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Posts Tagged ‘NLRA’

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].

Gone In A Flash: NLRB Overrules Employee Handbook Standard

Posted on: December 20th, 2017

By: William E. Collins, Jr.

On December 14, 2017, in a case involving the Boeing Company, the National Labor Relations Board (“NLRB”) overruled the Lutheran Heritage workplace policy standard that stood for over 13 years, and ushered in a new standard for workplace policies. This decision is a significant shift in labor policy, leaving many hopeful that the new standard will provide consistency and give employers a clear picture of compliance.

Under the now overruled Lutheran Heritage standard, policies, rules, and handbook provisions that appeared neutral still violated the National Labor Relations Act (“NLRA”) if an employee could “reasonably construe” the policy to prohibit protected activity. As you can imagine, discerning what an employee would “reasonably construe” often led to puzzling results.

Departing from the “reasonably construed” standard, the Boeing decision sets out that an employer’s rule violates the NLRA only if the reasonable interpretation of the policy would potentially interfere with an employee’s ability to engage in protected activity.  The NLRB will look at two factors:

(1) the nature and extent of any potential impact on the protected activity; and

(2) the legitimate justifications associated with the rule.

Under this standard, the NLRB will categorize employer rules in one of three categories:

 

 

Category

Explanation

Category 1 The rule is lawful to maintain.

The rule is lawful because:

(a) when reasonably interpreted the rule has no tendency to interfere with the ability to engage in protected activity; or

(b) while the rule may have some tendency to interfere with an employees rights, the risk of interference is outweighed by the corresponding justifications.

Category 2 It is unclear whether the rule, as a general matter, would prohibit or interfere with an employee’s right to engage in protected activity. These rules warrant “individualized scrutiny” to determine if there is interference and whether the interference is outweighed by the specific justifications in the case.
Category 3 The rule is unlawful. The rule prohibits or limits an employee’s right to engage in protected activity and that limitation is not outweighed by the justifications.

 

Applying this new standard, the NLRB held that the Boeing “no-camera” policy was a Category 1 policy. While the policy requiring a camera permit to take pictures inside Boeing’s facilities could interfere with protected activity, the NLRB found that the justification for the rule outweighed this risk because it serves to protect information that is proprietary and involves national security.

While this more objective standard should remove some of the guesswork, employers are wise to revisit their employee handbooks to determine whether their policies fall into Category 1, or are at least defensible under Category 2. As you prepare your 2018 employee handbooks, members of the FMG National Employment Law Practice Group are available to assist your organization review and finalize these documents.

If you have any more questions or would like more information, please contact Will Collins 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.