Category Archives: Unions

September 26, 2018

SCOTUS Employment Cases and Petitions for The Upcoming Term

Steven Gutierrez

The Supreme Court of the United States will begin its upcoming session on Monday, October 1, 2018. Currently, eight justices preside over the high court following Justice Anthony Kennedy’s retirement after the end of the last term. As we saw when the Court was short a justice following Justice Scalia’s unexpected death in 2016, the lack of a full nine-justice panel may result in some interesting decisions. Here are highlights of the cases and petitions that employers will want to watch for the upcoming term.

ADEA Application to Small Public Employers

On the Court’s first day of the new term, the justices will hear oral argument in a case that asks whether the Age Discrimination in Employment Act (ADEA) applies to all public employers, regardless of size, or only to those with 20 or more employees. The ADEA prohibits discrimination against applicants and employees who are age 40 or older. An “employer” is defined by the ADEA as “a person engaged in an industry affecting commerce who has twenty or more employees . . .” which clearly sets a 20-employee threshold for private employers. But the ADEA also applies to state political subdivisions (i.e., public employers) and federal appeals courts have disagreed on whether the 20-employee threshold applies to such public employers.

The U.S. Courts of Appeals for the Sixth, Seventh, Eighth, and Tenth Circuits have held that the ADEA applies to public employers of any size. The Ninth Circuit, however, has ruled oppositely, applying the 20-employee threshold to public employers. The Supreme Court granted the petition for a writ of certiorari to resolve the split in the circuits. Mount Lemmon Fire Dist. v. Guido, No. 17-587.

Arbitration Agreements

During its last term, the Supreme Court ruled that arbitration agreements that require an employer and employee to resolve employment disputes on a one-on-one basis, thereby prohibiting class actions, do not violate the National Labor Relations Act. (See post on the Epic Systems Corp. v. Lewis decision here.) This term, additional questions related to arbitration agreements will be before the Court.

In Lamps Plus, Inc. v. Varela, No. 17-988, the Court will hear a case in which an arbitration agreement did not mention or address class arbitration. In its 2010 decision in Stolt-Nielsen, S.A. v. AnimalFeeds International Corp., SCOTUS held that a court could not order arbitration to proceed using class procedures unless there was a “contractual basis” for concluding that the parties have “agreed to” class arbitration. The Court stated that courts may not “presume” such consent from “mere silence on the issue of class arbitration” or “from the fact of the parties’ agreement to arbitrate.” Yet, in the Lamps Plus case, a divided Ninth Circuit panel inferred mutual assent to class arbitration from standard language in the agreement, such as that “arbitration shall be in lieu of any and all lawsuits or other civil legal proceedings.” Consequently, the Supreme Court will review the Ninth Circuit’s decision to determine whether the Federal Arbitration Act (FAA) allows a state-law interpretation of an arbitration agreement that would authorize class arbitration based solely on general language commonly used in arbitration agreements. Oral argument in that case is set for October 29, 2018.

Another arbitration case before the Court this term questions the application of the FAA to independent contractor agreements. In New Prime Inc. v. Oliveira, No. 17-340, the Court must decide whether Section 1 of the FAA, which applies on its face only to “contracts of employment,” is applicable to independent contractor agreements. In that case, an independent contractor had signed a mandatory arbitration provision with an interstate trucking company agreeing to arbitrate all workplace disputes on an individual basis. However, Section 1 of the FAA provides that it does not apply “to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” The independent contractor filed a putative class action in court and opposed arbitration based on the Section 1 exemption. The Court also will address whether the FAA’s Section 1 exemption is an arbitrability issue that must be resolved in arbitration rather than by a court. Both parties will argue this case before the Court on October 3, 2018.

Petitions Not Yet Granted

Parties have petitioned the high court to hear other employment-related cases this term. The Court may or may not grant review of these cases, but they raise significant employment issues so are worth reviewing here.

Sexual Orientation Discrimination and Gender Identity Under Title VII

Title VII of the Civil Rights Act of 1964 does not explicitly prohibit employment discrimination on the basis of sexual orientation. Yet, at least three federal appellate courts, the Second, Sixth, and Seventh Circuit Courts, have ruled that Title VII’s ban on sex discrimination extends to prohibit sexual orientation discrimination. The Eleventh Circuit, however, ruled that Title VII does not give rise to a claim for sexual orientation discrimination.

Two petitions are being considered by the Court on this important issue. Altitude Express Inc. v. Zarda, and Bostock v. Clayton County are the two cases up for consideration and should the Court agree to accept review of either (or both), the decision could prove to be one of the most important for employers this term.

In a separate petition by R.G. & G.R. Harris Funeral Homes, an employer is challenging a Sixth Circuit decision that ruled in favor of the Equal Employment Opportunity Commission (EEOC), holding that Title VII applies to employment discrimination based on gender identity. The case involved an employee who was fired after telling her boss that she would be transitioning to a female gender identity and wanted to wear women’s clothing at work. Again, the potential impact of a SCOTUS decision on this issue will be wide-reaching for employers in the U.S.

Gender Pay Inequity

Also up for potential SCOTUS review is the Ninth Circuit’s controversial decision that an employer may not use a person’s prior salary to justify pay disparities. The Equal Pay Act (EPA) prohibits employers from paying men and women differently for the same work, but there are exceptions that include “factors other than sex.” In Yovino v. Rizo, the question is whether salary history qualifies as a “factor other than sex” when employers make pay determinations. The Ninth Circuit said no, salary history is not a factor other than sex. But the Seventh Circuit has stated that salary history is indeed a factor other than sex. The circuit split could make this timely topic ripe for the Supreme Court to accept review.

Labor Cases

At least two labor law cases are seeking SCOTUS review this term. The first, Ohlendorf v. Local 876, UFCW, involves whether a union violates its duty of fair representation if it refuses to allow members to rescind their dues checkoff authorization because the members failed to follow proper rescission procedures. The Sixth Circuit ruled in favor of the union, holding that it acted within its bounds when it continued to collect union dues from a couple of members who didn’t properly rescind their dues checkoff authorization. The workers seek to appeal that decision through SCOTUS review.

Another petition being considered by the Court would address whether a successor employer is obligated to bargain with the predecessor company’s unionized workers when the successor takes over the assets of another business. In Creative Vision Resources v. NLRB, the successor company is challenging a ruling by the Fifth Circuit, enforcing a National Labor Relations Board decision that the company violated federal labor law when it failed to bargain with the predecessor company’s union before imposing initial employment terms and conditions on the workers.

Stay Tuned

As always, we will continue to track these cases and petitions as they make their way through the Supreme Court’s term. Be sure to subscribe to our blog so that you receive our updates.

August 2, 2018

NLRB Revisiting Use of Employer E-Mail Systems

Steven Gutierrez

By Steve Gutierrez

On August 1, 2018, the National Labor Relations Board (NLRB or Board) issued an invitation for interested parties to file briefs on whether the Board should change or overrule its 2014 decision in Purple Communications, Inc., 361 NLRB 1050. In that case, the Board ruled that employees who already have access to an employer’s e-mail system at work may use that e-mail system during non-working time for Section 7 communications. In other words, employees may send e-mails to their co-workers related to union organizing and concerted activities related to wages or other terms and conditions of employment via their company’s e-mail system.

The Purple Communications decision had overturned an earlier ruling in Register Guard, 351 NLRB 1110 (2007) which held that facially neutral employment policies restricting employees’ use of their employer’s e-mail system did not violate the National Labor Relations Act merely because the policies might have the effect of limiting the use of those systems for union-related communications. The Board is now considering a case that will permit it to reconsider the use of an employer’s e-mail system by employees for Section 7 purposes. In fact, the Board also seeks comments on the appropriate standard for the Board to evaluate policies that govern the use of other employer-owned computer resources, not just e-mail.

NLRB Chairman John Ring and NLRB members Marvin Kaplan and William Emanuel issued the Notice and Invitation to File Briefs over the dissent of the other two Board members, Mark Gaston Pearce and Lauren McFerran. Those wishing to file an amicus brief must submit it on or before September 5, 2018.

June 27, 2018

SCOTUS Deals Huge Blow to Government Unions

Steven Gutierrez

By Steve Gutierrez

In a 5-to-4 decision, the U.S. Supreme Court ruled that government employees who choose not to join a union cannot be forced to pay agency fees to the union. In so ruling, the Court overturns its 1977 ruling in Abood v. Detroit Board of Education which has permitted public sector unions to charge non-members a fee equivalent to union dues to cover the costs of collective bargaining, contract administration, and grievances. Janus v. AFSCME, 585 U.S. ___ (2018).

Free Speech Violated

Illinois state employee Mark Janus challenged paying agency fees to the union that represents the Illinois government employees. He alleged that he opposes many of the positions taken by the union, including positions advanced through collective bargaining. Janus argued that being forced to pay agency fees, which was authorized by Illinois law and consistent with Abood, violated his First Amendment right to free speech.

Five members of the high court agreed. In a decision written by Justice Alito, the majority ruled that “[t]he State’s extraction of agency fees from nonconsenting public-sector employees violates the First Amendment.” The Court overturned Abood, stating that neither of the two justifications for agency fees can survive First Amendment scrutiny.

First, the Court stated that the justification that agency fees promote labor peace does not pass muster. The majority pointed to the Federal Government and 28 states with laws that prohibit agency fees as evidence that conflict and disruption in represented government workforces is unfounded and “labor peace” can be achieved through less restrictive means than the assessment of agency fees.

Second, the majority dismissed the “free rider” argument that previously supported Abood. Specifically, unions argued, and the Abood Court agreed, employees who choose not to join the union without paying fees become “free riders” because as the exclusive representative for that group of employees, the union is required to represent even the non-members in collective bargaining and enforcing the terms of the collective bargaining agreement. In Janus, the Court stated that the “free rider” concern could not overcome the First Amendment issues. It again pointed to jurisdictions where agency fees are outlawed to state that unions continue to be willing to represent government employees there, despite the lack of agency fees being charged to non-members. The Court concluded that “Abood was wrongly decided and is now overruled.”

Strong Dissent

Justice Kagan wrote a strongly worded dissent, which was joined by Justices Ginsburg, Breyer, and Sotomayor. She wrote that “judicial disruption does not get any greater than what the Court does today.” The dissenting Justices see no justification for reversing Abood and its 41 years of precedent, finding that it has proved workable and is relied upon in at least 20 states that have created statutory schemes built upon its holding. The dissent stated that Abood struck an appropriate balance between public employees’ First Amendment rights and government entities’ interests in operating their workplaces with public employees paying their fair share of the cost of their union negotiating over the terms of their employment.

Practical Effect of Janus Ruling

The Court held that states and public-sector unions may no longer charge agency fees to non-member employees. In addition, it ruled that “neither an agency fee nor any other form of payment to a public-sector union may be deducted from an employee, nor may any other attempt be made to collect such a payment, unless the employee affirmatively consents to pay.” The Court stated that by agreeing to pay through an opt-in, nonmembers are waiving their First Amendment rights and “such a waiver cannot be presumed.” This is a big change in practical terms as it requires that employees who are union members must opt-in to having union fees deducted from their pay, instead of the previously acceptable opt-out option.

The loss of revenue from existing non-members and the potential loss of members who no longer want to pay is a huge blow to public-sector unions. By law, unions must provide fair representation to everyone in a bargaining unit, whether union members or not. Unions now will have to convince employees in their bargaining unit to pay union dues or agency fees voluntarily. The change is sure to affect the resources and viability of public-sector unions in this country.

Private Sector Unions Not Affected – Yet

Because free speech rights under the First Amendment exist to protect citizens from government actions, the Janus decision applies only to public-section unions and non-member employees. Unions representing employees in the private sector will not be subject to this ruling. That said, opponents of unions and mandatory agency fees will likely look for arguments to attack private sector unions in the future. The Court’s positions may be used to promote enactment of right-to-work laws in those states that do not currently have such laws.

December 14, 2017

NLRB Overturns Controversial Standards on Joint-Employer Status and Neutral Employment Policies; Questions Quickie Election Rule

By Steve Gutierrez

In a series of decisions that affect both union and non-union employers, the National Labor Relations Board (NLRB or Board) has overruled numerous controversial standards that had broadened the coverage of employee rights in recent years. On December 14, 2017, the Board returned the standard for determining joint-employer status to the pre-Browning-Ferris standard as well as walking back the standard for determining whether facially neutral employment policies infringe on employees’ section 7 right to engage in protected concerted activities. The return to more employer-friendly standards will help ease the risk of engaging in unfair labor practices under the National Labor Relations Act (NLRA). Here are the highlights of the new developments.

Joint-Employer Status Depends on Control

In its 2015 controversial decision in Browning-Ferris Industries, the NLRB significantly broadened the circumstances under which two entities could be deemed joint employers for NLRA purposes. In that case, the Board ruled 3-to-2 that Browning-Ferris Industries was a joint employer with a staffing company that provided workers to its facility for purposes of a union election because Browning-Ferris had indirect control and had reserved contractual authority over some essential terms and conditions of employment for the workers supplied by the staffing company.

Today, in a 3-2 decision, the now Republican-majority Board overruled Browning-Ferris, now requiring that two or more entities actually exercise control over essential employment terms of another entity’s employees and do so directly and immediately in a manner that is not limited and routine, in order to be deemed joint employers under the NLRA. This returns the joint-employer standard to the pre–Browning Ferris standard. Consequently, proof of indirect control, contractually-reserved control that has never been exercised, or control that is limited and routine, will no longer be sufficient to establish a joint-employer relationship.

This doesn’t mean that the Board will no longer find two or more entities to be joint employers under the NLRA. In fact, in the current case in which it overturned Browning-Ferris, it applied the tougher standard and still ruled that two construction companies were joint employers and therefore jointly and severally liable for the unlawful discharges of seven striking employees. Still, the requirement that entities have direct control that is exercised over the workers in question is a more workable and beneficial rule for employers.

New Standard For Facially Neutral Policies

In recent years, the NLRB has ruled that many types of standard employee policies unlawfully interfered with employees’ section 7 rights. That scrutiny went back to the 2004 decision in Lutheran Heritage Village-Livonia which ruled that employer policies that could be “reasonably construed” by an employee to prohibit or chill the employees’ exercise of section 7 rights violated the NLRA, even if such policies did not explicitly prohibit protected activities or were not applied by the employer to restrict such activities. Consequently, a series of Board rulings deemed certain language in employer policies unlawful even when facially neutral on their face, including policies on confidentiality, non-disparagement, recording and video at work, use of social media and company logos, and other typical employment rules.

In its recent decision, the Board ruled 3-to-2 to overturn Lutheran Heritage Village-Livonia and its standard governing facially neutral workplace rules. The new standard for evaluating employer policies will consider: (1) the nature and extent of the potential impact on NLRA rights, and (2) legitimate justifications associated with the rule. To provide greater clarity for employers, employees, and unions, the Board announced that prospectively, it will categorize workplace rules into three categories depending on whether the rule is deemed lawful, unlawful, or warrants individualized scrutiny. This change should significantly relieve the uncertainty that has existed under the “reasonably construed” standard.

Quickie Elections Being Reconsidered

In another move to reverse recent Board rules, the Board published a Request for Information (RFI) asking for public input on the 2014 representation election rule that changed the process and timing of union elections. In particular, the Board seeks public input on whether the 2014 quickie election rules should be retained, changed, or rescinded. The deadline for submitting responses is February 12, 2018. This RFI signals that the quickie election rule could be on its way out.

Conclusion

We will continue to monitor these and other Board developments. If you have any questions or concerns about these changes and how they may affect your workplace, you should reach out to your labor counsel.

October 12, 2017

Top Five Ongoing Challenges For Collective Bargaining and Organizing

By Steve Gutierrez

Most expect that the White House and federal agencies will take a more business-friendly approach than in recent years. Employers hope that will mean they can now look forward to a potential rollback of regulations and enforcement efforts that have stymied their business objectives. Yet when it comes to responding to union organizing campaigns and negotiating collective bargaining agreements, employers still face wide-ranging challenges. Here is my list of the top five ongoing challenges.

1. Affordable Care Act (ACA) Cadillac Tax

Many unions, such as the Teamsters, prioritize and bargain extensively over top quality, employer-paid health insurance. They often use it as a selling point to their members. Yet, the ACA’s 40 percent excise tax on workers with comprehensive insurance plans (the so-called “Cadillac tax”), set to be implemented in 2020, is seen by the unions as an affront to their hard-fought bargaining to obtain high quality health care for their membership.

In fact, reports show that unions, including the Teamsters, have actively lobbied members of Congress for a repeal of the Cadillac tax. Because health care reform has not yet passed, it may be unlikely that relief from the Cadillac tax is forthcoming anytime soon.

This opens the door for alternate bargaining tactics over health care plans and benefits. Economics can be based on the ultimate cost to the employees/members, when factoring in the tax. This issue remains a challenge for both employers and the union and can change the overall approach to structuring the economic package during contract negotiations.

2. Micro-units

In 2011, the NLRB issued its Specialty Healthcare decision permitting unions to establish bargaining units that include only a small fraction of a workforce. For example, in 2014, the Board certified a micro-unit of cosmetic and fragrance salespersons working at a Macy’s department store rather than requiring all employees at the store (or even all salespersons at the store) to make up the bargaining unit. The Board authorized the micro-unit by finding that the cosmetics and fragrances salespersons were a readily identifiable group and shared a community of interest. The Board also found that other Macy’s employees did not share an overwhelming community of interest with the cosmetics and fragrances employees, and prior NLRB cases involving the retail industry did not require a wall-to-wall unit.

These micro-units can make union organizing easier as they do not require a majority of the historical “wall-to-wall” bargaining units to vote in favor of the union. For example, a unit of only nine employees needs just five to vote “yes” and the union has its foot in the door with that employer. And organizing on that micro level can more easily go unnoticed by employers. Micro-units can also result in an employer having to negotiate with multiple unions affecting small segments of its workforce, and the headaches involved with administering varying contracts.

Numerous efforts are underway in the current administration to do away with micro-units. Current NLRB Chairman Phillip Miscimarra disagrees with the Specialty Healthcare standard for determining an appropriate bargaining unit, raising chances that the Board will abandon the approval of micro-bargaining units. However, Miscimarra has announced that he will leave the Board when his term expires in December 2017. Despite his impending departure, it is possible that a majority-Republican Board will reverse course on micro-units.

In addition, this past Spring, Senate Republicans introduced (again) the Representation Fairness Restoration Act (S. 801) which would do away with micro-units. That bill has been assigned to the Senate Health, Education, Labor, and Pensions committee where it is one of 250 bills currently being considered by the committee.

Until the law or Board precedent is changed, micro-units remain a challenge for employers. But because a more employer-friendly Board might rule against a micro-unit, it becomes vastly important to challenge proposed bargaining units and any potential outlier unit members. Increased pressure on the Board on this issue should be a continued focus.

3. Transparency with Employees/Members

Unions are becoming quite savvy in communicating with their members and potential members. Union leaders are increasingly focusing on being more transparent with their members during the bargaining process. They continue to build strong communications networks centered on social media and other online platforms, with development of mobile apps and company-specific websites, Facebook pages, and Twitter accounts.

To stay ahead of and counter union communications, employers facing a union organizing campaign or in the midst of negotiating a contract should institute and invest in more robust communication strategies with their employees as well. Social media and other online communications boards are essential in getting the company’s message out, especially to millennials and other employee demographics who will seek their information from such sources. But, be aware that in late 2014, the NLRB ruled that employees may presumptively use a company’s email system for statutorily protected communications as long as it takes place during nonworking time and does not interfere with productivity. That Board decision, Purple Communications, is on appeal in the Ninth Circuit Court of Appeals but remains a challenge for employers until such time it is reversed or overturned.

4. New Technology in the Workplace

As more technology comes into the workplace and robots threaten to replace workers, collective bargaining will likely face these issues head on. Just as outsourcing used to be (and in many cases, still is) a sore spot for unions, workplace automation is a similar threat to jobs and future expansion.

One example involves the Teamsters who recognize that autonomous driving vehicles are becoming a reality. The Teamsters are urging lawmakers to prioritize workers and safety when crafting legislation and rules regarding autonomous vehicles. Their concerns likely spill over into their contract negotiations as well.

As workplace technology accelerates, discussions of the use of such technology will likely become key in any bargaining where robots and automation are a possibility. Anticipating that topic, and the potential impact on workers, opens the door for employers to bargain for potential gains and/or trade-offs in their favor when the union opposes or seeks to limit autonomous technology.

5. Favorability of Unions on the Rise

According to a January 2017 Union Favorability Survey by the Pew Research Center (PRC), 60 percent of respondents viewed labor unions favorably while only 35 percent viewed unions unfavorably. This is the highest union favorability rating compiled by the PRC since March of 2001 and only the second rating at or above 60 percent since 1985.

Employers should be aware of this rising trend, especially when communicating with employees during an organizing or bargaining campaign. Opposing and criticizing unions too strongly could backfire so communications and strategies should be formulated to focus on issues, rather than the institution of unions and union membership itself.

Responding to organizing campaigns and preparing for collective bargaining is always a challenge but thinking ahead about these top five issues, and investing in some preventative training and education for managers, can help you manage the process and achieve a favorable outcome.

February 27, 2017

Union Organizing At Boeing, Yale University, and Elsewhere Show Need For Swift Response

By Steve Gutierrez

Union organizing campaigns have been in the news a great deal lately. Graduate students at Yale University voted this week in favor of unionizing. But Boeing workers at its South Carolina factory recently rejected representation by the International Association of Machinists, after a long and bitter organizing campaign. What makes the difference between a “yes” or “no” vote? The key lies in understanding current organizing tactics and preparing a timely, effective response.

Boeing Defeats Union Vote In South Carolina

According to news reports, 74 percent of over 2,800 workers at Boeing’s South Carolina factory voted against the union. The election was significant because it is believed that Boeing opened its Dreamliner assembly line in South Carolina at least in part to escape the strong union that represents Boeing’s workforce in its home state of Washington. South Carolina is one of the least unionized states in the country and Boeing mounted a strong opposition to the union campaign there.

Boeing’s South Carolina production and maintenance workers sought more consistent work instructions, fairer evaluations, and higher wages and benefits, according to news reports. In opposition, Boeing is described as emphasizing that the union had earlier opposed expansion of the South Carolina factory and that the union would only come between workers and management. Reports also describe a series of edgy opposition ads ran by a group closely tied to the South Carolina Manufacturers Alliance, to which Boeing belongs, including one that showed a machinist as a casino boss who pushed workers to gamble away their future. The strong opposition campaign appears to played a significant role in the rejection of the union in the recent vote.

Yale University Grad Assistants Favor Union

In 2016, the National Labor Relations Board ruled that graduate student employees, such as teaching and research assistants, on private campuses are entitled to form a union and collectively bargain. (See our post on that ruling here.) That ruling overturned long-standing Board precedent against treating graduate assistants as employees who are entitled to the rights and protections of the National Labor Relations Act. In the short time since last summer’s ruling, at least three campuses have seen graduate students form unions, with Yale University as the latest.

News reports cite numerous motivations behind the teaching assistant’s push for a union, including funding security, mental health care, affordable child care, and equitable pay. Yale, which had expressed its opposition to the 2016 NLRB ruling, warned graduate students that a union could alter their relationship with faculty members and limit their individual power as the union made decisions for everyone. The union’s margin of victory in this week’s election was reported to be slim.

Union organizers took a unique approach at Yale, seeking to have individual departments hold separate elections for their respective grad assistants. This tactic of using micro-units has proven successful in other organizing campaigns as the union need only convince a smaller number of employees in a particular department to vote “yes” rather than getting a majority of all employees holding the same position companywide to vote in favor of the union. In Yale’s case, the union Unite Here was successful in getting the graduate assistants in eight of nine departments to vote in favor of joining the union.

Understanding Union Organizing Tactics

The fast pace of union elections under the “quickie election” rules can significantly favor union organizers. As we’ve written in a prior post, the NLRB’s new election process, in effect since April 2015, accelerates the election process by shortening the time between a union’s filing of a representation petition and the holding of the vote. That time may be as short as two weeks, leaving management little time to ramp up an opposition campaign. Unions can seek to catch employers off guard or unprepared, using the quick election process to win elections without an organized response from management. Read more >>

November 16, 2016

Judge Declares Persuader Rule Unlawful With Permanent Nationwide Injunction

By Brian Mumaugh

The U.S. Department of Labor’s final persuader rule was dealt yet another blow today as federal Judge Sam Cummings of the Northern District of Texas issued a permanent injunction declaring the rule unlawful. The ruling will prevent the persuader rule from being enforced anywhere in the nation.

Rule Would Have Expanded Disclosures of Union-Avoidance Activities

As we’ve reported before, the DOL’s final persuader rule, issued this past March, would have expanded the reporting requirements of both employers and their hired labor consultants who assist with union-avoidance activities. Under the Labor-Management Reporting and Disclosure Act (LMRDA), when employers hire outside consultants, including attorneys, who are directly involved in “persuading” workers whether or not to join a union or engage in collective bargaining, they must file a report disclosing the consulting relationship as well as the fees paid to the consultant. Under the now-enjoined “new rule,” the DOL expanded the scope of reportable activities to include not only those that involved the consultant making direct contact with employees, as was previously included as reportable “advice,” but also those activities where the attorney or labor consultant works with the employer behind the scenes to draft or review documents, presentations, speeches, and other materials to aid the employer in opposing union organizing and other related activities.

Legal Challenge Prevailed

The DOL’s expansion of the rule as to what constitutes reportable “advice” was highly controversial. The DOL was set to begin enforcing the final rule on July 1, 2016, but numerous business groups filed lawsuits claiming that the DOL overstepped its bounds and that the rule was unlawful. On June 22nd, a Minnesota federal judge declined to issue a preliminary injunction to block the rule, but less than a week later, Judge Cummings in Texas did just that. He issued a preliminary injunction blocking the DOL from enforcing the rule nationwide.

With today’s order, Judge Cummings turned his preliminary injunction into a permanent block on enforcement of the rule. The result is that the employers and labor consultants, including lawyers, will continue to report their persuader activities consistent with the prior rule. In other words, only those activities that meet the “advice” standard under the prior persuader rule are reportable. Such activities generally include only those that involve direct contact between the consultant and the employees.

Is This Rule Dead Forever?

It remains to be seen whether the DOL will appeal this order, but for now, the final persuader rule appears dead. With the new GOP administration taking office in late January, it is unlikely that the DOL, under GOP leadership, would try to advance this union-friendly rule in the years to follow. We’ll keep you posted on any new developments.

August 24, 2016

NLRB Reverses Position on Grad Student Assistants, Allowing Them To Unionize

By Steven Gutierrez

Overruling its 2004 Brown University decision, the National Labor Relations Board (NLRB or Board) decided that graduate student assistants at private colleges and universities can be considered statutory employees under the National Labor Relations Act (NLRA), permitting them to organize and form a union. Columbia University, 364 NLRB 90 (August 23, 2016). The Board concluded that student assistants who perform paid work at the direction of their university have a common-law employment relationship with the university and therefore, are entitled to the protections of the NLRA.

Why Brown University Was Wrong

The 2004 Board that decided this issue in Brown University ruled that graduate assistants could not be statutory employees under the NLRA because they are primarily students and have a primarily educational relationship with the university, not an economic one. The current Board rejected that view, finding that because student assistants perform work, at the direction of the university, for which they are compensated, they are statutory employees and the fact that there may be another relationship not covered by the NLRA, namely an educational relationship, did not foreclose their coverage as employees.

The current Board also disagreed with the Brown University Board’s “fundamental belief that the imposition of collective bargaining on graduate students would improperly intrude into the educational process and would be inconsistent with the purposes and policies of the [NLRA].” Instead, this Board believes that allowing grad assistants to be covered employees meets the “unequivocal policy” of the NLRA to encourage the practice and procedure of collective bargaining, and will make sure that an entire category of workers are not deprived of the protections of the law.

Multiple Flip-Flops On Graduate Assistants

In overruling Brown University, the Board’s position returns to the position held in the 2000 New York University (NYU) ruling, which itself was overruled in Brown University. Prior to the NYU ruling, however, the Board had long held that various student assistants could not be included in petitioned-for bargaining units.

This new flip-flop on the issue of coverage for graduate student assistants is not surprising given the leanings and make-up of the majority of the current Board, which has favored the extension of coverage and its jurisdiction, when possible. Board member Philip Miscimarra dissented in this case, writing that he agreed with the Brown University reasoning that graduate student assistants have a predominately academic, rather than economic, relationship with their school. He would not have overruled Brown University, or permitted the petitioned-for bargaining unit to proceed. Read more >>

July 6, 2016

Union Remains Active In Health Care Industry Despite Withdrawing Initiative To Cap California Health Care Executive Salaries

By Steve Gutierrez

The Service Employees International Union (SEIU) – United Healthcare Workers West (UHW) has twice tried to get an initiative on the California ballot to cap the salaries of executives at nonprofit hospitals. The union recently withdrew its latest ballot initiative, ensuring that it will not appear on this November’s ballot.

SEIU Sought To Cap Private Executive Salaries

Called the “Charitable Hospital Executive Compensation Act of 2016,” SEIU’s initiative sought to limit the annual compensation packages paid to chief executive officers, executives, managers, and administrators of nonprofit hospitals and affiliated medical entities in California. The cap would be set at the annual salary of the U.S. President, currently $450,000. All executive compensation would be included in the cap, including salary, bonuses, stock options, paid time off, housing payments, loan forgiveness, and reimbursement for transportation, parking, entertainment or similar benefits. It would not include the cost of health or disability insurance or contributions to health reimbursement accounts.

The measure called for penalties for hospitals and covered physicians groups who violated the salary cap. Such penalties would include fines, revocation of tax-exempt status, and having an additional person sit on the nonprofit’s board of directors to represent the state Attorney General.

Protect Taxpayers or Organizing Tactic?

Filed in October of 2015, SEIU’s latest initiative stated that its purpose was to ensure that assets held for charitable purposes were not used to enrich executives, managers, and administrators of nonprofit hospitals. SEIU also stated that the total compensation packages for hospital executives should be reasonable and not excessive “in light of the substantial public benefit that the State tax exemption for nonprofit organizations conveys.” In essence, the union touted that taxpayers should not have to subsidize the multi-million dollar paychecks of administrators at tax-exempt healthcare entities.

In the past, the SEIU filed other California initiatives, including one to limit hospital prices and another to put more rules around charity care that could be provided by nonprofit hospitals. In exchange for the SEIU withdrawing those initiatives, the California Hospital Association (CHA) agreed to a contract with the SEIU in 2014 called the Code of Conduct which was intended to put obligations and restrictions on the conduct of each party. The Code expired by its terms on December 31, 2015, but not before the CHA filed a complaint against the SEIU alleging that its initiative to cap executive salaries violated the Code.

As revealed in the arbitration order, in which the arbitrator found that the SEIU did in fact violate the Code, the goals of the SEIU in pushing its healthcare industry initiatives were to increase its membership by reaching agreements with hospitals that provide them access to healthcare workers, and by working together with the hospitals to get Medi-Cal fully funded, which would support more jobs for union members. The initiatives therefore appear to be intended to pressure the hospitals into helping the SEIU organize workers and expand its membership.

Even though this specific salary cap initiative has been withdrawn, we can expect that the SEIU-UHW will continue its pressure tactics in organizing workers in the healthcare industry.

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January 12, 2016

Anticipating Revisions To The “Persuader Rules” – What You Need To Know

By Brian Mumaugh

As early as March, the U.S. Department of Labor (DOL) plans to issue its final rules that will significantly narrow the type of union-avoidance activities that employers and their labor attorneys and relations consultants may engage in without having to report those activities to the government. The tightening of the so-call “persuader rules” will mean that employers who utilize labor relations consultants, including lawyers, to help with union-avoidance or collective bargaining activities will need to disclose many more of those activities, and the fees paid for them.

Evolution of the “Persuader Rules”

In the late 1950’s, because of perceived questionable conduct by both unions and employers involved in union organizing and collective bargaining campaigns, Congress enacted the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA). The LMRDA seeks to make labor-management relations more transparent by imposing reporting and disclosure requirements on labor organizations and their officials, employers, and labor relations consultants.

Under the LMRDA, the reporting requirements for employers and their labor consultants are triggered when they undertake activities intended to directly or indirectly persuade employees to exercise (or not to exercise) the employees’ right to organize and bargain collectively through representatives of their own choosing. Employers must file a Form LM-10 (Employer Report) that discloses all payments made to unions and union officials, persuader payments made to employees and employee committees, persuader agreements/arrangements made with labor relations consultants, including lawyers, which includes the amount and dates of payments made to such consultants, and any expenditures made to interfere with, restrain or coerce employees, or otherwise obtain information concerning employees or a labor organization. Labor relations consultants must file a Form LM-20 specifying, among other things, information about the consultant and the nature of the “persuader activities” to be performed. Under the LMRDA, the DOL must make all such forms available for public inspection.

The “Advice” Exemption

The LMRDA contains an exemption from the reporting requirements for persuader activities for services that give “advice” to the employer. Except for brief periods when the LMRDA was first enacted and again in 2001, the DOL has interpreted this “advice” exemption to apply to activities where a consultant or lawyer prepares a speech or documents for use by the employer, or revises materials initially drafted by the employer. In other words, as long as the consultant or lawyer did not directly deliver or disseminate speeches or materials to employees for the purpose of persuading them with respect to their organizational or bargaining rights, behind-the-scenes activities where the consultant/lawyer drafts materials for use by the employer would not trigger a reporting obligation. Under the proposed rules, that is about to change.

Expanded Proposed Interpretation of “Advice” Exemption

Believing its long-standing interpretation of the “advice” exemption to be overly broad, the DOL proposed a narrower interpretation that would require reporting in any case in which the agreement or arrangement with a labor consultant/lawyer in any way calls for the consultant to engage in persuader activities, regardless of whether or not advice is also given. The revised interpretation would define reportable “persuader activity” to include activities where a lawyer or consultant provides material or communications to, or engages in other actions, conduct, or communications on behalf of an employer that at least in part, has the objective of persuading employees concerning their rights to organize or bargain collectively. Exempt “advice” would be limited to recommendations, verbal or written, regarding an employer’s decision or course of conduct.

Stated examples of covered persuader activities that would require disclosure include:

drafting, revising, or providing written materials for presentation, dissemination, or distribution to employees
drafting, revising, or providing a speech, video, or multi-media presentation to be presented, shown or distributed to employees
drafting, revising, or providing website content for employees
planning or conducting individual or group employee meetings, and training supervisors or employer representatives to do the same
coordinating or directing the activities of supervisors or employer representatives
establishing or facilitating employee committees
developing personnel policies or practices
deciding which employees to target for persuader activity or disciplinary action
conducting a seminar for supervisors or employer representatives

The DOL justifies this expansion of the reporting circumstances, in part, because the role of outside consultants and law firms in managing employers’ anti-union efforts has grown substantially over the years, citing reports that somewhere between 71% and 87% of employers facing organizing drives hire third-party consultants to assist in their counter-organizing efforts. The DOL also states that underreporting of persuader activities is a problem as “employees are not receiving the information that Congress intended they receive.” Regardless of its reasoning, the DOL’s proposed change of its 50-year old interpretation will result in significant burdens on both employers and their consultants.

March 2016 Is New Target Date for Final Rule

Almost five years has passed since the DOL published its proposed rule changing the “persuader rules.” After numerous delays in publishing its final rules, the DOL’s regulatory agenda indicates that it expects to issue the final “persuader rules” this March. We will let you know when the final rules are published, or if the timeline changes. In the meantime, you might want to take advantage of the next few months before the new rules kick in to obtain union-avoidance materials and training from your consultants now. At a minimum, talk to your labor relations consultant/labor lawyer about the upcoming changes so that you are aware of how they may impact your labor strategies in the future.

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