Category Archives: Labor Law

June 22, 2012

NLRB’s New Website

The U.S. Department of Labor received much fanfare when it rolled out its new timesheet app. In its news release of 2011 (http://www.dol.gov/opa/media/press/whd/WHD20110686.htm), DOL indicated that it believed the application would ensure that workers received the wages to which they were entitled.

Not to be outdone, although not as an application, the National Labor Relations Board announced that it has launched a new interactive website to describe the rights of employees to engage in protected concerted activity under Section 7 of the National Labor Relations Act. The webpage can be found at: http://www.nlrb.gov/concerted-activity.

You will see that the NLRB details numerous case examples where it found the conduct of employers to violate the act. The interactive map serves to lead the reader to the detail of a case that provides factual detail about the violation. This is just another example of how the social media network can be used as a public relations effort to justify an agency's public purpose and to inform employees of their rights.

For more information on the NLRB or other traditional labor relations questions, feel free to send a comment or reach me directly.

Steven M. Gutierrez

May 15, 2012

Court Invalidates NLRB’s “Ambush Election” Rule

A federal district court judge invalidated the National Labor Relations Board's (NLRB's) controversial "ambush election" rule yesterday, ruling that the Board had lacked a three-member quorum needed to pass the rule last December. The ruling followed a failed Congressional attempt to halt the rule, and came just two weeks after the rule became effective on April 30th. For more information, see the article written by my colleagues Brian Mumaugh and Brad Williams.

April 16, 2012

Court Strikes Down NLRB Notice-Posting Requirement, Leaves Employers Hanging

By Brian M. Mumaugh and Bradford J. Williams

The U.S. District Court for the District of South Carolina just became the second federal district court to weigh in on the legality of a National Labor Relations Board (NLRB) rule requiring most private employers to post a notice informing employees of their rights under the National Labor Relations Act (NLRA). In his April 13, 2012, decision, Judge David C. Norton held that the notice-posting rule exceeded the NLRB’s authority in violation of administrative law. The decision leaves employers hanging regarding their obligations in advance of the April 30, 2012, notice-posting deadline.

In August 2011, the NLRB issued a final administrative rule requiring all private employers covered by the Act to post 11-by-17 inch posters “in conspicuous places” advising employees of their rights under the NLRA. These rights include the right to form, join, or assist unions; to negotiate with employers through unions; to bargain collectively through representatives of employees’ own choosing; and to strike and picket. The rule was stridently opposed by business groups which felt that it violated employers’ First Amendment rights, and mandated the posting of an excessively pro-union message. The final rule required employers who customarily communicate with employees regarding personnel matters using an intranet or internet site to post the notice prominently on that site.

To ensure compliance, the rule provided that failure to post the required notice would be deemed an unfair labor practice (ULP) under Section 8(a)(1) of the Act. The Board could automatically toll (or stay) the six-month statute of limitations for all ULP actions—not just those arising out of a failure to post—where employers failed to post the notice. In addition, the knowing and willful refusal to post the notice could be used “as evidence of unlawful motive” in ULP cases in which motivation was at issue.

In late 2011, the NLRB’s final administrative rule was challenged in lawsuits filed in the U.S. District Court for the District of Columbia, and the U.S. District Court for the District of South Carolina. Due in part to this pending litigation, the rule’s effective date was postponed to January 31, 2012, and then to April 30, 2012.

On March 2, 2012, Judge Amy Jackson of the U.S. District Court for the District of Columbia issued a ruling in the first of the two lawsuits, National Association of Manufacturers v. NLRB, No.11-1629 (ABJ) (D.D.C. Mar. 2, 2012). Judge Jackson broadly upheld the NLRB’s right to issue the notice-posting rule, but struck down automatic sanctions for failure to post the required notice. She held that failure to post might constitute an ULP, and might toll the statute of limitations, but found that the Board would have to make specific findings in each ULP case to impose such sanctions. Judge Jackson’s decision is currently on appeal to the U.S. Court of Appeals for the District of Columbia Circuit, and the appellate court has not yet ruled on a motion that would enjoin the rule’s enforcement pending the court’s decision.

Last Friday, Judge Norton stepped into this fray by issuing a diametrically opposed decision in the second of the two lawsuits, Chamber of Commerce v. NLRB, No. 11-cv-2516 (DCN) (D.S.C. Apr. 13, 2012). Judge Norton found that the Board had exceeded its authority under Section 6 of the Act by issuing the notice-posting rule. Noting that Section 6 gives the Board the power to make “such rules and regulations as may be necessary to carry out the provisions of the [NLRA],” the judge found that the notice-posting rule was not “necessary” to any of the Act’s provisions. On the contrary, the NLRA empowers the Board to prevent and resolve ULP charges and to conduct representative elections. Judge Norton noted that these duties are inherently “reactive,” and found that nothing in the Act requires employers to “proactively” post notices of employee rights. As Judge Norton concluded: “Neither Section 6 nor any other section of the NLRA even mentions the issue of notice posting.”

Judge Norton further rejected the argument that the Board had acted appropriately by filling a statutory “gap” in the NLRA. He observed that Congress had inserted at least eight explicit notice requirements into federal labor statutes since 1934, while the NLRA had “remained silent.” He concluded that Congress “clearly knows how to include a notice-posting requirement in a federal labor statute when it so desires,” but found that there is “not a single trace of statutory text that indicates Congress intended for the Board to proactively regulate employers in this manner.”

Interestingly, Judge Norton did not discredit the Board’s factual finding that there is an increased need for employees to learn of their NLRA rights, and he did not dispute Judge Jackson’s conclusion that the Board had articulated a rational connection between this finding, and the Board’s decision to promulgate the notice-posting rule. Nonetheless, he implicitly found that any such connection was irrelevant in light of the plain language and structure of the Act, which he said compelled his conclusion that the Board lacked the authority to promulgate the rule.

Judge Norton’s decision is extremely favorable for employers, but is it unfortunately only likely controlling in the District of South Carolina. Conversely, Judge Jackson’s decision is broadly disappointing for employers, but is only likely controlling in the District of Columbia. Courts in other jurisdictions—including in the Tenth Circuit—have yet to weigh in on the issue. If Judge Norton’s decision is eventually appealed (as is likely), and the U.S. Court of Appeals for the Fourth Circuit reaches a different decision than the U.S. Court of Appeals for the District of Columbia, the notice-posting issue could end up before the U.S. Supreme Court.

A spokesman for the NLRB announced last Friday that the Board was studying Judge Norton’s decision, and would be deciding on an appropriate course of action. As it has done before, the Board might postpone enforcement of the rule pending further court action. Alternatively, the Board might take the position that the rule is only unenforceable in the District of South Carolina, but is enforceable elsewhere. The U.S. District Court for the District of South Carolina, or the U.S. Court of Appeals for the District of Columbia Circuit (or even the U.S. Court of Appeals for the Fourth Circuit, if Judge Norton’s ruling is appealed), could separately enjoin enforcement of the rule given the current split in legal opinion.

In the wake of Judge Norton’s decision, employers are advised to monitor further developments in both the District of South Carolina case, and in the District of Columbia case. Employers may also want to monitor the NLRB’s website. As the April 30th notice-posting deadline approaches, employers may wish to consult with legal counsel about the potential costs of posting an arguably pro-union poster, and the likelihood that the notice-posting rule may eventually be invalidated in their jurisdiction.

For more information or advice on compliance, please contact Brian M. Mumaugh or Bradford J. Williams of Holland & Hart’s Labor & Employment Practice Group.

March 27, 2012

Furor Over Facebook Continues

By Mark Wiletsky

Following up on my post last week, the flap over employers asking applicants to turn over their passwords to social media accounts, such as Facebook, rages on. Two senators–Sens. Richard Blumenthal (D-Conn.) and Charles Schumer (D-N.Y.)–on March 25 asked the Department of Justice and the EEOC to investigate this practice (http://blumenthal.senate.gov/newsroom/press/release/blumenthal-schumer-employer-demands-for-facebook-and-email-passwords-as-precondition-for-job-interviews-may-be-a-violation-of-federal-law-senators-ask-feds-to-investigate). Facebook joined the fray by warning employers about this practice, and of course the ACLU has raised concerns as well (http://www.cnn.com/2012/03/23/tech/social-media/facebook-employers/index.html?hpt=hp_t3). Is this issue being overblown? Other than media reports about a couple of public entities, it is unclear how many employers are demanding applicants turn over passwords to social media accounts as a condition of employment (or consideration for employment). Still, the heightened media attention is a good reminder for employers to review their hiring practices and their social media policies. If you have not yet read the NLRB's January 25, 2012 Operations Management Memo (http://www.nlrb.gov/news/acting-general-counsel-issues-second-social-media-report), I recommend doing so. Even though I disagree with certain aspects of the Memo, it provides some good examples of things to avoid in both social media policies and discipline/termination situations involving social media–for Union and non-Union work environments.

March 5, 2012

Court Upholds NLRB Notice-Posting Requirement, Strikes Down Automatic Sanctions for Failure to Post

By Bradford J. Williams

The U.S. District Court for the District of Columbia issued a highly anticipated ruling last Friday, broadly upholding the National Labor Relations Board’s (NLRB’s) right to issue a rule requiring most private employers to notify employees of their rights under the National Labor Relations Act (NLRA) by posting a notice. The ruling struck down automatic sanctions for failure to post the required notice, but did not altogether eliminate the possibility that failure to post might constitute an unfair labor practice (ULP) under the Act. Absent further Board postponement in light of a likely appeal, or a contrary ruling from a second district court still considering the matter, the notice-posting requirement will go into effect on April 30, 2012.

In August 2011, the NLRB issued a final administrative rule requiring all private employers covered by the Act to post 11-by-17 inch posters “in conspicuous places” advising employees of their rights under the NLRA. Employers who customarily communicate with employees regarding personnel matters using an intranet or internet site were further required to post the notice prominently on that site. As originally written, the rule provided that failure to post would be deemed an ULP under Section 8(a)(1) of the Act. It further permitted the Board to automatically toll (or stay) the six-month statute of limitations for all ULP actions—not just those arising out of a failure to post—where employers had failed to post the required notice.

In late 2011, the NLRB’s final rule was challenged in lawsuits filed in the U.S. District Court for the District of Columbia, and the U.S. District Court for the District of South Carolina. Due in part to this pending litigation, the rule’s original November 14, 2011, effective date was initially postponed to January 31, 2012, and then postponed again to April 30, 2012.

Last Friday, Judge Amy Jackson of the U.S. District Court for the District of Columbia issued her ruling in one of the two lawsuits, National Association of Manufacturers v. NLRB, No.11-1629 (ABJ) (D.D.C. March 2, 2012). The judge rejected the plaintiffs’ contention that the NLRB had exceeded its authority in promulgating the notice-posting requirement. Finding that Congress had not “unambiguously intended to preclude the Board from promulgating a rule that requires employers to post a notice informing employees of their rights under the Act,” she upheld the notice-posting requirement as a valid exercise of the Board’s authority under the deferential standard of review applicable to administrative rulemaking.

Despite upholding the notice-posting requirement, Judge Jackson found that the NLRB had nonetheless exceeded its authority in automatically deeming all failures to post to be ULPs under the Act. Because Section 8(a)(1) only prohibited employers from “interfer[ing]” with rights guaranteed by the Act, it only prohibited employers from “getting in the way – from doing something that impedes or hampers an employee’s exercise of the rights guaranteed by [Section 7] of the statute.” The automatic sanction of an ULP for any employer who failed to post would not distinguish between situations in which an employer’s failure was intended to or did exert influence over employees’ organizational efforts, and those in which an employer merely declined or failed to post the required notice. As such, the judge found that the automatic sanction of an ULP was inconsistent with the Act’s plain meaning.

Critically, Judge Jackson noted that her decision did not “prevent[] the Board from finding that a failure to post constitutes an unfair labor practice in any individual case brought before it.” As such, the Board may still determine that any particular failure to post constitutes an ULP, at least assuming it makes specific findings that the failure actually interfered with an employee’s exercise of his or her rights.

For similar reasons, Judge Jackson struck down the rule’s provision permitting the Board to automatically stay the statute of limitations in any ULP action where the employer had failed to post the required notice. The judge found that the Act provided an unambiguous six-month statute of limitations, and that the rule effectively supplanted this limitations period for a broad class of employers regardless of particular circumstances. Again, she nonetheless observed that, under a well-established common law doctrine, her decision did not “prevent the Board from considering an employer’s failure to post the employee rights notice in evaluating a plaintiff’s equitable tolling defense in an individual case before it.”

Judge Jackson’s March 2nd ruling is broadly disappointing for employers. It upholds the notice-posting requirement that will go into effect on April 30th absent further Board postponement, or a contrary ruling in the second pending lawsuit, Chamber of Commerce v. NLRB, D.S.C., No. 11-cv-2516. It further permits the NLRB to find individual failures to post to be ULPs under the Act, at least given appropriate factual findings. Finally, the judge’s statute of limitations ruling may expose employers to stale ULP charges where employees succeed in showing that they were unaware of their rights under the NLRA due to an employer’s failure to post.

The plaintiffs in National Association of Manufacturers have already vowed to appeal Judge Jackson’s ruling. Pending any eventual reversal by the U.S. Court of Appeals for the District of Columbia, or any contrary ruling by the U.S. District Court for the District of South Carolina, employers should prepare now to comply with the rule’s notice-posting requirement before April 30th. For more information or questions, please contact Bradford J. Williams of Holland & Hart’s Labor & Employment Practice Group at (303) 295-8121 or bjwilliams@hollandhart.com.

October 6, 2011

NLRB Postpones Posting Rule

Good news. The NLRB (National Labor Relations Board) has postponed the effective date on the private business posting rule that informs workers about their right to form a union. The Board indicated on Wednesday that there has been too much confusion over which business are covered under the rule. For a good summary of the posting rule from my partner Jeff Johnson click on this link: http://www.hollandhart.com/newsitem.cfm?ID=1873

For more information, feel free to reach out.

Steven M. Gutierrez

June 6, 2011

Newspaper Loses Arbitration Argument, but Can Hold Employee to His Word

By Jude Biggs

Introduction

Unionized employees file grievances when they believe their employer has not followed the collective bargaining agreement (CBA”); usually such an employee argues the employer did not have “just cause” to discipline, demote, or fire him. If the grievance is not decided in favor of the employee, the employee can take the grievance to arbitration. In most cases, however, union employees need not grieve or arbitrate their statutory discrimination claims; they still have a right outside of the CBA to claim discrimination, just as a non-union employee does, so they can still litigate the claim in court. In 2009, the Supreme Court muddied the waters and said some CBAs may be worded clearly enough that a union employee may only arbitrate a discrimination or retaliation claim through the CBA process. Since then, courts have attempted to sort out just what “clearly enough” means. Courts have also struggled with what to do when an employee says he is disabled when he applies for social security benefits, but then claims he was qualified for a job and should be allowed to sue for discrimination. The following case is the latest word from the Tenth Circuit on both of these issues.

Background

John Mathews, a unionized employee of the Denver Newspaper Agency (the “Agency”), worked for the Agency from 1983 through 2005. At the time his claims arose, he was a Unit Supervisor (but still a union employee). In June 2005, a female employee complained that Mathews had made inappropriate comments; Mathews was placed on paid leave while the complaint was investigated. Once the investigation was completed, the union filed a grievance against Mathews on behalf of the complaining employee, and the Agency demoted him from his Unit Supervisor position on July 1, 2005. That same day, Mathews obtained a doctor’s note saying he could not return to work for medical reasons.

Mathews was originally from southern India. He filed a grievance against the Agency, claiming his demotion was due to his national origin and it violated the union contract’s anti-discrimination provision. He also claimed he was demoted in retaliation for complaints of race, color, and national origin discrimination that he had made in May and June of 2005. He later amended the grievance to remove any reference to a violation of anti-discrimination statutes, but he still claimed he was “discriminated” against when he was demoted. Under the CBA, Mathews could choose to arbitrate his grievance or litigate it in court; in this case, he chose to pursue arbitration. The arbitrator held a 4-day evidentiary hearing on the claims and ruled against Mathews. Mathews then filed a claim for disability benefits with the Social Security Administration (“SSA”), alleging complete and total disability beginning on June 11, 2005 (the date of the alleged comments that led to his demotion).

Mathews filed a lawsuit in district court, claiming he had been discriminated and retaliated against, in violation of Title VII of the Civil Rights Act and §1981 (another civil rights statute that prohibits race discrimination). The district judge ruled Mathews’s decision to arbitrate his claims prevented him from doing so again in court; in other words, he could not have two bites at the apple. In addition, the judge ruled that Mathews’s statement to the SSA that he was totally disabled and unable to work prevented him from claiming he could still do the job he held before. Hence, he was “judicially estopped” or prevented from maintaining a claim for discrimination, as he could not prove he was qualified for the job. Mathews then appealed to the Tenth Circuit.

The Tenth Circuit Says Mathews Gets Two Bites at the Apple

The Tenth Circuit looked first at when a union employee is limited to bringing a statutory discrimination claim under the arbitration procedure in a CBA, and when a union employee may file the discrimination claim under the CBA (if he wishes) and also in court. The Tenth Circuit explained that, based on a 2009 Supreme Court decision (Penn Plaza v. Pyett, 129 S. Ct. 1456 (2009)), a CBA may be worded in such a way as to be the exclusive remedy for claims based on anti-discrimination and anti-retaliation statutes. However, normally, a union employee has both contractual rights under the CBA and statutory rights not to be discriminated or retaliated against. The CBA preempts statutory rights only when the CBA expressly says that statutory claims are to be arbitrated under the CBA. In Mathews’s case, the CBA did say the company and union would not discriminate “in accordance with and as required by applicable state and federal laws.” That language, to the Tenth Circuit, meant only that the company and union agreed discriminatory conduct could violate both the CBA and anti-discrimination statutes; it did not mean submitting a claim of discrimination to arbitration waived the right to sue in court. In addition, Mathews had amended his initial grievance to delete any reference to statutory claims. As a result, the Tenth Circuit held the CBA arbitration process was not Mathews’s exclusive remedy and Mathews could also sue in court.

But the Tenth Circuit Says Mathews Can’t Have It Both Ways

The Tenth Circuit then turned to Mathews’s claim that he could be totally disabled for purposes of getting social security disability benefits but not disabled for purposes of claiming he could still do his job. The Tenth Circuit pointed out that Mathews had to prove he could do the job before he could prove he was discriminated against. Mathews admitted he could not do the job anymore, but blamed the company for his disability. Since the company caused his disability, he argued, it should not escape liability. The Tenth Circuit did not buy his arguments.

In reaching that conclusion, the Tenth Circuit confirmed that, just because an employee claims to be disabled for purposes of gaining social security disability benefits, he is not necessarily estopped (or prevented) from saying he was qualified for a job in a subsequent lawsuit. However, such an employee must explain why he has taken inconsistent positions.

Looking at the medical evidence, the Tenth Circuit saw that Mathews had persuaded the social security judge that he was disabled due to a bulging disc of the cervical spine and an affective disorder as of June 11, 2005. In the discrimination case, he claimed “to the best of his recollection,” his disabling depression occurred after the Agency placed him on administrative leave on June 17, 2005. The two positions were entirely inconsistent, and he made no effort to explain the discrepancy. Mathews’s inconsistent statement to the SSA gave him the benefit of significant disability payments, and allowing him to recover for a lawsuit based on inconsistent statements would give him an unfair advantage. As a result, the Tenth Circuit concluded that the district judge had not abused his discretion by concluding Mathews could not establish a claim of discriminatory demotion.

Retaliatory Demotion Claim Still Survives

The court then reviewed whether Mathews could still sue for retaliatory demotion. Since that claim was not waived in the arbitration process, the court looked at the evidence supporting such a claim, and concluded a jury might rule in Mathews’s favor. The record showed Mathews was placed on leave on June 17, 2005, but he had made complaints to his supervisors on May 31 and sometime after June 17 but before his July 1 demotion. Given that timing, it was possible a jury might conclude the demotion was due to his complaints. As a result, the court remanded the case for further proceedings on the retaliatory demotion claim.

Lessons Learned

The Mathews case teaches union employers in Colorado (and other states within the Tenth Circuit’s reach) that, if they want employees’ statutory discrimination claims to be resolved only through the arbitration process under the CBA, the CBA must say clearly that the arbitrator has the exclusive authority to hear statutory claims. It also helps if the employee says in the grievance that he believes the conduct he is complaining about violates the CBA and anti-discrimination statutes. To avoid the Mathews result, union employers may consider negotiating provisions in their CBAs stating not only that the arbitrator has exclusive authority to hear statutory claims, but also that any general claim of “discrimination” will be deemed both a contract and statutory violation. That may often be impractical, given the dynamics of negotiations, but it may work with some unions.

For more information on this case or arbitration law in general, please contact Jude Biggs at jbiggs@hollandhart.com.

This article is posted with permission from Colorado Employment Law Letter, which is published by M. Lee Smith Publishers LLC. For more information, go to www.hrhero.com.