement by refusing to grant the funds while providing such funds to other union contractors related to the same job. According to the contractor’s part-owner, Local 7 reps told him that the absence of a CBA with the plumbers’ union was the reason that Local 7 refused to provide the funds to the contractor.
The district court granted the unions’ motions to dismiss the Sec. 8(b)(4) claim, finding the complaint failed to allege that the unions directed any secondary boycott activity toward neutral employers or customers, given that the contractor was not a secondary employer. Moreover, because the most favored nations clause made no mention of job targeting funds — nor did any other contractual provision in their CBA—the NJAB’s decision did not, as a matter of law, fail to derive its essence from the relevant contract. The Sixth Circuit affirmed.
NLRA violation. An NLRB administrative law judge found the contractor’s lawsuit against the unions violated the NLRA. In so ruling, the law judge reasoned that the courts’ dismissal of the lawsuit established that it was without merit. In a supplemental decision issued after the 2002 Supreme Court decision in BE&K Construction Co v NLRB, the ALJ acknowledged that under the High Court’s ruling, the mere dismissal of the lawsuit was not enough to establish that it was not reasonably based. However, reexamining the record in light of this decision, the law judge once again found that the lawsuit lacked a reasonable basis. She also reiterated her finding that the contractor filed and maintained the suit “out of a desire to retaliate against the unions for engaging in protected concerted activity.”
The Board majority agreed. Although the court rulings dismissing the contractor’s case (and affirming that dismissal) did not necessarily establish that the lawsuit lacked a reasonable basis, “the rationale set forth by those courts appropriately bears on that question and militates in favor of such a finding,” the majority noted. Nonetheless, undertaking its own independent analysis of whether the lawsuit lacked a reasonable basis, the majority found the contractor failed to plead facts that might “even arguably” establish a violation of Sec. 8(b)(4). Thus, independent of the courts’ rulings, the Board found the lawsuit was not reasonably based.
In further agreement with the law judge, the majority found the contractor filed its suit for a retaliatory motive. Citing the employer’s contentious relationship with the plumbers’ union, the sequential unfair labor practices — serious enough to warrant a Gissel bargaining order — coupled with a statement from the company’s part-owner that he would “get even with” the union, the contractor’s animus against the plumbers’ union was quite clear. And by association, the contractor displayed animus toward the Sheet Metal Workers, which had refused to grant the job targeting funds. Moreover, the Board found, the lawsuit was retaliatory on its face: it sought monetary damages from the union based on statutorily protected conduct — operating a job targeting program — and “acting in concert to induce the Respondent via lawful pressure to reach an agreement with Local 357.” The suit also specifically alleged that the plumbers’ union had filed numerous unfair labor practice charges and engaged in mini-strikes — both activities that are generally protected by the Act.
Finally, the majority found further evidence of an improper motive in the judicial decisions that the lawsuit was obviously lacking in merit. While baselessness alone is not enough to demonstrate retaliatory motive, as Member Hayes noted in dissent, “filing a baseless action nevertheless suggests such a motive, and we will continue to consider it one factor in our analysis,” the majority wrote.
Dissent. Member Hayes would not find that the contractor had an unlawful retaliatory motive in filing suit against the unions in this case. Accordingly, he rejected the majority’s finding that the contractor violated the Act, concluding that the Board lacked authority “to impose liability on the Respondent for invoking its First Amendment right to petition the courts for redress.” He asserted that the reasoning of Chairman Pearce and Member Becker, in their majority ruling to the contrary, “makes plain their intent to render meaningless this second prong of the Board’s BE&K analysis.”
The case numbers are 7–CA–41687, 7–CA–41783, and 7–CA–41993.
Tinamarie Pappas (Law Offices of Tinamarie Pappas) for Charging Party Local Unions. Nicholas Femia (O'Donoghue & O'Donoghue LLP) for Charging Party International Union. David M. Buday (Miller Johnson) for Respondent.
A delegation of hotel employees who presented an executive with a petition protesting an impending reduction in available working hours were engaged in concerted, protected activity, but several of those employees lost the protection of the Act by attempting to physically restrain the executive from leaving during the incident, ruled the NLRB, in a 2-1 decision (LaGuardia Assocs, LLP dba Crowne Plaza LaGuardia, September 30, 2011). The divided Board ruled that members of the employee group, who did not make physical contact with the executive, did not lose the Act’s protection, however, and therefore, the hotel had violated the Act in disciplining those workers.
Background. A union representing hotel employees periodically deployed delegations of bargaining unit members to present grievances to managers over work conditions, part of the union’s standard operating procedure in its effort to pressure the hotel into moving forward with contract negotiations. One such delegation was sent to protest a reduction in work hours; the union had requested, instead, that the hotel lay off workers in inverse order of seniority. After a union rally, 13 to 15 housekeepers went to the office of the hotel’s chief operating officer to deliver a petition demanding that any layoffs proceed according to seniority. The executive was not there, but the employees found him in the hotel parking garage, where they engaged in a 38-second altercation that was recorded on the parking lot video footage.
When encountered by the group of employees, the executive stated he would talk to only one employee in his office. He began to leave, walking through the housekeepers, at which point the lead protester grabbed him to prevent him from leaving and touched him at least three times. Another employee pushed her chest against him to physically block him from leaving, stepping side to side in front of him. Yet another employee grabbed the executive’s elbow and put her arm around him to keep him from leaving. A few other housekeepers engaged in similar touching, but other protestors made no physical contact with the executive. After the incident, four employees were discharged, five employees were suspended for three days without pay, and four employees were issued written warnings. Management determined the appropriate discipline to levy against each individual employee after assessing their actions during the incident, among other factors.
An administrative law judge found that the hotel did not violate Sec. 8(a)(1) of the Act by disciplining the employees. Although the ALJ found that the employees were initially engaged in protected activity, he found that they lost that protection in the circumstances here, which included several employees deliberately touching and physically restraining the manager. The Board majority affirmed the judge’s finding as to three employees who made deliberate physical contact with the executive, but reversed as to the remaining employees. Because the remaining employees did not lose the Act’s protection, the employer had violated the Act by disciplining them for engaging in protected conduct.
Partial dissent. Member Hayes dissented, in part. He would have found that the entire delegation of employees lost protection of the Act under the four-factor Atlantic Steel Co test. “The laws of physics being what they are, not all of these employees could be so close to [the manager] as to deliberately touch him, but all contributed by voice and presence to his detention and/or a state of general disorder incompatible with a hotel lobby environment. As a result, I would find that the Respondent lawfully disciplined them in varying degrees for this misconduct.”
The case number is 357 NLRB No 95.
Michael Berger (NLRB) for General Counsel. Andrew S. Hoffmann (Wiseman & Hoffman) for Respondent.
WAGES HOURS – FMLA
The U.S. Office of Personnel Management has issued final regulations amending FMLA regulations to provide eligible Federal employees up to 12 administrative workweeks of unpaid leave under the FMLA for qualifying exigency purposes. Qualifying exigencies arise when the spouse, son, daughter, or parent of an employee either is on covered active duty in the Armed Forces, or has been notified of an impending call or order to covered active duty status. These regulations are intended to assist employees to manage family affairs when their family members are on covered active duty. The rule will become effective October 31, 2011.
The OPM issued final regulations to implement a section of the National Defense Authorization Act for FY 2010. The regulations amend OPM's current regulations at 5 CFR part 630, subpart L, to cover qualifying exigencies that arise when the spouse, son, daughter, or parent of an employee is on covered active duty in the Armed Forces or has been notified of an impending call or order to covered active duty. The final regulations are, to the extent appropriate, consistent with the regulations prescribed by the Secretary of Labor to carry out the family medical leave entitlement for employers covered under title I of the FMLA, which primarily applies to employers in the private sector, but also includes some federal entities, such as the U.S. Postal Service. Similar to the DOL regulations, OPM provides for eight categories of qualifying exigencies in its regulations: short-notice deployments, military events and related activities, childcare and school activities, financial and legal arrangements, counseling, rest and recuperation, post-deployment activities, and additional activities not encompassed in the other categories when the agency and employee agree they qualify as exigencies and agree to the timing and duration of the leave.
Under a bill introduced this week in the US House of Representatives, the Family and Medical Leave Act would be amended to allow employees to take leave to deal with incidents of domestic violence. Introduced by Representative Lynn Woolsey (D_CA,) the bill mirrors two other pieces of legislation introduced this year.
The Domestic Violence Leave Act (H.R. 3151) would allow employees to take FMLA leave to deal with acts of domestic violence, sexual assault and stalking aimed at either themselves or a spouse, which includes domestic partners and same-sex spouses. The law also allows employees to take leave to deal with domestic violence aimed at their parents or children. The bill would allow employees to take FMLA leave to obtain medical attentions for, or to recover from, injuries caused by domestic violence. Employees could also take leave to pursue either legal assistance, or remedies (which includes talking to the police or participating in a legal proceeding), to attend support groups or psychological counseling, to participate in safety planning, or to participate in any other activity “necessitated by domestic violence.”
Under the law, employees would be able to substitute any accrued paid leave for leave taken to deal with domestic violence. The bill does allow employers to request certification indicating that the need for leave is legitimate, but any information obtained as a result of such a request would have to be kept confidential. Employees could satisfy the request by providing the employer with police reports or witness statements, or by providing a written statement describing the reason for taking leave.
Woolsey issued a statement announcing the bill, in which she said that “domestic violence is a widespread problem affecting millions of people in the United States.” She said that “by providing this kind of workplace flexibility, we can create a healthy, supportive workplace environment that fosters a productive and successful business.”
Under legislation introduced last week in the U.S. House of Representatives, employers who hire independent contractors would face tougher penalties for employee misclassification and would be subject to new record-keeping requirements. The bill is the second major employee misclassification introduced into Congress this term, following the introduction of the Payroll Fraud Prevention Act (S. 770) in the Senate in April, 2011.
The Employee Misclassification Prevention Act (H.R. 3178) would amend the FLSA in several key ways. It would require employers to keep records on the employment status of their workers, be they employee or independent contractor. The bill would also require employers to provide notice to their workers of their right to challenge that classification. Under the bill, employers would be required to notify their workers, within six months of the bill’s enactment, of their work classification and would have to direct those workers to a DOL website that the law would create to aid workers in obtaining information about their rights. The law would also establish record-keeping requirements for independent contractors and if an employer fails to maintain required records on those workers, the DOL would consider the workers to be employees.
The law also imposes tougher penalties on employers who misclassify their workers. Employers who violate the law for the first time would face civil penalties of up to $1,100 per employee, while repeat or willful offenders would be fines $5,000 per employee. In addition, the bill would amend the Social Security Act to create administrative penalties either for employee misclassification or for paying unreported wages to employees without proper recordkeeping for unemployment compensation purposes.
In addition, the bill contains provisions protecting employees. The bill would make it unlawful for an employer to discriminate or retaliate against workers who exercise their rights under the bill, including opposing unlawful practices. The bill would require the DOL to perform targeted audits focusing on employers in industries that frequently misclassify employees and would require state unemployment insurance agencies to conduct audits to identify employers who are misclassifying employees.
One of the bill’s co-sponsors, Representative George Miller (D-CA) contends that, given the number of workers classified as independent contractors (approximately 10 million) it is essential to toughen laws on employee misclassification, which he described as “fundamentally unfair to our nation’s law-abiding employers, and unfair to the countless workers who are unlawfully stripped of basic protections like minimum wage, overtime, and the right to organize.”
The bill’s main sponsor, Representative Lynn Woolsey (D-CA), portrayed the bill as a deficit reduction bill, saying that “ending misclassification is an important step toward paying down the national debt, empowering American workers and invigorating the national economy.”
Civil monetary penalties upheld in first hearing conducted under Child Labor Enhanced Penalty Program
The DOL has announced that Chief Administrative Law Judge Stephen L. Purcell has upheld a civil monetary penalty against Progressive Protein LLC in the first hearing conducted under the Wage and Hour Division’s Child Labor Enhanced Penalty Program. The $100,000 penalty against the company stems from the death of a 17-year-old worker who was killed in May, 2009 at the company's Omaha meat rendering plant when a forklift he was driving flipped over.
This Child Labor Enhanced Penalty Program was created under the Genetic Information Nondiscrimination Act and gives the DOL authority to assess greater penalties when child labor provision violations result in the death or serious injury of a minor. The WHD investigation found that the employer failed to verify the worker’s age, even though it knew that the worker was a high school student. The citation was the second leveled against the employer over the incident. The DOL previously cited the company for four violations, including insufficient training for, and inadequate supervision of, powered industrial truck operators-in-training, the lack of seat belt use, deficient energy control procedures and improper record keeping.
The DOL hailed the ruling as a victory.
“We are gratified that the department's use of the tools established under the Genetic Information and Nondiscrimination Act was upheld,” said Secretary of Labor Hilda L. Solis.
The DOL, in the October 28 edition of the Federal Register, has published a notice extending the period for filing written comments on the DOL’s proposed revisions to its child labor regulations. The comment period will be extended for an additional 30 days and any comments must now be received by December 1, 2011, rather than November 1, 2011.
The DOL published a notice of proposed rulemaking for revisions to the child labor regulations on September 2, 2011. Under the proposed regulation, the DOL would toughen current child labor regulations prohibiting agricultural work with animals and in pesticide handling, timber operations, manure pits, and storage bins. It would also bar farmworkers under age 16 from participating in the cultivation, harvesting, and curing of tobacco and would prohibit minors in both agricultural and nonagricultural employment from using electronic devices (including communication devices) while operating power-driven equipment. In addition, the proposed rule would create a new nonagricultural hazardous occupations order that would prevent children under 18 from being employed in the storing, marketing, and transporting of farm product raw materials. Prohibited places of employment would include country grain elevators, grain bins, silos, feed lots, stockyards, livestock exchanges, and livestock auctions.
Additionally, the proposal would prohibit farmworkers under 16 from operating almost all power-driven equipment. A similar prohibition has existed, as part of the nonagricultural child labor provisions, for more than 50 years. A limited exemption would permit some student learners to operate certain farm implements and tractors, when equipped with proper rollover protection structures and seat belts, under specified conditions.
LEADING CASE NEWS
Summary judgment for an employer was reversed and remanded by the Seventh Circuit because the court found that a reasonable jury could determine that the decision to select an employee for termination was prompted by his request for leave in light of upcoming surgery and violated the FMLA (Shaffer v American Med Assoc, October 18, 2011, Williams, A.).
Background. Budget cuts mandated that some employees lose their jobs, including at least one in the department where the employee worked as the director of leadership communications. The employee’s supervisor appeared to be leaning toward letting another person go, but soon after the employee requested leave for knee surgery, his supervisor decided that he would be the person let go in the department. A district court agreed with the employer that the leave request had nothing to do with the decision to dismiss the employee and granted the employer’s motion for summary judgment. The employee appealed.
Waiver. The Seventh Circuit first noted that it was not surprising that one of the pieces of evidence on which the employee relied was his supervisor’s e-mail notifying the Chief Marketing Officer (CMO) that he had decided the employee was the individual to be terminated. The employer, however, argued that the appeals court could not consider the e-mail because the district court stated that it did not consider any facts that were not contained in the parties’ Rule 56.1 statements. Noting that was “certainly within a district court’s prerogative to do,” the appeals court wrote that the district court’s statement did not support the employer’s argument that the Seventh Circuit could not consider the email in this case because the district court’s opinion was clear that the e-mail was not something it had refused to consider. “In fact, the district court spent an entire five-sentence paragraph in the ‘Relevant Facts’ section of its opinion detailing that very e-mail.” And while the employer argued that the employee failed to include the email in his Rule 56.1 statement, the employee discussed the email in paragraph 12 of his Statement of Additional Facts and also stated in that paragraph that a true and accurate copy of the e-mail was attached as Appendix 6, which it was.
The appeals court also pointed out that the employee specifically discussed the e-mail on pages 4 and 5 of his Memorandum in Opposition to his employer’s motion for summary judgment, and pointed to the key passage he relied on which stated the team was already preparing for the employee’s short-term leave and that his departure “should not have any immediate negative impact.” Further, the employee argued that the e-mail did not mention his employer’s explanation as the reason for termination decision during litigation, namely that the employee’s supervisor could easily absorb his responsibilities. The appeals court concluded that the employee appropriately raised the e-mail before the district court and the district court discussed it in its opinion, so there was no reason the employee could not point to it on appeal.
After concluding that the employee was eligible for FMLA protection, covered by the FMLA, and provided sufficient notice of his intent to take leave, the circuit court wrote that the issue it needed to determine was whether a reasonable jury could conclude that the employee’s exercise of his right to take FMLA leave was a motivating factor in the decision to eliminate his position.
Change of plans. As of October 28, 2008, the employee’s supervisor had decided to eliminate another worker’s position and not the employee’s. The supervisor even sent an e-mail to his supervisor detailing why he did not think the elimination of any additional positions beyond that worker’s was in the employer’s best interest. The supervisor also said in his deposition that downsizing the worker’s position would be the “obvious choice” to anyone looking at the situation from the outside since the employer was no longer proceeding with one of the worker’s core campaigns.
Paper trail. Three weeks later, however, the supervisor changed his mind. The court noted that the only events of note in the interim were the employee’s request for leave and the employer’s early November Interim Meeting in Orlando. The employee sent his supervisor an e-mail in November informing him that he would be having knee replacement surgery in January and was setting up a claim for short-term disability benefits. When the supervisor later e-mailed the CMO that he had now decided to eliminate the employee’s position and keep the other worker, he included a comment that the team was already preparing for the employee’s short-term leave in January, and his departure should not have any immediate negative impact. The court determined that a jury could find that this statement, the change in the decision of whom to terminate, and the timing of the new decision soon after the employee’s leave request supported his argument that his request for leave led to his termination.
The court noted that a jury might also give credence to the employee’s argument that the memo was backdated by an HR representative to make it appear that the decision to let him go was not influenced by the leave request. In February 2009, the HR rep typed up a copy of handwritten notes he said came from an earlier discussion with the supervisor regarding the employee’s discharge. The HR rep dated the typed notes November 25, 2008, which he said was the same date as his earlier handwritten notes. However, the supervisor had no recollection of a meeting that day with the HR rep, nor did his calendar reflect one.
The court noted that at first glance, a memo dated after the employee requested leave would not seem to support the theory that evidence had been manufactured to suggest that the leave request did not influence the termination decision. However, when the court views the evidence in the light most favorable to the employee, the record supports a conclusion that when the HR rep typed up the notes in February, he was acting under the impression that the leave request had not come until November 26. The troubling fact that the HR rep shredded his handwritten notes after learning of potential litigation could also weigh in the employee’s favor, wrote the court. A jury might conclude from all this that the HR rep had been trying to create a paper trail.
Shifting explanations. Further, a jury could look to the different explanations given at different times for the employee’s termination. The employer points to the early November Interim Meeting and maintains it helped lead the supervisor to change his mind about whom to terminate, as it says the supervisor had to fill in for the employee to help a junior speech writer when the employee was unavailable, and also that the supervisor was concerned about the absence without explanation. Yet, the supervisor told the employee that the decision to terminate him had nothing to do with his performance and did not mention any concern about the Interim Meeting, and the HR rep testified in his deposition that he was not told of any problems with the employee at the meeting or that his performance played any role in the termination decision.
The HR rep’s typed notes stated that the position was eliminated because the supervisor could accommodate having the speech writing staff report to him, among other things. In the supervisor’s e-mail to the CMO, he justified his change in decision to fire the employee instead of another worker by stating that that worker had evolved into a flexible utility man who could fill in the gaps. Nothing was said about the Interim Meeting or the supervisor’s ability to absorb the employee’s responsibilities, continued the court, noting that one of the staff speech writers stated in his deposition that supervisor told him the employee position had been eliminated for another reason, that he had the highest salary and largest cost.
Noting that a jury may agree with the employer’s argument that its termination decision had nothing to do with the employee’s request for leave, the court pointed out that the “competing reasonable inferences that can be drawn from the record are not for us to resolve at the summary judgment stage” as the court was obligated to view the record in the light most favorable to the employee and to refrain from weighing the evidence or deciding which inferences to draw from the facts. Because a reasonable jury could find in the employee’s favor, the court reversed the grant of summary judgment against him.
The case number is 10-2117.
Jeffrey Lynn Taren (Kinoy, Taren, Geraghty & Potter) for Plaintiff. Benjamin Edward Gehrt (Seyfarth Shaw LLP) for Defendant.
11thCir: Grower denied wage credit for housing for H-2A workers, but entitled to wage credit for meals
An employer that hired migrant farm workers through the H-2A visa program was entitled to available wage credits under the FLSA for meals that federal law required the employer to provide the workers, ruled the Eleventh Circuit (Barrientos v Covarrubias, October 27, 2011, Pryor, W). Additionally, the appeals court determined that the grower was not liable under principles of agency law for the fees that third parties charged the workers in their efforts to obtain employment. However, the employer was not entitled to wage credits for housing because that cost primarily benefited the employer.
Background. The farm workers were hired by the grower during the planting and harvesting seasons for its Vidalia onions. According to the workers, the grower paid them below the minimum wage when it failed to reimburse them for fees and travel costs they incurred during their travel from Mexico to the grower’s farm in Georgia. A federal district court held that the grower was entitled to wage credits for the costs of housing and meals that the employer provided the workers, and that those credits offset any amounts owed the workers for travel expenses. The Secretary of Labor, as amicus, argued that the grower was not entitled to wage credits for the provision of free housing for the workers, because this cost primarily benefited the employer. Here, the Eleventh Circuit deferred to the Secretary, and held that the grower cannot credit the cost of housing in the wages paid to the workers.
Although the grower contracted with a labor contractor to handle the paperwork and administrative issues associated with hiring foreign workers, the employer performed most of its own recruiting itself. Under the H-2A program, employers must provide certain benefits to workers, including furnished housing, and pay for reasonable costs incurred in transportation and daily subsistence from home to the site of work if they complete 50 percent of the work contract period. The workers were also charged a $200 fee by the contractor for services provided at the consulate, and border fees. Five workers filed suit alleging that the employer effectively shifted business expenses to the workers and effectively lowered pay below the minimum wage. The district court granted summary judgment in favor of the grower on all of the employees’ claims.
Wage credits. The Eleventh Circuit determined that the grower was not entitled to a wage credit for housing, but was entitled to a wage credit for meals. FLSA Sec. 3(m) provides that an employer may lawfully deduct from an employee’s pay the reasonable cost of employer provided housing and meals. However, the workers and the Secretary of Labor successfully argued that Sec. 3(m) merely establishes a rebuttable presumption that an employer may receive a wage credit for the cost of housing. That presumption is rebutted when the provision of housing is “primarily for the benefit or convenience of the employer.” Here, the appeals court referenced its own ruling in Arriaga v Fla Pac Farms, LLC, to find that under 29 CFR Sec. 531.3(d)(2), employers that hire workers through the H-2A program must reimburse employees for expenditures on facilities that primarily benefit the employer to the extent that they reduce employee pay below the minimum wage.
Moreover, under the deferential standard of Auer v Robbins, the Eleventh Circuit accepted the Secretary’s interpretation that an employer may not receive wage credits under Sec. 3(m) for housing provided to H-2A workers because that expense primarily benefits the employer under Sec. 531.3(d)(1). The appeals court disagreed with the employer’s contention that Auer was inapplicable because the Secretary has no authority under the FLSA to require it to pay the expenses of workers. The employer ignored statutory language in Sec. 6 authorizing the Secretary to supervise the payment of unpaid minimum wages owed to employees.
The court also rejected the employer’s contention that the “primarily benefits” test of Sec. 531.3(d)(1) is inapplicable to housing because the only restrictions that Sec. 3(m) imposes on the availability of wage credits for the cost of housing are the requirements that the housing be “customarily furnished” and that the cost be “reasonable.” Rather, Sec. 3(m) treats housing as a type of facility, and Sec. 531.3(d)(1) provides the criterion for the determination of whether a facility is “reasonable.” The Eleventh Circuit has applied Sec. 531.3(d)(1) to deny wage credits for “other facilities,” even though Sec. 3(m) places no more restrictions on the availability of credits for “other facilities” than for lodging. Thus, the court applied the “primarily benefits” test of Sec. 531.3(d)(1) to the provision of housing by the grower to workers hired through the H-2A program. The cost of housing that the grower provided to the H-2A workers was a mandatory business expense, and could not be shifted to the employees.
Meal credit. As noted earlier, the grower was entitled to receive a wage credit for reimbursements for meals. Federal regulations required the grower to promise to reimburse workers for meal expenses incurred during their travel to the grower’s farm. Still, the workers’ arguments that the grower may not receive wage credits for meal reimbursements failed. Because the workers alleged a violation of the FLSA, not the regulations governing the H-2A visa program, they could not rely on H-2A regulations that required the grower to cover their meal expenses, noted the court. Further, the H-2A regulations required only that the grower promise to provide reimbursements for meals under the terms of employment contracts. Thus, a failure of the grower to provide those reimbursements would be a violation of a private contract, not a violation of federal law. Consequently, the court affirmed the lower court’s grant of summary judgment in favor of the grower that it may receive wage credits for meals provided to the workers.
The case number is 10-13412.
George Brian Spears (Law Office of Brian Spears) for Plaintiffs-Appellants. DuAnn Cowart Davis (Cheney & Cheney, PC) for Movant. J. Curt Thomas (Brennan & Wasden, LLP) for Defendants-Appellees.