Management Memo

Management’s inside guide to labor relations

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.

New York City Mandates “Labor Peace” Agreements – Employment Law This Week®

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Featured on Employment Law This Week® – New York City is trying to force certain employers to sign “labor peace” agreements with unions.

Mayor Bill de Blasio has signed an executive order mandating that a property developer receiving at least $1 million in “Financial Assistance” require its large retail and food service tenants to accept “Labor Peace Agreements.” These agreements would prohibit the companies from opposing union organization and provide what some consider to be affirmative support and assistance to unions. City Development Projects that were authorized or received “Financial Assistance” before July 14, 2016, are exempt from this order.

See the episode below and a recent Act Now Advisory on this topic.

 

What the NLRB’s Ruling That Graduate Teaching Assistants Are Employees, With the Rights to Organize and Bargain Collectively Means for Employers

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The National Labor Relations Board (NLRB or Board) has ruled that graduate teaching assistants, i.e. graduate students who provide instruction and assist faculty with research as part of their own post-graduate education are “employees” within the meaning of the National Labor Relations Act (NLRA or Act), and thus have the right to join unions and engage in collective bargaining with the universities and colleges where they study.

For those who follow the Board, the 3-1 decision in Columbia University in, 364 NLRB No. 90 (2016) should come as no surprise. This past January, following a Regional Director’s Decision dismissing the representation petition filed by Graduate Workers of Columbia-GWC, UAW, (UAW or Union) because she found that under Board law, the graduate teaching assistants and research assistants the union sought to represent, were not employees as that term has been defined under the Act, but rather were students.

The Board Asked Four Questions

After the Regional Director issued her decision, the Union requested review by the Board and asked the Board to overrule its earlier holdings concerning graduate students and researchers such as those in the petitioned for unit. On January 13, 2016, the Board issued a Notice and Invitation to File Briefs, indicating that the Board would consider the Union’s appeal and that it would consider the Union’s argument that the Board should overrule its 2004 decision in Brown University, 342 NLRB 483, in which it had found graduate teaching assistants and research assistants were students and not employees under the Act. The Board invited interested parties to offer their views on the following questions:

  1. Should the Board modify or overrule Brown University, 342 NLRB 483 (2004), which held that graduate student assistants who perform services at a university in connection with their studies are not statutory employees within the meaning of Section 2(3) of the National Labor Relations Act?
  2. If the Board modifies or overrules Brown University, supra, what should be the standard for determining whether graduate student assistants engaged in research are statutory employees, including graduate student assistants engaged in research funded by external grants? See New York University, 332 NLRB 1205, 1209 fn. 10 (2000) (relying on Leland Stanford Junior University, 214 NLRB 621 (1974)).
  3. If the Board concludes that graduate student assistants, terminal masters degree students and undergraduate students are statutory employees, would a unit composed of all these classifications be appropriate?
  4. If the Board concludes that graduate student assistants, terminal masters degree students and undergraduate students are statutory employees, what standard should the Board apply to determine whether they constitute temporary employees?

The very fact that the Board was asking these questions was seen at the time as a strong indication that it would reject Brown and find a way to reclassify graduate teaching assistants as employees. Notably, two years ago, when the Board considered the Steelworkers effort to organize and represent student athletes who played football for Northwestern University on scholarships, the Board found the scholarship students to be “employees” but declined to exercise what it said was its jurisdiction that would have permitted it to conduct an election and require collective bargaining on what it characterized as considerations of public policy.

The NLRB Has Overruled Brown – The Answers to the Four Questions

The decision reverses and rejects the Board’s 2004 decision in Brown University, 342 NLRB 483, which the majority characterizes as “a sharply divided decision.” In Brown, the Board found that “graduate assistants who perform services at a university in connection with their studies are not statutory employees under the National Labor Relations Act.”

In jettisoning Brown, the majority concluded that the Board majority in that case “failed to acknowledge that the Act does not speak directly to the issue posed here, which calls on the Board to interpret the language of the statute in light of its policies.” The majority noted that “the Brown University decision, in turn, deprived an entire category of workers of the protection of the Act, without a convincing justification in either the statutory language of the Act or the policies of the Act.”

A quick read of the majority opinion and the dissent of Member Miscimarra suggest however that what the majority actually meant was that in the absence of express statutory language covering graduate students and research assistants, the majority felt comfortable substituting their views for those of the Brown majority, with whom they disagreed.  Columbia answers the four questions in the following way:

  1. The Board has overruled Brown and held that graduate teaching assistants and research assistants will now be considered to be statutory employees entitled to all of the Act’s protections.
  2. The Board will treat graduate research assistants as employees. Their positions will be examined under a traditional community of interest standard.
  3. The Board will apply its traditional community of interest standards in determining what are appropriate units for bargaining.
  4. While teaching assistants’ relationships with the University “are ‘temporar” in the sense that they are employed for short, finite periods of time averaging about two (not necessarily consecutive) semesters of work,” the Board nonetheless concluded that “all the employees in the unit, which we find to be appropriate, serve finite terms,” but that such finite terms alone cannot be a basis on which to deny bargaining rights.” Thus the Board rejects the argument that the limited duration of the teaching and research assistants means they should not be allowed to vote in representation elections.

Member Miscimarra Notes Real Risks In the Majority’s Approach

In addition to explaining why he believes as a matter of law and statutory construction why he believes the majority got it wrong and that the Brown majority was correct, Member Philip Miscimarra in his lengthy dissent points out a number of important policy considerations that the majority ignored, any and all of which can have profound negative consequences not only for the universities affected by this decision, but also for the students that they educate, both undergraduate and those the majority has now chosen to treat as statutory employees.

They include the following:

  • The Financial Investment Associated With a University Education, and the Mistake of Making Academic Success Subservient to the Risks and Uncertainties of Collective Bargaining and the Potential Resort to Economic Weapons.
    • Strikes
    • Lockouts
    • Loss, Suspension or Delay of Academic Credit
    • Suspension of Tuition Waivers
    • Potential Replacement of Striking Teaching and Research Assistants
    • Loss of Tuition Previously Paid
    • Misconduct, Potential Discharge, Academic Suspension/Expulsion Disputes
  • The many reasons that the “Board’s Processes and Procedures Are Incompatible With Applying the Act to University Student Assistants.”

What Columbia Means Going Forward

While the immediate impact of the decision is that the NLRB will now conduct a representation election in a unit of “All student employees who provide instructional services, including graduate and undergraduate Teaching Assistants (Teaching Assistants, Teaching Fellows, Preceptors, Course Assistants, Readers and Graders): All Graduate Research Assistants (including those compensated through Training Grants) and All Departmental Research Assistants,” to allow them to vote on representation by the UAW, the decision raises troubling questions both within academia and elsewhere and should be seen as part of a broader trend by the Board’s majority appointed by President Obama, to jump start collective bargaining and union organizing and bring unions into settings where until now they have not been found.

As we have previously reported, the NLRB has been broadly examining the nature of the employer-employee relationship, not only in the context of joint employment and co-employment but also in new areas of the gig economy, where unions and employees are arguing that workers traditionally recognized to be independent contractors have been “misclassified” and that such misclassification is in and of itself an unfair labor practice.

Union Organizing at Retail and Food Service Businesses Gets Boost from New York City “Labor Peace” Executive Order

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A new Act Now Advisory will be of interest to many of our readers in the retail and food service industries: “Union Organizing at Retail and Food Service Businesses Gets Boost from New York City ‘Labor Peace’ Executive Order,” by our colleagues Allen B. Roberts, Steven M. Swirsky, Donald S. Krueger, and Kristopher D. Reichardt from Epstein Becker Green.

Following is an excerpt:

New York City retail and food service unions got a boost recently when Mayor Bill de Blasio signed an Executive Order titled “Labor Peace for Retail Establishments at City Development Projects.” Subject to some thresholds for the size and type of project and the amount of “Financial Assistance” received for a “City Development Project,” Executive Order No. 19 mandates that developers agree to a “labor peace clause.” In turn, the labor peace clause will compel the developer to require certain large retail and food service tenants to enter into a “Labor Peace Agreement” prohibiting their opposition to a “Labor Organization” that seeks to represent their employees. …

If the objective of the Executive Order is to assure labor peace by way of insulation from picketing, work stoppages, boycotts, or other economic interference, it is not clear how its selective targeting of retail and food service tenants occupying more than 15,000 square feet of space—and the exclusion of other tenants and union relations—delivers on its promise. There are multiple non-covered tenants and events that could occasion such on-site disruptions as picketing, work stoppages, off-site boycotts, or other economic interference.

As a threshold matter, there is no particular reason why a labor dispute with a tenant occupying space shy of 15,000 square feet—among them high-profile national businesses—somehow is less disruptive to the tranquility of a City Development Project than one directed at a tenant whose business model requires larger space.

Also, the Executive Order does not address the rights or responsibilities of either landlords or their tenants that are Covered Employers bound to accept a Labor Peace Agreement when faced with union demands for neutrality that go beyond the Executive Order’s “minimum” neutrality requirements. There could be a dispute over initial labor peace terms if a union, dissatisfied that the Executive Order’s Labor Peace Agreement secured only a Covered Employer’s “neutral posture” concerning representation efforts, were to protest to obtain more ambitious and advantageous commitments that are coveted objectives of union neutrality demands, such as …

Read the full Advisory here.

What Does Subway’s “Voluntary Agreement” with the US Department of Labor Mean for Joint Employer Status?

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Hoagie Sandwich and ChipsThis past week, Doctor’s Associates Inc., which is the owner and franchisor for the Subway sandwich restaurant chain entered into a Voluntary Agreement (the “Agreement”) with the US Department of Labor’s (DOL) Wage and Hour Division “as part of [Subway’s] broader efforts to make its franchised restaurants and overall business operations socially responsible,” and as part of Subway’s “effort to promote and achieve compliance with labor standards to protect and enhance the welfare” of Subway’s own workforce and that of its franchisees.

While the Agreement appears intended to help reduce the number of wage and hour law claims arising at both Subway’s company owned stores and those operated by its franchisee across the country, the Agreement appears to add further support to efforts by unions, plaintiffs’ lawyers and other federal and state agencies such as the National Labor Relations Board (NLRB or Board), DOL’s own Occupational Safety and Health Administration (OSHA) and the EEOC to treat franchisors as joint employers with their franchisees.

What Is in the Agreement?

While on its face this may sound like a good idea and one that should not be controversial, in reality by entering into this Agreement, which among other things commits Subway to working with both the DOL and Subway’s franchisees, to develop and disseminate wage and hour compliance assistance materials and to work directly with the DOL to “explore ways to use technology to support franchisee compliance, such as building alerts into a payroll and scheduling platform that SUBWAY offers as a service to its franchisees,” and although the Agreement is notable for its silence on the question of whether the DOL considers Subway to be a joint employer with its franchisees, the Agreement is likely to be cited, by unions, plaintiffs’ lawyers and other government agencies such as the NLRB as evidence of the fact that Subway as franchisor possesses the ability, whether exercised or not, to directly or indirectly affect the terms and conditions of employment of its franchisees’ employees, and as such should be found to be a joint employer with them.

Notably, while the Agreement does not specifically address the exercise of any such authority on a day to day basis, it does suggest an ongoing monitoring, investigation and compliance role in franchisee operations and employment practices by Subway and a commitment by Subway as franchisor to take action and provide data to the DOL concerning Fair Labor Standards Act compliance.  In the past, courts have in reliance on similar factors held that a franchisor could be liable with its franchisees for overtime, minimum wage and similar wage and hour violations.

Of particular interest to many will be the final section of the Agreement, titled “Emphasizing consequences for FLSA noncompliance.”  This section not only notes that “SUBWAY requires franchisees to comply with all applicable laws, including the FLSA, as part of its franchise agreement,” but also what action it may take where it finds a franchisee has a “history of FLSA violations”:

SUBWAY may exercise its business judgment to terminate an existing franchise, deny a franchisee the opportunity to purchase additional franchises, or otherwise discipline a franchisee based on a franchisee’s history of FLSA violations.

Will Subway’s “Voluntary Agreement” with the DOL Have Any Impact Beyond Wage and Hour Matters?

As we approach the one year anniversary of the NLRB’s decision in Browning Ferris Industries, it is abundantly clear that not only the Board itself but unions and others seeking to represent and act on behalf of employees are continuing to push the boundaries and expand the application of Browning Ferris.  In fact the Board has been asked to find that policies and standards such as those evidencing a business’s commitment to “socially responsible” employment practices, the very phrase used in the Subway-DOL Agreement, should be evidence of indirect control sufficient to support a finding of a joint employer relationship between a business and its suppliers.

Moreover, the NLRB and unions such as UNITE HERE and the Service Employees International Union continue to aggressively pursue their argument that the terms of a franchise agreement and a franchisor’s efforts to ensure that its franchisees, who conduct business under its brand, can also be sufficient to support a finding of joint employer status.  No doubt they will also point to the Subway Agreement with the DOL as also being evidence of such direct or indirect control affecting franchisees’ employees’ terms and conditions.

What Should Employers Do Now?

Employers are well advised to review the full range of their operations and personnel decisions, including their use of contingent and temporaries and personnel supplied by temporary and other staffing agencies to assess their vulnerability to such action and to determine what steps they make take to better position themselves for the challenges that are surely coming.

Equally critical employers should carefully evaluate their relationships with suppliers, licensees, and others they do business with to ensure that their relationships, and the agreements, both written and verbal, governing those relationships do not create additional and avoidable risks.