Management Memo

Management’s inside guide to labor relations

Epstein Becker Green to Participate in the 11th Annual National HR in Hospitality Conference & Expo

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Epstein Becker Green is pleased to be participating in the 2017 National HR In Hospitality Conference & Expo at the Aria Hotel in Las Vegas on March 27-29, 2017.  EBG is sending two of its hospitality industry focused attorneys to represent the Firm, Jeffrey H. Ruzal and Steven M. Swirsky.

Jeff and his co-panelists will discuss the topic of new wage and hour regulations, which will be held on Monday, March 27, 2017.  This panel of hospitality employment law professionals will cover changes associated with the minimum salary for exempt employees, managing challenges of off-duty work like email and texts; setting up bonus structures, tracking hours; and responding to flexible workweek requests.   Panelists will detail their successes and challenges related to these topics, and offer up valuable actionable insights for your company.

Steve is participating on a panel which will focus on labor management relations –  “Union 2017: Recent Developments.”   The panel discussion will take place on Tuesday, March 28, 2017 and cover  new organizing efforts, tactics and law, and renewed emphasis on elections. Session takeaways include identifying what law changes have occurred and how they affect employers; a description of how employers react to these changes; and understanding whether unionization is poised to increase or decrease in the hotel industry.

Jeff and Steve look forward to sharing their knowledge in hospitality law and discussing best practices to avoid many of the recurring legal issues plaguing the hospitality industry.

NLRB Rings In the New Year by Signaling It Will Continue Its Pro-Union Rulings

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In yet another decision that exhibits the current Board’s overreaching and expansive view of its jurisdiction, the Board recently ruled that nurses who supervise and assign other hospital staff are not statutory supervisors.

A Position Expressly Created to be Supervisory is Not Supervisory, According to the Board

In 2016, Lakewood Health Center (“Lakewood”) restructured its staffing system and replaced charge nurses with a newly created position, Patient Care Coordinator (“PCC”). According to the uncontradicted testimony of Lakewood Vice-President of Patient Care Danielle Abel, the hospital created this new position for one specific reason – “to ensure accountability for shift-by-shift work flow of the department….in addition to supervising the employees on their shift.” According to the job description, a PCC “provides overall supervision of staff and patient care,” is “responsible for daily nursing assignments,” and “retains overall accountability for the work flow for their shift, and remains accountable if duties are delegated to another qualified staff member.” Abel testified, without contradiction, that PCCs must assess the patient’s needs and the nurses’ skills when assigning nurses to patient care tasks and are accountable for the nurses’ performance.  The undisputed evidence further showed that PCCs were the highest ranking authority present evenings, nights and weekends and, for the majority of the time, the only person present with the authority to assign and direct nurses.  The Minnesota Nurses Association filed an election petition asserting that the PCCs should be included in the bargaining unit, thereby adding one more dues-paying classification to the potential bargaining unit.

In a terse one-page decision, the Board characterized the undisputed evidence as vague and conclusory and found that Lakewood failed to provide tangible examples demonstrating the PCCs’ supervisory authority. Although Abel testified that PCCs were accountable for assigning and supervising nurses, the Board dismissed her testimony as “simply a conclusion without evidentiary value.”  The Board likewise discounted Abel’s testimony that PCCs exercise independent judgment when assigning nurses because no one testified that the nurses have differing levels of skill and ability and, for most of the shifts in evidence, there was only one nurse available, stating that independent judgment cannot be established if there is “only one obvious choice.”

Miscimarra’s Scathing Dissent Exposes the Flaws in the Board’s Decision

Board member Miscimarra’s dissent harshly rebuked the majority’s decision as abstract, thinly supported and inconsistent with the undisputed evidence. Miscimarra noted that both the PCC job description and Abel’s testimony established, without contradiction, that PCCs were accountable for assigning and responsibly directing subordinate nurses.  In fact, according to Abel’s unrefuted testimony, the very reason that Lakewood created this new position was to impose accountability for patient care and staffing issues on a single person.  Miscimarra strongly criticized the majority for “disregard[ing] unrebutted evidence merely because it could have been stronger, more detailed, or supported by more specific examples,” particularly given that the PCC position was created a mere four months prior to the hearing.  He also noted that the Board apparently and unreasonably wanted specific testimony “to establish the commonsense fact that some employees are more skilled than others” and chastised the majority for ignoring the practical reality that the PCC is often the highest ranking person present at Lakewood, explaining that “[s]omeone has to be in charge at this facility at all times.”  Miscimarra ended his dissent with a biting, but particularly apt, reproach that “the finding that PCCs are not supervisors under Section 2(11) provides yet another illustration of the principle that ‘common sense’ is not so common.”

Employers Must Be Prepared

This decision stands as a stark reminder that employers must be prepared with documentation, examples and other specific evidence supporting supervisory determinations to combat the hostile and skeptical review of the current Board. This decision also signals that 2017 will be no different than 2016 for the Board – it will continue to issue decisions that assail employer’s rights and bolster its relevancy even when it flies in the face of common sense and basic workplace practicalities.

Key NLRB Decisions in 2016 – Employment Law This Week

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The year-end episode of Employment Law This Week  looks back at the biggest employment, workforce, and management issues in 2016.

Our colleague Laura Monaco discusses the National Labor Relations Board’s decision in Miller & Anderson, which expanded the already-relaxed joint-employer standard adopted by the Board in its August 2015 decision in Browning Ferris Industries

The show also reviews the Trustees of Columbia University decision on collective bargaining and union organizing.  

Watch the segment below and read Epstein Becker Green’s recent Take 5 newsletter, “Top Five Employment, Labor & Workforce Management Issues of 2016.”

NLRB Uses Hyper-Technical Rule to Overturn Employer’s Landslide Election Victory

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As we previously reported, the ambush election rules implemented by the National Labor Relations Board (“Board”) last year tilted the scales of union elections in labor’s favor by expediting the election process and eliminating many of the steps employers have relied upon to protect their rights and those of employees who may not want a union. We warned that in addition to rapidly expediting election timeframe, the regulations were full of technical and burdensome procedural mandates on employers.  The Board further emphasized the pro-union impact of these requirements in a Decision last week when it overturned the results of an election that a union overwhelming lost based on a hyper-technicality.  Even though there was no prejudice to the union, the Board gave the union another bite at the apple despite the employees’ resounding rejection of union representation; effectively denying the employees their voice and imposing even more burdens on the employer.

New Regulations require service of Excelsior List on union

Section 102.62(d) of the Board’s New Rules and Regulations provides that an employer “shall provide to the regional director and the parties…a list of the full names [and other information] of all eligible voters… within 2 business days after the approval” of the Stipulated Election Agreement. This list of eligible voters is commonly referred to as an “Excelsior list.”   Section 102.62(d) further provides that the Employer’s failure to follow these procedural mandates “shall be grounds for setting aside the election whenever proper and timely objections are filed.”

The Petition and Election at issue

On Thursday, March 3, 2016, URS Federal Services, Inc. (“Employer”) and the International Association of Machinists and Aerospace Works, District Lodge 725 (“Union”) entered into a Stipulated Election Agreement. The Employer filed the list of eligible voters, commonly referred to as an “Excelsior list,” with the Region on Saturday, March 5, but failed to serve the list on the Union.  While the Board’s Decision noted the Employer never offered any explanation for its oversight, the fact is that under the prior regulations an employer need only file the list with the Region; the requirement to serve the union is new.  While the Employer did not directly send it, the Region forwarded the list to the Union on Monday, March 7, thus the Union timely received the list within two business days of the approval of the Stipulated Election Agreement.

The Union lost the election 91 to 54. After its crushing defeat, the Union filed objections, seeking to overturn the election because of the Employer’s deficient service, even though it had timely received the list and never complained of service issue before.

Regional Director finds no harm, no foul

The Acting Regional Director for Region 20 acknowledged that the Employer failed to serve the Union, but declined to set the election aside because the Union had suffered no prejudice since it received the list within two business days of the approval of the Stipulated Election Agreement as required by the Election Rules. The Regional Director explained that “[t]o hold otherwise would exalt form over substance.”  Relying on well-established Board precedent, the Regional Director also concluded that the employer’s technical violation did not frustrate the purpose of the Excelsior rule, which was to ensure that employees are provided a “full opportunity to be informed of the arguments concerning representation.” Bon Appetit Management Co., 334 NLRB 1042, 1043 (2001).

Board puts form over substance to favor Union

The Board rejected the Regional Director’s decision, reasoning that “[t]o allow parties to ignore the service requirements set forth in Section 102.62(d) without any explanation or excuse would undermine the purpose of those provisions.” The Board never articulated what purpose it was referring to, other than to insinuate that strict enforcement was necessary to ensure “all parties take their obligations seriously under the amended Rules.”  (italics in original).  Notably, the primary purpose of the service requirements – to ensure employees are fully apprised of the arguments concerning representation – had not been undermined since the Union timely received the list from the Region.

Dissent detail Board’s pro-union hypocrisy

As dissenting Board Member Philip A. Miscimarra (“Miscimarra”) explained, the Board’s decision is troubling for several reasons. Not only does the holding elevate form over substance, but it contravenes longstanding precedent that the Board should not overturn election results lightly “unless presented with clear evidence that the results may not reflect the will of the voters.”  In furtherance of this principle, the Board has previously declined to overturn elections despite allegations of death threats or widespread voter fraud.  In stark contrast, the Board here accepted the Union’s contention that a “purely technical violation of a service requirement, timely cured by the Region, warrants overturning election results that overwhelmingly disfavored” the Union.

Equally, and perhaps more, concerning is that the Board has effectively created a double standard for unions and employers. In Brunswick Bowling Products, LLC, 364 NLRB No. 96 (2016), a decision issued a mere three months earlier, the Board unanimously upheld the Regional Director’s decision to excuse the union’s untimely service of its Statement of Position.  As Miscimarra aptly pointed out, although the Board has long tolerated minor deviations from the Excelsior list requirements, no such “history of leniency” exists with respect to the service requirements for Statements of Position.   Yet, when a union violated the historically inflexible service requirements for Statements of Position, the Board excused the union’s noncompliance, but refused to do the same for an employer who failed to comply with rules that have traditionally permitted slight deviations, “even though the service error could not have affected the election results because the Union received the voter list on the same day it would have received the list had no service error been committed.”

Employers are advised to continue to adhere to Obama Board’s Regulations and Decisions

During the last eight years, the Obama Board has overturned longstanding Board precedent and expanded the rights of unions far and wide. Many employers may anticipate some relief from the onerous burdens imposed by the Board during the last eight years as a new administration comes to DC.  However, this case is a sober reminder that the Board intends to enforce the rules it has promulgated during the last eight years, and employers cannot afford to become lax in their obligations under these rules and must remember the Decisions rendered remain the standards to which they will be held.

NLRB Majority Strikes Down Overly Broad Employee Handbook Policies

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Our colleagues Lauri F. Rasnick and Jonathan L. Shapiro, attorneys at Epstein Becker Green, have a post on the Financial Services Employment Law blog that will be of interest to many of our readers: “Policies Prohibiting ‘Insubordination or Other Disrespectful Conduct’ and ‘Boisterous or Disruptive Activity in the Workplace’ Struck Down by NLRB Majority.”

Following is an excerpt:

Once again seemingly appropriate work rules have been under attack by the National Labor Relations Board (“NLRB”). In a recent decision (Component Bar Products, Inc. and James R. Stout, Case 14-CA-145064), two members of a three-member NLRB panel upheld an August 7, 2015 decision by an Administrative Law Judge (“ALJ”) finding that an employer violated the National Labor Relations Act (“NLRA” or the “Act”) by maintaining overly broad handbook rules and terminating an employee who was engaged in “protected, concerted activity” when he called another employee and warned him that his job was in jeopardy.  Member Miscimarra concurred in part and dissented in part, arguing that the Board should overrule applicable precedent interpreting the Act.

Read the full post here.

Texas Federal Court Enjoins New FLSA Overtime Rules: Employer Impact

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Our colleague Michael S. Kun, national Chairperson of the Wage and Hour practice group at Epstein Becker Green, has a post on the Wage & Hour Defense Blog that will be of interest to many of our readers: “Stop! Texas Federal Court Enjoins New FLSA Overtime Rules.”

Following is an excerpt:

The injunction could leave employers in a state of limbo for weeks, months and perhaps longer as injunctions often do not resolve cases and, instead, lead to lengthy appeals. Here, though, the injunction could spell the quick death to the new rules should the Department choose not to appeal the decision in light of the impending Donald Trump presidency. We will continue to monitor this matter as it develops.

To the extent that employers have not already increased exempt employees’ salaries or converted them to non-exempt positions, the injunction will at the very least allow employers to postpone those changes. And, depending on the final resolution of this issue, it is possible they may never need to implement them.

The last-minute injunction puts some employers in a difficult position, though — those that already implemented changes in anticipation of the new rules or that informed employees that they will receive salary increases or will be converted to non-exempt status effective December 1, 2016. …

Read the full post here.

Proposed Increases Under New York State’s Overtime Laws: Not Blocked by Federal Overtime Rule Change Injunction

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Our colleague Jeffrey H. Ruzal, Senior Counsel at Epstein Becker Green, has a post on the Wage & Hour Defense Blog that will be of interest to many of our readers: “Decision Enjoining Federal Overtime Rule Changes Will Not Affect Proposed Increases Under New York State’s Overtime Laws.”

Following is an excerpt:

As we recently reported on our Wage & Hour Defense Blog, on November 22, 2016, a federal judge in the Eastern District of Texas issued a nationwide preliminary injunction enjoining the U.S. Department of Labor from implementing its new overtime exemption rule that would have more than doubled the current salary threshold for the executive, administrative, and professional exemptions and was scheduled to take effect on December 1, 2016. To the extent employers have not already increased exempt employees’ salaries or converted them to non-exempt positions, the injunction will, at the very least, appear to allow many employers to postpone those changes—but likely not in the case of employees who work in New York State.

On October 19, 2016, the New York State Department of Labor (“NYSDOL”) announced proposed amendments to the state’s minimum wage orders (“Proposed Amendments”) to increase the salary basis threshold for executive and administrative employees under the state’s wage and hour laws (New York does not impose a minimum salary threshold for exempt “professional” employees).  The current salary threshold for the administrative and executive exemptions under New York law is $675 per week ($35,100 annually) throughout the state.  The NYSDOL has proposed the following increases to New York’s salary threshold for the executive and administrative exemptions …

Read the full post here.

Permanent Injunction Issued Holding DOL Amended Persuader Rule Unlawful

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In a two page Order issued yesterday, Senior District Court Judge Sam R. Cummings of the U.S. District Court for the Northern District of Texas ruled that the Department of Labor’s (“DOL”) controversial new Persuader Rule issued in March 2016, and its new Advice Exemption Interpretation, are “unlawful,” and Judge Cummings made permanent his earlier June 27th Preliminary Injunction Order.

The Rule and Interpretation, which now appear to be permanently struck down, would have imposed dramatic changes in longstanding precedents, by requiring public financial disclosure reports concerning payments that employers make in connection with “indirect persuader activities” that were not reportable under the long standing rules, but that would have, if the new rule had not been struck down, would have, for the first time, been considered reportable as persuader activity.

Judge Cummings Has Adopted The Preliminary Injunction And Made it Permanent

In a brief two page Order, Judge Cummings has adopted and incorporated the findings and conclusions in his earlier Preliminary Injunction, in which the Court concluded:

[The DOL is] hereby enjoined on a national basis from implementing any and all aspects of the United States Department of Labor’s Persuader Advice Exemption Rule (“Advice Exemption Interpretation”), as published in 81 Fed. Reg. 15,924, et seq., pending a final resolution of the merits of this case or until a further order of this Court, the United States Court of Appeals for the Firth Circuit or the United States Supreme Court.  The scope of this injunction is nationwide.

District Court Order Provides Employers Comprehensive Victory

The Court’s Order here gives employers a comprehensive victory, finding that the employers and organizations that brought the lawsuit had succeeded in establishing:

  • The DOL exceeded its authority in promulgating its new Advice Exemption Interpretation in the new Persuader Rule;
  • The new Advice Exemption Interpretation is arbitrary, capricious and an abuse of discretion;
  • The new Advice Exemption Interpretation violates free speech and association rights under the First Amendment;
  • The new Advice Exemption Interpretation is unconstitutionally vague; and
  • The new Advice Exemption Interpretation violates the Regulatory Flexibility Act.

This Injunction Appears Likely to Stand

While it is theoretically possible that the DOL could appeal from the issuance of the Permanent Injunction, given the election of Donald J. Trump and the Republican’s continued majority in both the Senate and the House, it appears unlikely that such an appeal will be pursued or that the new Congress would be supportive of the objectives of the now repudiated rule.

NLRB GC Moves to Permit Disruptive One Day Strikes

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In the waning days of the Obama Administration, the President’s appointed General Counsel to the NLRB took official action this week to permit questionable and disruptive strike activity, including one day strikes that are frequently used by aggressive unions against hospitals and other employers.  Specifically, the GC’s Office issued an Operations-Management Memorandum acknowledging unions and employees “are more frequently engaging in short-term strikes” and seeking to “clarify and modify the law regarding intermittent and partial strikes” to address concern employees face “potential discipline for activities that should be considered protected under Section 7 of the Act.”

The Memo seems to be a transparent attempt to push an agenda to protect the activities of certain unions, mainly in the health care, fast food, and retail industries, which have used multiple one-day strikes as a weapon.

Intermittent Strikes, Partial Strikes and Slowdown Are Not Permitted Under the NLRA

Under current National Labor Relations Act case law work slowdowns, partial strikes and intermittent strikes are not permitted, and therefore employees who engage in them are not protected and may potentially be disciplined or discharged.  The reason for this long standing policy is clear; while employees should be free to withhold their labor as economic leverage, they should not be able to do so without any risk or sacrifice.  For that reason, what the Board has historically referred to as quasi-strikes which are “intentionally planned and coordinated so as to effectively reap the benefit of a continuous strike action without assuming the economic risks associated with a continuous forthright strike, i.e., loss of wages and possible replacement,” have not been entitled to protection under the Act.  WestPac Electric, 321 NLRB 1322, 1360 (1996).

While this principle is sound and well established, its exact contours lack clarity.  While work slowdowns, partial day strikes or work stoppages refusing to do a certain type of work (overtime, weekend, etc.)  fall clearly outside the protection of the Act, to date Board law has been less clear on strikes lasting at least one day, even if repeated in nature.  While most recognize that an announced strategy of multiple one day strikes would be problematic as would many one day strikes, there has been less clarity on how many is many, with many believing two to three one day strikes could be protected but more than that likely loses protection.

Unions Increasingly Use Intermittent and Short Strikes to Improperly Gain Bargaining Leverage

In recent years , taking advantage of the lack of clarity, the California Nurses Association, SEIU, and other unions have used one day strikes against hospitals as a way to force the target hospital to spend millions of dollars in replacement workers and other preparations to ensure proper care for their sick patients while not really impacting the wages of the nurses or other healthcare workers who only lose a day or two of pay.  Similarly, the UFCW, “Fight for 15” and other organizations have used flash strikes or other short term walkouts (often during holidays or other peak times) to obtain publicity and disrupt the operations of fast food restaurants, Wal-Mart and others, without significant or even any loss of wages.

In the case of a hospital, these strikes typically take the form of a strike notice under 8(g) of the Act telling the hospital that the employees will be on strike for a single 24 hour period together with an unconditionally offer to return to work as the end of that period.  This forces the hospital to scramble to find qualified temporary replacement workers, vet them, train them and orient them.  In order to do so, the hospital typically needs to contract with the replacement workers for at least five days and at significant expense.  Once the strike is over, often nothing has been resolved and the parties go back to the table only for the union to threaten to engage in another intermittent strike sometime down the line.

The only saving grace was that unions were hesitant to call more than two or three of these short strikes during any single labor dispute/negotiation because of the lack of clarity noted above left them vulnerable to a claim that the third or fourth short strike was intermittent and unprotected.

GC Seeks an Exception

In acknowledging both the increase of these union tactics and the lack of clear guidance on them, the GC’s Memorandum instructs the NLRB’s Regions to take action to again put their thumb on the scales in favor of unions.  Specifically, the GC Memorandum provided and instructed Regions to utilize an Intermittent Strike Brief Insert that advocates for a loosing of the standard to sanction any intermittent or short time strikes which:

  1. “involve a complete cessation of work [as opposed to a slow down or partial work stoppage];
  2. “are not designed to impose permanent conditions of work [i.e., weekend only strikes, refusal to work overtime, etc.], but rather are designed to exert economic pressure; and
  3. The employer is made aware of the employees’ purpose in striking.”

While, if accepted by the Board and the courts, this certainly would provide some clarity, that clarity would be that unions would be free to conduct as many short, intermittent strikes as they desired so long as they called for a complete walkout and they old the employer what they were seeking.  This would not only sanction the damaging work stoppage above, but would result in increased and expanded use/abuse of such tactics.

Management Missive

Employers must be aware of this development, as well as the fact unions likely will be looking to test this theory, and should prepare accordingly.  While certainly contingency planning is a must, employers may also be able to take advantage of certain bargaining strategies designed to mitigate the impact of these union tactics.  Employers should consult with experienced labor counsel to ensure they are prepared.

 

Employers Under the Microscope: Is Change on the Horizon? – Attend Our Annual Briefing (NYC, Oct. 18)

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Employers Under the Microscope: Is Change on the Horizon?

When: Tuesday, October 18, 2016 8:00 a.m. – 4:00 p.m.

Where: New York Hilton Midtown, 1335 Avenue of the Americas, New York, NY 10019

Epstein Becker Green’s Annual Workforce Management Briefing will focus on the latest developments in labor and employment law, including:

  • Latest Developments from the NLRB
  • Attracting and Retaining a Diverse Workforce
  • ADA Website Compliance
  • Trade Secrets and Non-Competes
  • Managing and Administering Leave Policies
  • New Overtime Rules
  • Workplace Violence and Active-Shooter Situations
  • Recordings in the Workplace
  • Instilling Corporate Ethics

This year, we welcome Marc Freedman and Jim Plunkett from the U.S. Chamber of Commerce. Marc and Jim will speak at the first plenary session on the latest developments in Washington, D.C., that impact employers nationwide.

We are also excited to have Dr. David Weil, Administrator of the U.S. Department of Labor’s Wage and Hour Division, serve as the guest speaker at the second plenary session. David will discuss the areas on which the Wage and Hour Division is focusing, including the new overtime rules.

In addition to workshop sessions led by attorneys at Epstein Becker Green – including some contributors to this blog! – we are also looking forward to hearing from our keynote speaker, Former New York City Police Commissioner William J. Bratton.

View the full briefing agenda here.

Visit the briefing website for more information and to register, and contact Sylwia Faszczewska or Elizabeth Gannon with questions. Seating is limited.