Employer Law Report : Employment and Labor Relations Lawyer & Attorney : Porter Wright's Employer Law Report : Employment Litigation, Non-Compete, Trade Secrets

As we reported earlier, there is a split in the federal courts of appeals regarding whether the National Labor Relations Board (NLRB) has authority to issue binding opinions while it is operating with only two members. Since that post, another federal circuit has weighed in on the issue.

The NLRB is the federal agency charged with governing relations between private employers and unions and administering the National Labor Relations Act (NLRA). Ordinarily, the NLRB has five members and frequently delegates power to issue rulings and opinions to three-member panels. In order for the NLRB itself to act, it must have a three-member quorum. In late December 2007, the NLRB had one vacancy and two members whose terms were nearing expiration. Congress and the President clashed on the nomination of replacement NLRB members, and filling the vacancies became unlikely (and still has not occurred). Just before the expiration of the two members’ terms, the four-member NLRB delegated all of its power to a three-member panel, which included the two members whose terms were not set to expire. After the two departing members’ terms expired, the two remaining members of the three-member panel continued to issue opinions, relying on statutory language in the NLRA allowing a three-member panel to proceed as a quorum in the absence of one of its members. 

• Email This
• Print
• Trackbacks

If you missed our recent Employment Relations Seminar:  The Changing Landscape of Labor and Employment Law, that was held on Monday, May 4, 2009 in Columbus, we invite you to download a copy of our materials from the program here.

• Email This
• Print
• Trackbacks

 As a result of two contradictory opinions issued today, over 300 decisions issued by the National Labor Relations Board (NLRB or “Board”) in 2008 are potentially in jeopardy because, according to one federal circuit, they were issued by a two-member panel without the authority to issue binding opinions. 

By way of background, the NLRB is a federal agency that administers the National Labor Relations Act (NLRA), which governs the relations between private employers and unions. It is made up of five members. Yet, the NLRA allows for the five-member Board to delegate power to issue rulings and opinions to a three-member panel. On December 28, 2007, the Board had only four members. On that date, the four-member Board voted to delegate all of its power to a three-member panel. Just three days later, the terms of two of the four members that made the vote to delegate expired, leaving only two remaining members. During all of 2008 and early 2009, the Board had three vacancies for which Congress and the President clashed on the nomination of replacement Board members. Yet the two-member panel issued over 300 published and unpublished opinions in the labor relations area, proceeding as a quorum of the three-member panel—with two of the three required members of the three-member panel to whom the Board delegated its power.

The U.S. Court of Appeals for the D.C. Circuit ruled today that those decisions were invalid because the Board, including the panel to whom it delegated its power, lacked authority to act without at least three members. Laurel Baye Healthcare of Lake Lanier, Inc. v. NLRB, Nos. 08-1162, 08-1214 (D.C. Cir. May 1, 2009).  In reaching this conclusion, the D.C. Circuit relied on a provision of the NLRA requiring the Board to have a quorum of the Board itself (i.e. three members) “at all times” in order to be able to act. The D.C. Circuit held that, in order for two members of a three-member panel to act as a quorum under the statute, the Board itself must have at least three members; otherwise, the panel’s power is suspended along with the power of the Board itself. This decision invalidated all of the NLRB opinions issued in 2008 and early 2009.

• Email This
• Print
• Trackbacks

Struggling employers have been asking, can we reduce or eliminate retiree medical benefits? The Supreme Court has held that welfare benefits regulated by the Employee Retirement Income Security Act (ERISA) do not usually vest, and courts have generally followed the Sixth Circuit’s presumption that retiree medical benefits are not vested, unless the plan documents confer vesting. Thus, with proper reservation of the right to amend and terminate the plan, and consistent communications, an employer may be able to terminate these benefits without much risk of successful challenge.

But what if employees are unionized? In that case, the plan documents are not enough; courts also look to the terms of the collective bargaining agreement (CBA). And as the Sixth Circuit reminds us this month, the most important question just might be: in what court could this case be litigated? In Tackett v. M&G Polymers, USA, LLC, No. 07-4515/4516 (6th Cir. Apr. 3, 2009), the Sixth Circuit reversed dismissal of a retiree class action lawsuit, finding that the language in the CBA demonstrated an intent to vest retiree medical benefits sufficient to survive a motion to dismiss.

• Email This
• Print
• Trackbacks

Last week, the Obama Administration reiterated its commitment to enact comprehensive immigration reform during the first year of the new administration. On Tuesday, the New York Times reported that a coalition of unions have agreed to support the Administration’s initiative, joining the business community and the Chamber of Commerce, who have long supported immigration reform. Of course, with immigration reform, as with other contentious legislation, the devil is in the details, and different advocates define immigration reform differently. 

The Unions, Chamber of Commerce and the Administration agree that key elements of reform will include a reduction in the excessive backlogs for permanent resident status in both the employment and family based application tracts. There also appears to be an agreement coalescing among the interested stakeholders that will include a path to citizenship for the estimated 12 million undocumented immigrants in the country. 

• Email This
• Print
• Trackbacks

On April 1, 2009, in a 5-4 decision, the United States Supreme Court clarified an issue of confusion among lower courts when it held that “a collective-bargaining agreement that clearly and unmistakably requires a union member to arbitrate ADEA claims is enforceable as a matter of federal law.” 

The case, 14 Penn Plaza, LLC v. Pyett, No. 07-581, 556 U.S. ___ (2009), is a marked departure from established precedent in some jurisdictions and welcome news for employers who often prefer to present their cases to an arbitrator, rather than a jury. 

Until 14 Penn Plaza, the Supreme Court’s direction regarding the enforceability of a provision in a collective bargaining agreement that required a union member to arbitrate a statutory discrimination claim was not clear. In an earlier decision discussing whether an employee could be compelled to arbitrate a statutory discrimination claim, Alexander v. Gardner-Denver, 415 U.S. 36 (1974), the Court found that the provision at issue did not expressly require arbitration of a member’s statutory rights, so the employee could not be precluded from bringing statutory claims in a judicial forum.

• Email This
• Print
• Trackbacks

The Employee Free Choice Act, or EFCA, was introduced in Congress on March 10, 2009. The bill, introduced as H.R. 1409 and S. 560, is identical to last year’s bill. On February 26, we discussed the Secret Ballot Protection Act (see post here), which was proposed by Republicans as a preemptive strike against EFCA and which would prohibit employers from recognizing or bargaining with a union that had not won a secret-ballot election of employees. Democrat Joe Sestak, Congressman from Pennsylvania, has also introduced legislation targeting the relationship between unions, employees, and employers. Rep. Sestak introduced the National Labor Relations Modernization Act (NLRMA) (H.R. 1355) on March 5, 2009. 

The NLRMA mirrors many of the provisions of EFCA but does not include one key provision: the NLRMA does not contain the card-check provision that would eliminate employees' right to choose a union through a secret-ballot election. The NLRMA does, however, contain EFCA’s increase of damages for employers who commit unfair labor practices, a provision similar to EFCA’s regulating the timeline for negotiating the terms of an initial collective bargaining agreement, and a requirement that the parties submit to binding arbitration if they are unable to reach agreement. The NLRMA also contains a novel section—not included or addressed in EFCA or SBPA—which requires employers, following the setting of an election date, to notify unions of any campaign activity they intend to undertake and to allow unions equal access to employees.

Although EFCA is currently in the nation’s spotlight, there is considerable discourse among the public and Congress about the appropriateness of its card-check provision. If Congress becomes convinced that a card-check provision is not the right way to go, NLRMA or some other compromise bill might provide the consensus necessary to pass some sort of labor reform legislation. One thing seems clear. In order for any compromise to get the support or organized labor, it will have to include some means to make it easier for unions to organize workers and some provision for binding dispute resolution when bargaining a first labor contract. These are the things considered by unions to be key to their goal of increased union representation, a goal supported by the White House, by union supporters in Congress, and by the newly appointed Secretary of Labor. Employers should begin now to plan and take steps to prepare for what is certain to be a very concerted increase in union organizing activity.

Among the essential steps are manager training, designed to make managers especially aware of the likely changes in the law, but more important to make them aware of the specific arguments that are used by union organizers to get cards signed and the sort of manager behavior that will make it more likely those union arguments fail. Employers should also undertake a concerted review of policies and practices to be sure that they have in place those rules that make it more difficult for union organizing to succeed and more important, those policies that demonstrate to employees a commitment to effective communication, fundamental fairness, and genuine worker involvement.

• Email This
• Print
• Trackbacks

The recent decision by the United States Court of Appeals for the First Circuit in Pan American Grain Co. v. NLRB serves as a good reminder for unionized businesses contemplating layoffs: They may be obligated to bargain with the union that represents their employees not only over the effects of the layoff on employees but, possibly, the decision itself.

In Pan American, the court affirmed the NLRB’s ruling that a Puerto Rico grain company violated federal labor law by laying off 15 striking workers in February 2002 without giving their union an opportunity to bargain over the decision. Approximately 40 employees had been on strike for about two months when the employer announced that 15 of the striking employees would laid off “due to economic reasons and as a result of a substantial decrease in production and sales.” During the unfair labor practice proceedings that ensued following the union’s unfair labor practice charge filing, the employer claimed that the layoffs were prompted due to a combination of its efforts to modernize its operations and reduced sales. The NLRB ruled, and the court agreed, that in situations where there are multiple motives for a layoff, the employer has a duty to bargain with the union over the layoff decision as long as it is based at least partially on labor costs.

• Email This
• Print
• Comments
• Trackbacks

The chatter surrounding EFCA, or the Employee Free Choice Act, quieted down in mid-December, but EFCA is back in the news. 

Yesterday, President Obama’s nominee for his administration’s Secretary of Labor, Hilda L. Solis, was confirmed by the Senate. Secretary Solis was a co-sponsor of the Employee Free Choice Act when she was serving as a congresswoman from California. (See our prior post on Secretary Solis here.)
 

Today was also a big day for EFCA-watchers. Economists organized by the Economic Policy Institute, a progressive think tank, signed a public statement lauding the benefits of EFCA, which they claim would even the playing field between employers and workers in union organizing campaigns. The statement claims that the enactment of EFCA is “a critically important step in rebuilding our economy and strengthening our democracy.” Click here to see the statement in its entirety.

In an attempt to support the rights of employers and of employees who would value the chance to vote in a secret-ballot election, Republicans proposed the Secret Ballot Protection Act (SBPA) today as well. Previously introduced as S. 1312 and H.R. 866 in 2007, the SBPA is a preemptive strike against EFCA. SBPA would amend the National Labor Relations Act so that employers may not recognize or bargain with a union that has not been selected by a majority of employees in a secret ballot election administered by the National Labor Relations Board. Any employer who did recognize or bargain with a union that had not won a secret-ballot election of employees would be guilty of an unfair labor practice. The SBPA would also hold unions accountable for causing or attempting to cause an employer to recognize or bargain with a union that had not been democratically elected by employees. 

The SBPA is simply unlikely to pass—it has just 101 co-sponsors in the House and 16 in the Senate—but the bill’s re-introduction will help ensure that the debate about EFCA, both in Congress and in the media, remains two-sided. 

• Email This
• Print
• Comments
• Trackbacks

On Friday, January 30, President Obama signed three executive orders which have a significant impact on the rights of employees of federal contractors. The President said that these orders would “reverse many of the policies towards organized labor that we’ve seen these last eight years, policies with which I’ve sharply disagreed.” In effect, these Executive Orders favor the interests of organized labor concerning representation of employees of federal contractors.

One order requires that a company taking over a federal contract from a predecessor company offer jobs to nonsupervisory employees already on the job when the new contractor takes over. This requirement is a revival of a Clinton administration order that was rescinded by President Bush. This Executive Order essentially gives the incumbent employees a right of first refusal for jobs with the new contractor. The effect is that if the employees were represented by a union with the predecessor company, the incoming company will have to recognize the union as the representative of the employees and bargain with the union over the initial terms and conditions of employment that will apply on the job.

• Email This
• Print
• Comments
• Trackbacks

In December, we hosted a series of briefing sessions for our clients and friends on the dramatic changes in store for employers.  We discussed the Employee Free Choice Act (EFCA) and what steps employers should take now to protect themselves from the different playing field that this new law would offer unions.  We discussed other expected changes from President Obama and his administration, including federally mandated paid sick time.  We also discussed the difficult decisions that employers are facing how to effectively manage a reduction-in-force in these difficult economic times.

If you were unable to attend one of these sessions, we invite you to listen to the webinar recording.  We hope you find it helpful.

Webinar Recording: 
Workplace Impact of 2008 Presidential and Congressional Elections:  Dramatic Changes Ahead 

presented by Mike Underwood and Jenni Edwards on December 16, 2008.

• Email This
• Print
• Comments
• Trackbacks

Numerous news reports suggest that President-Elect Obama will name California Congresswoman Hilda Solis (D. Cal.), who was a co-sponsor of the Employee Free Choice Act, as his administration’s Secretary of Labor. Both the SEIU and the AFL-CIO have issued press releases enthusiastically responding to this news. Those of you who are curious or wary about this selection may wish to visit her website at http://solis.house.gov

• Email This
• Print
• Comments
• Trackbacks

As the economy takes a hit and the federal government considers bailouts, unions are chomping at the bit to get the organizing started. An SEIU (Service Employees International Union) internal email was leaked on CNN.com on Monday. In the email, SEIU employees disclose a specific plan to organize employees in the banking industry. The reason for targeting the banking industry? Because “the banking industry is now being infused with billions of dollars.” The email lists specific potential targets for future organizing efforts, including Fannie Mae, Freddie Mac, Chevy Chase/ B.F. Saul, BB&T, SunTrust, Bank of America/ Countrywide, Wachovia/ Wells Fargo, PNC Bank/ National City, and Citigroup. This list does not mean that SEIU will only target these banks. It is understandable that SEIU would target the biggest banks first—but other banks are surely to follow, especially if the union is welcomed by employees who are nervous about the future of their employment. 

As unions anticipate unprecedented changes to federal labor law that will make it far easier for them to organize workers (see EFCA post), economic uncertainty and federal bailouts are providing unions with precisely the talking points they need to convince employees that they are on uncertain ground without a union. As we have been discussing in our EFCA briefing sessions, it is important that employers in all industries develop a proactive strategy now that will protect them against union organizing campaigns in the future.

• Email This
• Print
• Comments
• Trackbacks

Of course, no one can be certain of the exact workplace effects of Tuesday’s Presidential election results. But, at least one major change in employment law is pretty certain – and it is a change that all employers, large and small, in all industries, should be planning for now.

President-Elect Obama has stated clearly his support for the proposed Employee Free Choice Act (EFCA). His election, together with additional Democratic seats picked up in the Senate and Congress, make the passage of EFCA in 2009 a very strong likelihood. That will mean the most dramatic change in labor law in this country in decades.

As a reminder, there are two significant provisions of the EFCA: First, unions will be able to demand bargaining rights based solely on cards that they can pressure employees to sign face-to-face. The protection of a secret-ballot election will be taken away. Second, if labor negotiations between a union and employer for a first contract reach impasse, an outside arbitrator will dictate the terms of that key first contract.

• Email This
• Print
• Comments
• Trackbacks

Starting in 2002, in an effort to organize employees at a Cintas Corporation facility in Pennsylvania, UNITE union organizers began recording the license plate numbers of vehicles located in the Cintas parking lot.  The organizers then accessed, either directly or through information brokers, state motor vehicle records to identify the employees’ names and home addresses. Ultimately, through this process, which is known as “tagging”, the union obtained the addresses for approximately 2000 workers (or their relatives or friends) and began visiting their homes with an eye toward convincing them to sign authorization cards. 

Unhappy with these tactics, several employees (together with family and friends whose cars also had been “tagged”) filed a class action lawsuit against UNITE under the federal Driver’s Privacy Protection Act.  That Act provides that a “person who knowingly obtains, discloses or uses personal information, from a motor vehicle record, for a purpose not permitted under this chapter shall beliable to the individual to whom the information pertains, who may bring a civil action. . . .”

The federal district court found UNITE liable under the DPPA back in 2005, awarded most of the named plaintiffs the statutory $2,500 in damages but deferred consideration of classwide relief.   Finding that the union’s organizing efforts did not constitute a “permissible use” under the DPPA, the Third Circuit, on September 10, 2008, upheld the finding of liability in a decision that can be read here. In addition, the court remanded the case back to the district court to consider whether any of the plaintiffs were entitled to multiple damage awards for multiple DPPA violations and to determine whether to hold a jury trial on punitive damages. 

• Email This
• Print
• Comments
• Trackbacks

Not everyone is pleased with the NLRB’s new policy – or at least with the rationale behind the policy. For example, a posting on the website of the pro-union organization American Rights At Work states: “In reality, NLRB elections bear no resemblance to political elections, and fall alarmingly short of the democratic process Americans envision when we use the term ‘election.’” Advocates for pro-union and union-free groups both typically argue about the fairness of the NLRB’s election procedures. Too bad they cannot at least agree on the NLRB’s new flag policy.

• Email This
• Print
• Trackbacks (1)

“Salting” is an organizing tactic in which union supporters seek employment at a non-union employer with the goal of organizing the workforce once hired. For many years, unions used salts as an effective tool to organize non-union workforces, particularly in the construction industry. In 2007, the NLRB issued two decisions (both by 3-to-2 margins), which limited the effectiveness of salts. Last week, the office of the NLRB’s General Counsel issued two Memoranda to its Regional Offices that provide insight into how the NLRB will investigate and litigate salting cases under the  new standards.

• Email This
• Print
• Trackbacks (1)

On December 16, 2007, the NLRB clarified its position regarding employer restrictions on employee e-mail use. The decision in The Guard Publishing Company, d/b/a The Register-Guard, 351 NLRB No. 70, is significant for two reasons. First, the decision holds that employees do not have a protected right to use employer e-mail systems for solicitations or communications regarding union-related topics. Second, it applies a new standard for determining when employers discriminatorily enforce e-mail policies and, thus, violate the NLRA.

• Email This
• Print
• Trackbacks