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Posts Tagged ‘National Labor Relations Act’

High Court OKs Employers’ Use of Class Waivers

Posted on: May 23rd, 2018

By: Paul Derrick

Class action waivers in employment arbitration agreements are enforceable under the Federal Arbitration Act (FAA), says the U.S. Supreme Court in a much-anticipated decision.

The Supreme Court’s long-awaited decision resolves a circuit split on whether class or collective action waivers contained in employment arbitration agreements violate the National Labor Relations Act (NLRA). By a 5-4 margin, the Court ruled that, under the FAA, arbitration agreements providing for individualized proceedings, rather than class or collective actions, are enforceable.

Arbitration agreements that require employees to pursue work-related claims in arbitration, rather than in court, have long been enforced pursuant to the FAA. Six years ago, however, the National Labor Relations Board decided that employers violate the NLRA when they require employees, as a condition of employment, to agree that they will resolve workplace disputes individually pursuant to an arbitration provision containing a class or collective action waiver.

The Supreme Court’s opinion makes it clear that the Board and various courts were wrong in believing that the NLRA trumps the FAA.  It noted that that nothing in a class or collective action waiver interferes with an employee’s right to participate in a union or engage in collective bargaining.

So, what does the Court’s ruling mean for employers right now?

First, they should look at their arbitration agreements and consider modifying them to include class action waivers if they are not already included.

Second, they should consider including an arbitration agreement and class waiver provision as part of their onboarding paperwork (but remember such clauses should not be included within the text of an employee handbook).

Finally, employers should expect that there is more litigation yet to come as employees and unions angle for ways to get around the Supreme Court’s decision.  Especially in states such California, there are other avenues by which employees can still maintain class and collective actions as a means of redressing their workplace disputes.  Despite these anticipated end-run attempts, employers should rest better knowing that the Supreme Court has explicitly approved the use of class action waivers in arbitration agreements.

If you have any questions or would like more information about this or any other labor law issue, please contact Paul Derrick at [email protected].

Company Wrongfully Terminates Employees for Emails Using Profanity

Posted on: May 1st, 2018

By: Joyce M. Mocek

The National Labor Relations Board (“NLRB”) recently determined Mexican Radio Corp. (a restaurant company) violated the National Labor Relations Act (“NLRA” or the “Act”) when it fired four (nonunion) employees after they sent emails complaining about their wages, work schedules, tip policy and work conditions.

The issues relating to the terminations began when a General Manager discussed with her employees new staffing and tip policies, and said “if you don’t like it, you can go.”  The General Manager also allegedly made a statement about an employee who had been absent from work due to an illness, inquiring if she was “dead yet”.   An employee resigned and sent an email to a group of coworkers complaining about the General Manager.  Current employees responded with a “reply all” email to the group, sharing their concerns.

Management subsequently met with the employees individually and attempted to interview them.  The employer then terminated the employees, providing different reasons for the terminations, including the emails used inappropriate language (profanity), refusal to be interviewed, and missing work.  The employees filed an NLRB charge alleging retaliation.  The ALJ issued a ruling holding the Company had violated section 8(a)(1) of the NLRA, which prohibits employers from interfering, restraining, or coercing employees in the exercise of their rights, by terminating the employees due to their participation in protected activity.

The Company filed exceptions to the ALJ’s decision, including objecting to its reach over nonunion employers.   The Company argued the email(s) contained profanity, and thus lost protection under the Act.  Under Atlantic Steel (a prior NLRB decision), in certain situations, an employer may terminate an employee for otherwise protected conduct if the behavior is “opprobrious” enough.   The NLRB disagreed with the Company’s arguments, finding the amount of profanity in the emails was not enough to lose protection.   The NLRB (affirming the ALJ’s decision in Mexican Radio Corp. and Rachel Nicotra, Case 02-CA-168989) determined the reasons for the terminations provided by the Company were pretextual, the true reason for the terminations were the employee’s participation in activity protected under the Act, and as such, the terminations violated the Act.

Employers  should be mindful of this ruling and the continued reach of the NLRB over nonunion employers when considering employee workplace activities.   This decision reinforces the need to ensure that Company handbooks and policies comply with guidelines relating to email and social media usage, and the need to carefully review and take appropriate action in each situation that may arise involving employee actions in violation of such policies.

If you have any questions or would like more information, pleases contact Joyce Mocek at [email protected].

NLRB Delivers One-Two Punch to Pair of Standards that Have Dogged Employers

Posted on: December 18th, 2017

By: Paul H. Derrick

In a stunning development, the National Labor Relations Board has overruled a pair of controversial standards that have caused headaches in the business community for years.

In the first case, the NLRB reversed an Obama-era decision that put employers potentially on the hook for labor law violations committed by their subcontractors and franchisees.  By a 3-2 vote, the Board erased its decision in a case known as Browning-Ferris Industries, which found a company to be a joint-employer with a subcontractor or franchisee if it had “indirect” control over the terms and conditions of the terms and conditions of the workers’ employment or had the “reserved authority to do so.”

Since that broad standard was adopted, the Board has used it to bring literally hundreds of cases against McDonald’s and other businesses for the alleged acts of their contractors and franchisees.  Going forward, however, the NLRB says that two or more entities will be deemed joint employers under the National Labor Relations Act only if there is proof that one entity actually exercised direct and immediate control over essential employment terms of another entity’s employees.  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.

In a second unexpected development, also by a narrow 3-2 margin, the NLRB overturned its 2004 decision in Lutheran Heritage Village-Livonia, under which many seemingly harmless workplace rules were deemed unlawful.  The Board had determined in that case that employer rules violate the NLRA if they “could be reasonably construed” by employees to prohibit the exercise of rights under the NLRA.

Going forward, the NLRB says that it will consider the nature and extent of a challenged rule’s potential impact on employee rights under the NLRA and the legitimate justifications associated with the rule.  The Board also announced three categories into which it will now classify rules to provide greater clarity and certainty to employees, employers, and unions.

The first category covers rules that are legal in all cases because they cannot be reasonably interpreted to interfere with workers’ rights or because any interference is outweighed by business interests; the second covers rules that are legal in some cases, depending on their application; and the third covers rules that are always unlawful because they interfere with workers’ rights and cannot be outweighed by business interests.  Notably, the Board also announced that it will no longer find a rule to be unlawful simply because it requires employees to foster “harmonious interactions and relationships” or to maintain basic standards of civility in the workplace.

Because of ongoing changes in the NLRB’s composition and the recent nomination of a new General Counsel, these latest decisions will certainly be the subject of challenge and much debate.  If you have any questions or would like more information, please contact Paul Derrick at [email protected].

Updates on the “Joint Employer” Standard

Posted on: October 10th, 2017

By: Tim Holdsworth

More than two years have passed since the National Labor Relations Board (“NLRB”) handed down its new and controversial joint employer standard in Browning-Ferris Industries of California, 362 NLRB No. 186 (August 27, 2015). As you may recall, that decision greatly expanded the standard under which an entity could be found as a joint employer under the National Labor Relations Act (“NLRA”). In departing from its own well-established standards, the NLRB announced that they will no longer require a joint employer to possess and exercise authority to control employees’ terms and conditions of employment, but instead will find sufficient control if the entity merely reserves this authority. They also announced they will no longer require the employer’s control to be exercised directly and immediately. Instead, the NLRB declared that control exercised indirectly, such as through an intermediary, can establish the requisite control.

The U.S. Department of Labor (“DOL”) adopted a similar standard for who it considered a “joint employer” under the Fair Labor Standards Act (“FLSA”) and the Migrant and Seasonal Agricultural Worker Protection Act shortly thereafter.

Neither of these controversial steps has fared well. The Browning-Ferris decision has been under attack in courts, while the DOL rescinded its guidance earlier this year under new Labor Secretary Alex Acosta.

Legislative efforts also have been made to give further guidance to businesses that have struggled with the uncertain and convoluted joint employer scheme. Recently, the U.S. House of Representatives Education and Workforce Committee approved a bill that would amend both the NLRA and FLSA to require that a company exert “direct, actual and immediate” control over workers to be considered an employer.

We will continue to monitor this legislation and provide any updates. For now, however, employers need to know that the Browning-Ferris standard is still in effect.

If you have any questions about federal, state, or local wage and hour laws, please contact Tim Holdsworth at [email protected] or any of the attorneys in FMG’s Labor & Employment Law Section.

NLRB Provides Guidance on Investigation Confidentiality Policies

Posted on: April 22nd, 2013

By: Anthony Del Rio

In July 2012, the National Labor Relations Board (“NLRB”) ruled that a blanket policy requiring confidentiality during all internal workplace investigations violates employees’ rights under Section 7 of the National Labor Relations Act (“NLRA”). The ruling represented a somewhat conflicting position, because one of the primary reasons confidentiality provisions were put in place was to protect employees and witnesses from retaliation.

This past week, the NLRB released an a memorandum that provides guidance on what it considers permissible confidentiality policies in workplace investigations. The NLRB’s memo suggests that, rather than using language that requires all investigations mandate confidentiality, policies should use the following language:

[Employer] may decide in some circumstances that in order to [protect the integrity of an investigation and to protect witnesses from harassment/retaliation], we must maintain the investigation and our role in it in strict confidence. If [Employer] reasonably imposes such a requirement and we do not maintain such confidentiality, we may be subject to disciplinary action up to and including immediate termination.

Confidentiality in employer investigations is key in order to protect both the employer and the employee. For that reason, a confidentiality provision that has actual force to it is necessary. However, at the same time, avoiding the scrutiny of the NLRB is also very important. For that reason, employers should consider reviewing and modifying their current policies to conform with the language suggested in the NLRB’s memorandum.

Furthermore, as we suggested in our prior coverage of this issue, before prohibiting employees from discussing pending investigations, employers must consider whether there is a real need for confidentiality based on risks of witness coercion, destruction of evidence, or other legitimate business concerns. Blanket prohibitions against discussion of internal investigations without this type of individualized assessment will likely violate Section 7 of the NLRA.