Category: Labor & Employment

Employee’s Disparaging and Misleading Tweets May Be Protected Under NLRA: Holy Guacamole!

Guacamole, Food, disparaging social mediaRetail employers dismayed by employees publicly airing workplace grievances in disparaging social media posts must think twice before taking disciplinary action.  On August 18, 2016, the National Labor Relations Board (“NLRB”) confirmed the finding by Administrative Law Judge Susan A. Flynn that Chipotle’s social media policy forbidding employees from posting “incomplete” or “inaccurate” information, or from making “disparaging, false, or misleading statements” on Twitter, Facebook and other social media sites violates Section 8(a)(1) of the National Relations Labor Act (“the Act”).

Chipotle discovered that an employee responded to a customer’s tweet thanking Chipotle for a free food offer, by tweeting back: “@ChipotleTweets, nothing is free, only cheap #labor. Crew members make only $8.50hr how much is that steak bowl really?”  Then, attaching a news article describing how hourly workers at Chipotle were required to work on snow days while certain high-level employees were not, the employee tweeted his displeasure, specifically referencing Chipotle’s Communications Director: “Snow day for ‘top performers’ Chris Arnold?”  Informed by his manager that Chipotle considered his tweets to be in violation of Chipotle’s social media policy, the employee removed them at Chipotle’s request.  Then, several weeks later, Chipotle fired the employee after he circulated a petition about employees not receiving required breaks.

Finding the provision in Chipotle’s policy prohibiting employees from spreading “incomplete” or “inaccurate” information to be unlawful, Judge Flynn opined that: “An employer may not prohibit employee postings that are merely false or misleading. Rather, in order to lose the [NLRA]’s protection, more than a false or misleading statement by the employee is required; it must be shown that the employee had a malicious motive.” Judge Flynn also found the policy provision prohibiting “disparaging” statements to be unlawful, explaining that it “could easily encompass statements protected by Section 7 [of the NLRA]” including “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”   Although Chipotle’s social media policy contained a disclaimer that the policy “does not restrict any activity that is protected by the National Relations Labor Act, whistleblower laws, or any other privacy rights,” Judge Flynn concluded that this “sentence does not serve to cure the unlawfulness of the foregoing provisions.”

The NLRB adopted Judge Flynn’s decision that Chipotle was wrong, not only for firing the employee, but for attempting to limit his commentary on social media by its unlawfully termed social media policy.  While agreeing with Judge Flynn’s reasons for finding the social media policy unlawful, the NLRB disagreed with Judge Flynn’s finding that Chipotle violated the NLRA by asking the employee to delete the tweets.  In particular, while Judge Flynn opined that the employee engaged in “concerted activity” even though he did not consult with other employees before posting his tweets because “concerted activities include individual activity where individual employees seek to initiate or to induce … group action,”  the NLRB disagreed, asserting, with no true explanation, that it did not find the employee’s conduct to be concerted.  Agreeing that Chipotle violated the NLRA by terminating the employee after he engaged in protected concerted activity by circulating a petition regarding the Company’s break policy, the NLRB required Chipotle to, among other things, post signs acknowledging that its social media policy was illegal, and to re-instate the employee with back pay.

The message from the NLRB to retail employers is that, barring malicious misstatements, speech concerning terms and conditions of employment is often protected activity, even for employees who want to criticize their employers on Twitter and other social media websites.  To avoid Chipotle’s fate, ensure that your social media policies are up to date and provide for the increasing protections afforded to employee social media activity by the NLRB.

ARTICLE BY John M. O’Connor of Epstein Becker & Green, P.C.
©2016 Epstein Becker & Green, P.C. All rights reserved.

Fair Pay and Safe Workplaces Final Rule Presents Challenges to Government Contractors

fair payLast week, the FAR Council released its Final Rule implementing President Obama’s 2014 Fair Pay and Safe Workplaces Executive Order. At the same time, the U.S. Department of Labor released its Final Guidance on the rule. Contractors need to take action immediately—the Final Rule goes into effect on October 25, 2016.

The proposed rule was issued back in May of 2015 and there has been lots written about it (and more than 10,000 comments and responses submitted). In today’s post, we highlight some of the requirements that may present challenges to contractors. Remember, once the rule takes effect, contractors will be required to report certain details about their labor law violations.

Public Disclosure of Labor Law Violations

Actually, contractors will be required to disclose violations of 14 federal labor laws and executive orders and state equivalents. Those laws range from the Fair Labor Standards Act and the Occupational Safety and Health Act to the Service Contract Act, the Davis Bacon Act and the Family and Medical Leave Act. The E.O.s include E.O. 13658 (Establishing a Minimum Wage for Contractors) and E.O. 1124 (Equal Employment Opportunity). The Final Rule also requires contractors to update their reports every six months. And, all disclosures under the new rule will be public.

Phase-In Periods

That’s probably one of the main takeaways here—the rule will be “phased in” over time. Starting on October 25, 2016, the disclosure requirements will become effective as to prime contracts valued at $50 million or more. By April 25, 2017, those requirements will apply to prime contracts valued at $500,000 or more. Subcontracts are not covered by the rule until October 25, 2017. Initially, the disclosure rules only will look back one year, but that “look back” period will stretch to three years by October 25, 2018.

Paycheck Transparency and Arbitration Restrictions

Starting on January 1, 2017, the “paycheck transparency” provisions take effect. Among other things, starting in 2017, contractors will be required to provide notices to workers about their status as independent contractors and whether they are exempt from overtime pay. Those notices will be particularly problematic for contractors who have not previously focused on proper classification and for all contractors in light of new overtime regulations and DOL’s increased attention to alleged worker misclassifications.

Subcontractor Reporting Directly to DOL

The Final Rule includes one significant change from the proposed rule and requires subcontractors to report directly to the Department of Labor rather than to the prime contractor. The rule also includes a contorted pathway for consideration of subcontractors’ disclosed violations, bouncing from DOL back to the sub and then up to the prime and then to the contracting officer. It remains to be seen how that process will work and if it will work efficiently.

Reporting Does Not Extend to Affiliates

The text of the Final Rule makes it clear that the reporting requirements do not extend to corporate parents, subsidiaries or affiliated companies. Instead, it is limited to the contracting party only.

Perhaps it is a silver lining for prime contractors that they will not be required to report on their subcontractors’ and their own affiliates’ labor law violations. But the new rules contain many new requirements and contractors should get ready now for the implementation to begin on October 25, 2016.

EEOC Transgender Case, New York City Labor Peace Agreements, Parental Leave: Employment Law This Week – August 29, 2016 [VIDEO]

EEOC Transgender CaseEEOC Loses Transgender Case in Michigan

Our top story: An employer wins a landmark case after firing a transgender employee. A funeral home in Michigan decided to terminate its director after he notified the business that he would be transitioning from male to female. The U.S. Equal Employment Opportunity Commission (EEOC) filed suit. On a motion to dismiss, a U.S. district court held that Title VII does not prohibit discrimination on the basis of transgender status or gender identity but allowed the EEOC to pursue a claim for sex stereotyping. The funeral home argued that it was protected under the Religious Freedom Restoration Act (RFRA), and the district court agreed, granting the employer’s motion for summary judgment.

“Once the employer is able to prove that they are entitled to a defense under the RFRA, the EEOC has a burden of not just establishing that the purpose of Title VII is a compelling government interest, but it also has to show that the means and application of Title VII was done in the least burdensome way possible. The EEOC failed to address this point in their briefing, and also failed to examine whether this was the least restrictive, or whether there was an alternative, way to enforce Title VII against this employer. . . . In order to be eligible to invoke the RFRA, an employer has to be a private, closely held corporation and cannot be a publicly traded corporation. Secondly, the RFRA can only be invoked if the party suing the employer is the government or a government agency. And third, if the employer is a government itself, they can’t invoke that they have a religion, and therefore the RFRA is not applicable.”

New York City Mandates “Labor Peace” Agreements

New York City is trying to force certain employers to sign “labor peace” agreements with unions. Mayor Bill de Blasio has signed an executive order mandating that a property developer receiving at least $1 million in “Financial Assistance” require its large retail and food service tenants to accept “Labor Peace Agreements.” These agreements would prohibit the companies from opposing union organization and provide what some consider to be affirmative support and assistance to unions. City Development Projects that were authorized or received “Financial Assistance” before July 14, 2016, are exempt from this order.

Lawmakers Urge Rejection of EEOC’s Pay Data Proposal

Senators ask for a halt to the EEOC’s pay data proposal. Three Republican senators have sent a letter to the Office of Management and Budget asking them to shut down a recent proposal from the EEOC. The proposal would expand pay data collection and require employers to categorize hours worked by sex, ethnicity, and race. The lawmakers argue that this kind of data collection would waste time and put significant new burdens on employers.

Parental Leave Requests Increase as School Year Starts

Parental leave requests are on the rise as kids head back to school. An increasing number of states now require that businesses grant unpaid leave to employees for school-related events and activities that happen during the workday. These laws apply to private employers in Washington, D.C., and in such states as California and Massachusetts. As the school year begins, employers will likely see more requests for parental leave and should consider checking the laws in their states to make sure they’re in compliance.

Tip of the Week

Finally, it’s time for our Tip of the Week. Ann Morris, Partner at Finn Partners, is here with some advice on developing a communications plan before a crisis.

ARTICLE BY George Carroll Whipple, III of Epstein Becker & Green, P.C.

©2016 Epstein Becker & Green, P.C. All rights reserved.

Key Recent Decisions in Employer Stock Plan Litigation

employee stockEach year, the National Center for Employee Ownership updates its employer stock litigation review (the ESOP and 401(k) Plan Employer Stock Litigation Review 1990–2016). Over the last 12 months, there has been a significant decline in litigation on this front, with only 21 new cases reaching the court, by far the fewest in recent years.  Seventeen dealt specifically with Employee Stock Ownership Plans, but only a few provided significant new guidance. Most dealt with legally non-controversial issues, such as distributions errors, attempts to set up ESOPs in companies with just one or two participants, and other administrative matters.

There were, however, some important decisions.

Standards of Review under the Dudenhoeffer Doctrine

The most important developments were in how the Supreme Court’s rulings on the Fifth Third v. Dudenhoeffer (Np. 12-751, U.S., June 25, 2014) would affect litigation. In that case, the Court dismissed the presumption of prudence for investing in employer stock that had long been the standard with a new pleading standard that required plaintiffs to plead a plausible alternative course of action for trustees that would not end up hurting more than helping. The standard clearly was designed with public companies in mind, but in two cases, it was applied by the courts to private companies, albeit in a very limited way. In public companies where prior decisions under the prudence presumption were remanded, the new standards have proven challenging for plaintiffs.

A number of cases were remanded after the ruling. In Tatum v. R.J. Reynolds Tobacco Co., No. 1:02-cv-00373-NCT-LPA (M.D.N.C, Feb. 18, 2016), a district court ruled for R.J. Reynolds, saying the fiduciary actions were reasonable under any standard of review. Similarly, in In re Lehman Bros. Sec. & ERISA Litig., No. 1:08-cv-05598-LAK (S.D.N.Y., July 10, 2015), the court ruled against the plaintiffs, this time saying they had failed to meet the heightened pleading standards that the Dudenhoeffer ruling set out. In Pfiel v. State Street Bank and Trust, No. 14-1491 (6th Cir., Nov. 10, 2015), the Sixth Circuit dismissed a claim by plaintiffs from GM arguing that GM stock should not have been an option in the company’s 401(k) plan, saying the efficient market theory provided that trustees could not be expected to outguess the market as to whether a particular stock is overpriced at any time. The Supreme Court declined to review the case in Pfiel. State Street Bank & Tr. Co., No. 15-1199 (U.S., cert. denied, June 27, 2016). The same logic was used to rule for the defendants in Coburn v. Evercore Tr. Co., N.A., No. 1:15-cv-00049-RBW (D.D.C., Feb. 17, 2016), with the court  specifically rejecting the argument that a fiduciary should have known from publicly available information alone that a stock’s price was “over or underpriced.”

Amgen Inc. et al. v. Steve Harris (U.S. no. 577, Jan. 25, 2016) presented a more complex scenario. The Supreme Court for the second time reversed the Ninth Circuit’s decision on the prudence of continuing to hold employer stock in Amgen’s 401(k) plan. The Ninth Circuit on remand said that the fiduciaries should have removed Amgen stock, which would have the same effect on the market as disclosure of the potentially adverse information. The Supreme Court ruled that a plausible argument could be made along these lines, but “the facts and allegations supporting that proposition should appear in the stockholders’ complaint. Having examined the complaint, the Court has not found sufficient facts and allegations to state a claim for breach of the duty of prudence.” The Supreme Court said that the complaint needs to claim an alternative action that “a prudent fiduciary in the same circumstances would not have viewed as more likely to harm the fund than to help it.” The district court can now decide it if wants to allow the stockholders to amend their complaint.

The Dudenhoeffer ruling was also extended to private companies in two cases, also with unfavorable results for plaiintiffs. In Allen v. GreatBanc Trust Co., No. 1:15-cv-03053 (N.D., Ill., October 1, 2015), the court dismissed a lawsuit against GreatBanc Trust in its role as a fiduciary in an ESOP transaction at Personal-Touch Home Care in a valuation case. The Court referred to the Dudenhoeffer Supreme Court case in ruling that “absent an allegation of special circumstances regarding, for example, a specific risk a fiduciary failed to properly assess, any fiduciary would be liable for at least discovery costs when the value of an asset declines. Such a circumstance cannot be the intention of Rule 8(a), or Dudenhoeffer. An allegation of a special circumstance is missing in this case—in fact, we know absolutely nothing about the financial situation of Personal-Touch.”

In Hill v. Hill Brothers Construction Co., No. 314-CV-213SAA (N.D. Miss., Sept. 11, 2015), a district court dismissed the plaintiff’s claims of a breach of fiduciary duty by the plan’s trustees, holding that plaintiffs had not shown that, under Dudenhoeffer there was an alternative action that “a prudent fiduciary in the same circumstances would not have viewed as more likely to harm the [plan] than to help it.” The court noted that although Dudenhoeffer applied mostly to public companies, “that does not necessarily preclude the application of the alternative action pleading standard to closely-held entities.”

Disclosure

Two cases came to different conclusions about financial disclosure requirements. Murray v. Invacare Corp., No. 1:13-cv-01882-DCN (N.D. Ohio, 8/28/15  found that there was a duty to disclose, but In re BP P.L.C. Sec. Litig., No. 4:10-MD-2185 (S.D.-Tex, Oct. 30, 2015) found there was not.

Other Decisions of Interest

 In Harper v. Conco ESOP Trs., No. 3:16-CV-00125-JHM (W.D. Ky., July 7, 2016), a district court ruled that employees of the bankrupt company Conco could not sell their stock for at least three years. The court affirmed a bankruptcy court’s ruling that was meant to give the company an opportunity to reorganize.

In Chesemore v. Fenkell, No. 14-3181, 14-3215, 15-3740, (7th Cir., July 7, 2016), the Seventh Circuit ruled that Alliance Holdings’ CEO David Fenkell had to indemnify the trustees of Trachte Building Systems. Trachte’s ESOP trustees, the courts argued, were controlled by Fenkell, thus making him a cofiduciary. The decision is at odds with rules for cofiduciary liability with the Eighth and Ninth Circuits.

In Perez v. Mueller, No. 13-C-1302, (E.D. Wis., May 27, 2016), a district court ruled that the Department of Labor could not make a blanket claim of privilege to prevent discovery of individual documents in an ESOP valuation case.

Finally, in Precise Systems Inc. v. U.S., No. 14-1147C (U.S. Court of Federal Claims, July 28, 2015), the court ruled that Precise Systems Inc. did not qualify for a service-disabled veteran-owned small business set-aside program. The company issued two “series” of common stock (A and B). Each share had one vote. A qualifying individual owned over 51% of the total voting shares. The ESOP shares, however, had an additional right pertaining to voting on a dividend and had a dividend preference. The company argued that they were the same class of shares, but the court agreed with the SBA and Office of Hearings Appeals rulings that they were two classes and, therefore, Precise Systems did not qualify.

ARTICLE BY Corey Rosen of The National Center for Employee Ownership              
 © 2016 by NCEO

FAR Council Issues Final Rule, DOL Issues Final Guidance on Fair Pay and Safe Workplaces (“Blacklisting”) Executive Order, Effective October 25, 2016

fair pay and safe workplacesYesterday, the Federal Acquisition Regulations Council (“FAR Council”) and the U.S. Department of Labor (“DOL”) issued its Final Rule and Guidance implementing the Fair Pay and Safe Workplaces Executive Order (the “Order”), commonly referred to as the “blacklisting” rule.  In total, the Final Rule, Guidance, and accompanying commentary totaled nearly 900 pages, responding to nearly 20,000 comments on the Proposed Rule and Guidance released earlier this year.  Some of our previous posts on the Order and the Proposed Rule and Guidance can be found here and here.  This post will highlight the notable changes and clarifications made in the Final Rule and Guidance as well as key takeaways for federal government contractors.

Effective Date

The Final Rule is effective on October 25, 2016.  This is earlier than anticipated and dramatically shortens the time for contractors to prepare to comply with the Order and its implementing regulations.  That being said, as discussed below, the Final Rule also phases in a number of the disclosure and compliance obligations, lessening the initial burden of the implementation.

Phase-In of Labor Violation Disclosure Requirements

One of the overarching concerns raised during the notice and comment period was the enormous burden the Order would place on the contracting community.  In an effort to lessen that burden, the Final Rule and Guidance announced a phased implementation of the disclosure obligations.  The phase-in has two key components.

First, the Order and the Proposed Rule contain a three-year look back for covered violations.  Recognizing that contractors have not been cataloging covered labor violations prior to the issuance of the Order, the Final Rule only requires contractors to look back one year for reportable violations when the rule becomes effective.  The look-back period will increase each year by one year until October 2018, when it will become a three-year look back.

Second, the Final Rule also limits which contractors must make labor law violation disclosures in the first six months following the effective date.  Contractors will not be required to disclose labor law violations until April 24, 2017, unless the contractor is responding to a solicitation for a contract valued at $50 million or more after the effective date of the Final Rule.  For most contractors, this provides an additional six-month window to prepare for the implementation of the disclosure obligations.

The phase-in of disclosure obligations does not just impact prime contractors.  The Final Rule also included a lengthier phase-in for subcontractor disclosure obligations.  Subcontractors must begin disclosing labor violations for solicitations issued after October 25, 2017, one year after the effective date.

A Pause on The Disclosure of “State Law Equivalent” Violations

When the Proposed Rule was released, the Proposed Guidance stated that a supplement would follow containing a list of which state-law equivalents for the 14 enumerated federal laws require disclosures of violations under the Order.  To date, no list has been released.  The Final Rule and Guidance acknowledge this and state that the DOL will release a comprehensive list of state laws that are covered by the Order.  This listing will be subject to notice and comment before it becomes effective.  In the meantime, only the 14 federal labor laws listed in the Proposed Rule and in the Order, along with state OSHA plans, are covered by the rule.

Minor Clarifications on Scope of Violations

Overall, despite numerous comments and criticisms, the DOL declined to substantively modify its list of covered labor violations in the Final Guidance.  Thus, the list of administrative merits determinations, arbitral awards, and civil judgments remain exceptionally broad and sweeping.

Although the DOL declined to narrow its definition of a violation, the Final Guidance does contain some minor modifications that broaden the definition of a violation.  For example, the definition of administrative merits determination in the Proposed Guidance did not include violations of the anti-retaliation provisions of the Occupational Safety and Health Act (“OSHA”) or the Fair Labor Standards Act (“FLSA”).  The final rule clarifies that these were unintentionally omitted from the Proposed Guidance and are now included in the Final Guidance.  Additionally, the Proposed Guidance limited “determination letters” from the DOL Wage and Hour Division to letters outlining violations of Sections 6 and 7 of the FLSA (minimum wage and overtime).  In the Final Guidance, the DOL has clarified that this was unintentionally narrow, and that the Final Guidance includes determination letters finding any FLSA violation.

Assessing A Subcontractor’s Responsibility – Removing The Burden From The Prime

One highly controversial aspect of the Proposed Rule was the burden placed on the prime contractor to perform the same type of responsibility determination of covered subcontractors’ labor violations that the government will perform on prime contractors.  In response to numerous comments, the Final Rule has modified the process for assessing a subcontractor’s violations, largely removing the burden from the prime contractor.

Instead, starting October 25, 2017, under the Final Rule, covered subcontractors will submit their list of labor violations to the Agency Labor Compliance Advisor (“ALCA”).  The ALCA will then perform an assessment of the disclosed violations and make a recommendation.  The prime contractor must make the ultimate decision as to responsibility.  If the subcontractor disagrees with the finding of the ALCA, it can raise the dispute with the prime contractor.

Clarification of Assessment Process of The Labor Compliance Advisors

The Proposed Rule and Guidance introduced a new government official into the contracting process, the ALCA.  There was substantial controversy surrounding this new role, particularly the potential disparate application of the Order between agencies and perhaps even within agencies.  The Final Rule and Guidance provides additional details regarding the process by which federal agencies and departments will assess a contractor’s labor violations.  Moreover, the Final Rule and Guidance recognizes the need for guidelines and training for the ALCAs.

The Final Rule and Guidance states that the ALCA will have three days to assess labor violations disclosed by a contractor.  Although the contracting officer is permitted to give the ALCA additional time, the contracting officer may make his or her own assessment of responsibility without the recommendation of the ALCA.  The ultimate responsibility for making a responsibility determination will remain with the contracting officer, not the ALCA.  The ALCA’s role is to “assesses the nature of the violations and provide[] analysis and advice.”

The Final Guidance also clarifies the process the ALCA will follow during his or her assessment.  The ALCA will first review all of the violations to determine if any are “serious, repeated, willful, and/or pervasive.”  Then, the ALCA “weighs any serious, repeated, willful, and/or pervasive violations in light of the totality of the circumstances, including the severity of the violation(s), the size of the contractor, and any mitigating factors that are present.”  Finally, the ALCA provides written analysis to the contracting officer.

Public Dissemination of Disclosures

The Proposed Rule and Guidance noted that information submitted to the contracting agency would be publicly disseminated.  Despite numerous comments criticizing this proposed provision, the Final Rule and Guidance declined to remove this requirement.  However, the Final Rule and Guidance provided clarification as to how this public dissemination will work in practice.  Pursuant to the Final Rule, the following information will be publicly disclosed based upon the contractor’s violation submissions:  (1) the law violated; (2) the case identification number or docket number; (3) the date of the decision finding a violation; and (4) the name of the body issuing the judgment.

The contractor will input this information into the System for Award Management (“SAM”).  From SAM, the information will be made available to the public through the Federal Awardee Performance and Integrity Information System (“FAPIIS”).  The Final Rule clarified that while the four enumerated data points must be made public, the contractor has the choice as to whether any additional documents provided by the contractor to demonstrate its responsibility and mitigation efforts shall be made public.

Key Takeaways

With the Final Rules and Guidance published, it is more important than ever that contractors begin preparing for the implementation of the Order and its regulations.  Contractors have two months before the effective date of the Final Rule, and while certain obligations will be phased-in, contractors will need time to prepare for compliance.

Contractors should start cataloging any violations during the past six months that constitute covered violations as well as any evidence of mitigation efforts taken as a consequence of the violations.  Because complaints and charges alleging violations of the 14 federal laws covered by the Order, a central official of office should be designated to coordinate the collection of this information (concerning both past and future violations) and a central repository for it.  Contractors should view the ability quickly to provide a comprehensive list to the contracting officer as a competitive advantage, as competitors may not be prepared to do so in a timely manner.

Additionally, if the ALCA makes an inquiry concerning the disclosed violations, contractors should be prepared to advocate, with appropriate evidence, why certain violations are not willful, repeated, pervasive or severe.  For instance, the contractor could point to its size or the number of employees in the organization.  It can also identify measures taken by the contractor to address the issues raised in the violation.  It will be important that these disclosures be vetted by a central authority within the organization.

In addition to preparing to report labor violations, contractors should also work internally to reduce and mitigate the risk of future violations.  This can be achieved by: (1) developing and implementing effective policies and training; (2) auditing compliance; (3) adopting a robust internal complaint mechanism; (4) developing alternative dispute resolution processes; and (5) undertaking early case assessment and management. Taking these proactive measures can help lessen the impact of future compliance by reducing the number of violations that must be reported.

NLRB Excludes Theology Teachers from Bargaining Unit at Catholic Universities

theology NLRBWhile the National Labor Relations Board’s (NLRB) decision this week in the teaching assistants’ case caught most of the headlines, the very same day the Board also issued two important rulings defining appropriate bargaining units at Catholic universities.

In cases arising at Seattle University (a Catholic university operated by the Jesuit order) and Saint Xavier University (a Chicago-area Catholic university founded by the Sisters of Mercy), the Board determined that faculty teaching theology and religion were exempt from the coverage of the National Labor Relations Act (NLRA) and therefore must be excluded from the petitioned-for bargaining units.

At Seattle University, the Service Employees International Union, Local 925, sought to represent a bargaining unit comprised of all non-tenure eligible faculty at the university other than those teaching nursing and law. At Saint Xavier, the Illinois Education Association (IEA-NEA)  petitioned to represent all part-time faculty at the university other than those teaching at the School of Nursing.

In reaching its decision, the Board retraced its torturous reasoning in Pacific Lutheran University, 361 NLRB 157 (2014), in which it sought to avoid the U.S. Supreme Court’s ruling in NLRB v. Catholic Bishop of Chicago, 440 U.S. 490 (1979). In that case, the Supreme Court instructed that the NLRA must be construed to exclude teachers in church-operated schools because to do otherwise “will necessarily involve inquiry into the good faith of the position asserted by the clergy-administrators and its relationship to the school’s religious mission.” The court concluded that the Board’s assertion of jurisdiction over teachers in church-operated schools would give “rise to entangling church-state relationships of the kind the Religion Clauses sought to avoid.”  For the Board to engage in such inquiry would violate the First Amendment.

In Pacific Lutheran, the Board purports to follow the teaching of Catholic Bishop but instead formulates the following seemingly non-compliant test: “[T]he Act permits jurisdiction over a unit of faculty members at an institution of higher learning unless the university or college demonstrates, as a threshold matter, that it holds itself out as providing a religious educational environment, and that it holds out the petitioned-for faculty members as performing a specific role in creating or maintaining the school’s religious educational environment.”

In both the Seattle and Saint Xavier cases, the Board agreed that both universities identify themselves as “providing a religious educational environment,” thus meeting the first part of the two-part test. However, in both cases, the Board concluded that only the faculty in Seattle’s Department of Theology and Religious Studies and School of Theology and Ministry and Saint Xavier’s Department of Theology met the second part of the test. Therefore, those individuals could not be part of the bargaining unit.

In his dissents in each case, NLRB Board Member Phillip A. Miscimarra lays bare the clear conflict between the Pacific Lutheran decision and the Supreme Court’s decision in Catholic Bishop. “My colleagues and I are not permitted to write from a clean slate regarding this issue. It is governed by NLRB v. Catholic Bishop of Chicago, where the Supreme Court rejected the Board’s assertion of jurisdiction over ‘lay teachers’ at church-operated schools, which the Board had attempted to justify on the basis that the schools were ‘religiously associated’ rather than ‘completely religious.’” The Supreme Court held that the Board could not exercise jurisdiction over teachers in church-operated schools based on “abundant evidence” that doing so “would implicate the guarantees of the Religion Clauses.”

And as Miscimarra points out in dissent, the decision reached by the Board in these two current cases actually proves his point. “In other words, my colleagues draw the precise distinction—between faculty members who teach  ‘religious’ subjects, on the one hand, and those who teach ‘secular’ subjects, on the other—that the Supreme Court rejected as entailing the type of ‘inquiry’ that, by itself, may impermissibly impinge on rights guaranteed by the Religion Clauses.” That impingement necessarily results, Miscimarra writes because “[l]engthy reflection is not needed to recognize that it will often be impossible to determine whether faculty members at religiously affiliated schools who ostensibly teach ‘secular’ subjects nonetheless perform a ‘specific role in creating or maintaining the school’s religious educational environment.’”

One would expect that both of these cases will be appealed, particularly because, as Miscimarra points out, the D.C. Circuit Court of Appeals reads Catholic Bishop in an entirely different fashion than does the Board.  In University of Great Falls v. NLRB, 278 F.2d 1335 (D.C. Cir 2002), that court articulated a three-part test under Catholic Bishop. Under its test, the Board has “no jurisdiction over faculty members at a school that (1) holds itself out to students, faculty and community as providing a religious educational environment; (2) is organized as a nonprofit; and (3) is affiliated with or owned, operated, or controlled, directly or indirectly, by a recognized religious organization, or with an entity, membership of which is determined, at least in part, with reference to religion.”

Copies of the Seattle Board Decision and Saint Xavier Board Decision decisions are available here.

ARTICLE BY Gerald F. Lutkus of Barnes & Thornburg LLP
© 2016 BARNES & THORNBURG LLP

Fair Pay and Safe Workplaces Final Rule Released

Fair pay safe workplaces DOLThe Department of Labor and FAR Council have released, for publication tomorrow, final guidance and regulations implementing Executive Order 13673: Fair Pay & Safe Workplaces (also colloquially referred to as the Blacklisting Executive Order.)

We are in the process of digesting the almost 1000 pages of regulations, as well as an amendment to the Executive Order itself, and will be back with an in-depth analysis and our insights soon, so stay tuned.

ARTICLE BY Laura A. Mitchell of Jackson Lewis P.C.

Jackson Lewis P.C. © 2016

Three Employee-Friendly Bills That May Be Affected By Upcoming Elections

employee-friendly billsIn the past few years, Democratic members of Congress have introduced several decidedly pro-employee bills, none of which have yet passed, but which may be impacted by the elections in November. Such bills were first introduced in the 113th Congress when Republicans controlled the House of Representatives and Democrats controlled the Senate. Versions of these bills were reintroduced in the 114th Congress, although Republicans control both the House and the Senate. The November election not only will decide the next President, but also may change the balance of power in both houses of Congress.

Healthy Families Act

  • Would allow employees of an employer with 15 or more employees to earn 7 days of sick time per year after 60 days of employment.

  • 113th Congress: Introduced to the House and Senate on March 20, 2013. Co-sponsored by 134 Democrats in the House and 23 Democrats in the Senate.

  • 114th Congress: Introduced to the House and Senate on February 12, 2015. Co-sponsored by 145 Democrats in the House and 31 Democrats and 2 Independents in the Senate.

Family and Medical Insurance Leave Act

  •  Would create a trust fund within Social Security to collect fees and provide compensation to employees on FMLA.

  • 113th Congress: Introduced to the House and Senate on December 12, 2013. Co-Sponsored by 101 Democrats in the House and 6 Democrats in the Senate.

  • 114th Congress: Introduced to the House and Senate on March 18, 2015 with 134 Democrats co-sponsoring in the House and 20 Democrats and 1 Independent co-sponsoring in the Senate.

Family and Medical Leave Enhancement Act

  • Most recent version of this Act would extend FMLA coverage to employees at worksites with 15-49 employees, including part-time workers. The Act would also protect (1) parental involvement leave to participate in school activities or programs for children or grandchildren and (2) parental involvement leave to care for routine medical needs including: (a) medical and dental appointments of an employee’s spouse, child, or grandchild, and (b) needs related to elderly individuals, such as nursing and group home visits.

  • A version of this bill has been introduced to Congress each session since 1997.

  • The most recent version was introduced to the House on June 16, 2016 with 7 Democrats co-sponsoring.

Following the elections later this year, employers should be on the lookout for versions of these bills being reintroduced, potentially in a political climate where they have a stronger chance of passing.

ARTICLE BY LaToya Alexander of Polsinelli PC
© Polsinelli PC, Polsinelli LLP in California

OSHA Issues Special Zika Guidance to Employers

Zika VirusThe Occupational Safety and Health Administration has issued “interim guidance” to provide employers and workers information and advice on preventing occupational exposure to the mosquito-borne Zika virus.

The guidance’s recommended actions (Control & Prevention) for employers and general outdoor workers include the following:

  • Employers should inform workers about their risks of exposure.
  • Employers should provide workers insect repellants and encourage their use. Workers should use the repellants.
  • Employers should provide workers with clothing that covers their hands, arms, legs, and other exposed skin and encourage them to wear the clothing. They also should consider providing workers with hats with mosquito netting that covers the neck and face. Workers should wear the provided clothing, as well as socks that cover the ankles and lower legs.
  • In warm weather, employers should encourage workers to wear lightweight, loose-fitting clothing, which provides a barrier to mosquitos. Workers should wear this type of clothing.
  • Employers and workers should eliminate sources of standing water (e.g., tires, buckets, cans, bottles, and barrels), which are considered mosquito breeding areas. Employers should train workers to recognize the importance of getting rid of these breeding areas at worksites.
  • If requested, employers should consider reassigning to indoor tasks any female worker who indicates she is pregnant or may become pregnant, as well as any male worker who has a sexual partner who is pregnant or may become pregnant. Workers in these circumstances should talk to their supervisors about outdoor work assignments.
  • Workers should seek medical attention “promptly” if symptoms from infection develop.

Employers and workers in healthcare and laboratory settings are advised to follow good infection control and biosafety practices (including universal precautions) as appropriate and specific biosafety guidance from the Centers for Disease Control and Prevention for working with the Zika virus in the laboratory.

OSHA also noted that mosquito control workers may require additional precautions — more protective clothing and enhanced skin protection — beyond those recommended for general outdoor workers. Workers who mix, load, apply, or perform other tasks involving wide-area (or area) insecticides may need additional protection to prevent or reduce exposure to hazardous chemicals. When applying insecticides, these workers may require respirators, worn in accordance with OSHA’s respirator standard.

For employers of workers with suspected or confirmed Zika virus, OSHA recommends “general guidance.” This includes making certain supervisors and potentially exposed workers know about Zika symptoms, training workers to receive immediate medical attention after suspected exposure, and considering options for providing sick leave during the infectious period.

Employers with workers who travel to or through Zika-affected areas, such as travel industry employees, airline crews, and cruise line workers, the agency recommends following certain “precautions” outlined by the CDC, including flexible travel and leave policies and delaying travel to Zika-affected areas.

ARTICLE BY Tressi L. Cordaro of Jackson Lewis P.C.

Jackson Lewis P.C. © 2016

Banning Salary History Questions, Subway Restaurant Partners with DOL, Non-Competes: Employment Law This Week – August 15, 2016 [VIDEO]

Massachusetts Bans Salary History Question

Subway, DOL, Pay EquityOur top story: Beginning in 2018, pay history will be off limits for Massachusetts job applications and interviews. In a unique attempt to close the gender wage gap, the state has passed a pay equity law that will bar employers from asking applicants about their previous salaries. Employers will also be prohibited from seeking that information from an applicant’s prior employers. While this provision is the first of its kind in the country, the new law also contains more common equal pay protections, broadens the definition of “equal work,” and prevents employers from banning the discussion of salary among employees. Mickey Neuhauser, from Epstein Becker Green, has more.

“The hope is that by taking the salary history question off the table, employers will rely only on relevant factors and won’t even unconsciously rely upon an irrelevant factor, such as the employee’s prior salary. . . . The law does not prohibit applicants from disclosing their current salaries or salary history, and it doesn’t prevent applicants and employers from negotiating over salary. However, the law does not protect employers from paying a salary lower than what would otherwise be permitted under the act simply because an individual has agreed to accept that salary. In other words, an employee cannot agree to be illegally underpaid.”

Subway Partners with the DOL

The U.S. Department of Labor (DOL) and Subway teamed up to break new ground. The world’s largest fast-food franchisor has reached a voluntary agreement with the DOL to provide wage and hour compliance training to franchisees. The agency conducted more 800 investigations into underpayment of workers at Subway franchises in recent years. This partnership will focus on helping the franchises comply with federal wage and hour laws moving forward. While the DOL hopes to enter into more agreements like this one, franchisors are hesitant, noting that the deal could make them joint employers under the National Labor Relations Board’s standard.

New York Attorney General Cracks Down on Non-Competes

New York’s crackdown on non-compete agreements continues. An investigation by New York Attorney General Eric Schneiderman revealed that Examination Management Services Inc. required all of its workers, even those who had no access to trade secrets or sensitive information, to sign non-compete agreements. Non-compete agreements in the state are usually permissible only for employees with a high level of access to trade secrets or sensitive information. Under the agreement, the company will stop using the non-competes for most employees in New York.

Citigroup Unit Pays Misclassified Workers After DOL Probe

A Citigroup affiliate shells out a hefty sum for misclassifying workers. A subsidiary of Citigroup in Florida recently paid almost $2 million to workers whom it had misclassified as exempt from overtime pay. An investigation by the DOL’s Wage and Hour Division found that the company mistakenly applied the Fair Labor Standards Act’s exemption to a group of 882 employees. This case serves as a reminder that salaried workers are not necessarily exempt from overtime.

Tip of the Week

Lisa Glass, Chief Human Resources Officer for The Child Center of NY, is here with advice on how to create an effective onboarding program.

“An important way organizations can help combat employee turnover and help employees adjust to the new organization is through an effective onboarding program. An onboarding program allows employees to understand the expectations of their role in terms of performance as well as social expectations. . . . Effective onboarding is key in creating employee expectations and sharing organization values. The goals must align with the goals of the organization, and the program initiative must be driven by senior management, and not solely driven by human resources.”

ARTICLE BY George Carroll Whipple, III of Epstein Becker & Green, P.C.

©2016 Epstein Becker & Green, P.C. All rights reserved.