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FMG Law Blog Line

Posts Tagged ‘National Labor Relations Act’

Ninth Circuit’s Decision Upholding Arbitration Clause Enables Uber To Sidestep Substantive Issues Regarding Misclassification

Posted on: October 10th, 2018

By: Laura Flynn

In O’Connor v. Uber, a case in which California Uber drivers assert they should be categorized as employees rather than independent contractors, the Ninth Circuit Court of Appeals recently issued an order reversing the district court’s denial of Uber’s motions to compel arbitration. The Court rejected Plaintiffs’ assertion Uber’s arbitration agreements were unenforceable. The Court’s decision reversing the order denying arbitration was based on Mohamed v. Uber, 848 F.3d 1201 (9th Cir.  2016) wherein the Court found the relevant provisions delegated the threshold question of arbitrability to the arbitrator, that the delegation provisions were not adhesive and were therefore not procedurally unconscionable, and that the provisions allowing drivers to opt-out of arbitrations were not illusory. The Court rejected Plaintiffs’ additional argument the arbitration agreements were unenforceable because they contained class action waivers that violate the National Labor Relations Act of 1935 pointing to the recent Supreme Court decision in Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018). As the class certification by the district court was premised on its determination the arbitration agreements were unenforceable, the order certifying a class of approximately 160,000 Uber drivers was also reversed.

Based on the Court’s decision, it appears Uber drivers will have to purse their misclassification claims individually through arbitration. The limited pool of arbitrators, the amount of time it takes to arbitrate an individual claim, the smaller payout for attorneys, and lack of precedential value associated with arbitrations will likely discourage some drivers from pursuing their claims.

If you have any questions or would like more information, please contact Laura Flynn at [email protected].

 

For further reading, see our blogs discussing this matter:

Going Out with a “Goat Bang”

Posted on: July 27th, 2018

Employee’s Slang in Comments on Social Media Protected as Concerted Activity

By: Robyn Flegal

A panel of the National Labor Relations Board ordered an Iowa electric company to rehire and pay back wages to a utility pole employee who was terminated for posting on social media that the Company was a “goat bang,” which he later testified was a commentary about the utility company’s safety policies—including (a) inadequate training and (b) splitting teams into groups that were too small to ensure employee safety.  The Company learned of this social media post when employees who were offended by the post showed their supervisors.

The panel held that the Company violated the National Labor Relations Act (NLRA) by firing the employee for his post. The panel held that the social media comments (even calling the Company a “goat bang”), while not “inherently concerted” and therefore not subject to heightened protection, were “concerted activity for the purpose of mutual aid or protection.” According to the NLRB, the Company’s explanation for firing the employee was pretextual, as multiple Company witnesses said that the employee was “canned” because of his posts. Notably, the NLRB also determined that the Company’s “attitude” and “conduct” policies, which the Company pointed to in justification of this termination, were illegal under the NLRA because the policies interfered with workers’ rights.

This decision demonstrates the careful consideration employers should give to a decision to terminate an employee for raising concerns about the Company on social media. Employers should also be reminded to evaluate their seemingly neutral policies for compliance with the NLRA. For more information or to consult with one of FMG’s seasoned Labor and Employment attorneys regarding reviewing your company’s policies, contact Robyn Flegal at [email protected] or any of the attorneys in our National Employment Law Practice Group.

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].