Management Memo

Management’s inside guide to labor relations

Two for One: Noel Canning and D.R. Horton Continue to Generate Waves at the NLRB

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By: Steven M. Swirsky, Adam C. Abrahms, and D. Martin Stanberry

In case you were hoping that the Supreme Court’s recent decision in Noel Canning would finally put to bed any questions regarding President Obama’s recess appointments to the NLRB, or that the Fifth Circuit’s rejection of the Board’s decision in  D.R. Horton might alter the NLRB’s position on the right of employers to require employees to abide by mandatory arbitration agreements , think again.

In Fuji Food Products a decision issued on July 15, 2014, NLRB Administrative Law Judge Jeffrey D. Wedekind held that former NLRB Board Member Craig Becker’s recess appointment was valid and that Fuji Food Product’s arbitration agreement, which required  employees  to arbitrate all federal claims,  was unlawful.

Specifically, the ALJ concluded  that Member Becker’s recess appointment was valid under Noel Canning because unlike the others appointments made by President Obama, his occurred during a 17-day intra-session recess, during which  no sessions of the Senate (pro-forma or otherwise) took place. For a closer look at the Noel Canning decision and its impact on the Board’s decisions from August 27, 2011 through July 17, 2013 read our earlier post.

With regards to D.R. Horton, the ALJ acknowledged that the Fifth Circuit Court of Appeals had rejected the Board’s conclusion upon which his decision was based, but he explained that because of the doctrine of non-acquiescence, he was “required to follow Board precedent unless and until it is reversed by the Supreme Court.” Our analysis of the Fifth Circuit’s decision in D.R. Horton v. NLRB can be read here.

ALJ Wedekind’s decision is evidence that significant questions remain in the post-Noel Canning world and that the principle in D.R. Horton is far from a settled matter.

The holding that former Member Becker’s appointment was valid may determine whether those decisions issued by the Board between August 27 and December 31, 2011 were valid. A finding that Member Becker’s appointment was unconstitutional and invalid would leave the Board without the requisite three members needed to issue decisions as established in New Process Steel.

The ALJ’s non-acquiescence to the Fifth Circuit Court of Appeals decision in D.R. Horton v. NLRB is also intriguing, although not surprising.  Indeed, NLRB ALJs are loath to disregard Board precedent even where federal courts have overturned their holding. As a practical matter, this means that ALJs will continue to find similar binding arbitration agreements unlawfully interfere with employees’ rights under the National Labor Relations Act unless and until the Supreme Court rules on the issue.  Don’t expect that any time soon however, the NLRB’s decision not to petition the Supreme Court for a writ of certiorari challenging the Fifth Circuit Court of Appeals decision, which it would have had to file earlier this month to be timely, means that the NLRB will likely continue to rely upon its holding in D.R. Horton for the foreseeable future.

OSHA and NLRB Agreement Opens New Door To Whistleblower Claims

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On Epstein Becker Green’s OSHA Law Update blog, Eric Conn reviews the agreement between the NLRB and OSHA, which allows employees to file out-of-date safety related whistleblower claims to be filed with the NLRB.

Following is an excerpt from the blog post:

On May 21, 2014, the National Labor Relations Board (NLRB) published a memorandum discussing a new agreement between NLRB and OSHA regarding a backdoor route for employees to file safety related whistleblower claims that are too stale to be filed with OSHA. The NLRB memo directs OSHA representatives to “notify all complainants who file an untimely [OSHA] whistleblower charge of their right to file a charge with the NLRB.” As a result of this agreement, employers should expect an increase in the number of unfair labor practice claims filed by employees alleging retaliation for protected safety related whistleblower activity.

To access the full blog post, please click here.

 

Stuart Gerson on the Supreme Court’s Harris and Hobby Lobby Decisions

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Our colleague Stuart Gerson of Epstein Becker Green has a new post on the Supreme Court’s recent decisions: “Divided Supreme Court Issues Decisions on Harris and Hobby Lobby.”

Following is an excerpt:

As expected, the last day of the Supreme Court’s term proved to be an incendiary one with the recent spirit of Court unanimity broken by two 5-4 decisions in highly-controversial cases. The media and various interest groups already are reporting the results and, as often is the case in cause-oriented litigation, they are not entirely accurate in their analyses of either opinion.

In Harris v. Quinn, the conservative majority of the Court, in an opinion written by Justice Alito, held that an Illinois regulatory program that required quasi-public health care workers to pay fees to a labor union to cover the costs of wage bargaining violated the First Amendment. The union entered into collective-bargaining agreements with the State that contained an agency-fee provision, which requires all bargaining unit members who do not wish to join the union to pay the union a fee for the cost of certain activities, including those tied to the collective-bargaining process. …

An even more controversial decision is the long-awaited holding in Burwell v. Hobby Lobby Stores, Inc. Headlines already are blasting out the breaking news that “Justices Say For-Profits Can Avoid ACA Contraception Mandate.” Well, not exactly. …

Both sides of the discussion are hailing Hobby Lobby as a landmark in the long standing public debate over abortion rights. It is not EBG’s role to enter that debate or here to render legal advice, but we respectfully suggest that the decision’s reach is already being overstated by both sides. In the first place, the decision does not allow very many employers to opt out of birth control coverage – only closely-held for-profit companies that have a good-faith ideological core, as clearly was the case for Hobby Lobby. That renders such companies functionally the same as non-profits that are exempted from the mandate by the government. Publicly-held companies are not affected by the decision (though some are likely to argue that Citizens United might require such an extension. Nor are privately-held companies that can’t demonstrate an ingrained belief system.

Read the full post here.

All NLRB Decisions and Actions From August 27, 2011 Through July 17, 2013 Are Invalid or in Doubt

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By: Adam C. Abrahms, Kara M. Maciel, Steven M. Swirsky, and Mark M. Trapp

The U.S. Supreme Court today held that the US Senate was not in recess on January 4, 2012, when President Obama made three “recess” appointments to the National Labor Relations Board under the Constitution’s Recess Appointment Clause.  In simple terms that means that the recess appointments were not proper and s decisions in which the recess appointees participated were not valid.

What this now means is that hundreds of cases decided by the NLRB following the January 4, 2012 recess appointments to the Board from January 4, 2012 until the Senate confirmed the current Board members who joined the NLRB as of August 12, 2013, were unconstitutionally decided because the Board lacked a quorum and could not decide cases or issue orders.  Additionally, while Noel Canning concerned the January 2012 recess appointments, there is also doubt as to earlier decisions in which previous recess appointees participated going back to August 2011.

The Court’s decision upheld the January 2013 decision of the US Court of Appeals for the District of Columbia Circuit which found that the panel of the NLRB that had previously decided an unfair labor practice case against Noel Canning, a Pepsi bottler, was unconstitutionally constituted and therefore the decision was invalid.  There the DC Circuit held that because the Senate, whose advice and consent is required for appointments to the NLRB had not been in recess when the President made his appointments, the company’s “understanding of the constitutional provision is correct, and the Board’s is wrong. The Board had no quorum, and its order is void.”  The Court of Appeals for the Third Circuit had also reached a similar conclusion concerning the lack of a quorum due to the Senate not having been in recess when the January 2012 appointments were made.

This decision now casts into doubt and makes suspect more than 1,300 NLRB decisions, including both published and unpublished, issued by the NLRB.  An excellent summary of the cases that are implicated by the Court’s decision, and the issues involved in each has been prepared by the US Chamber of Commerce Litigation Center.

The Court’s holding, which found that the Senate was not in recess while it was conducting pro forma sessions during December 2012, arose in the context of a challenge to a Board Order in which recess appointees participated; the implications however  are far greater and may implicate a wide range of other Board actions such as the appointment of Regional Directors, the consolidation of Regional offices and other administrative and personnel actions requiring Board approval or authorization.  Notably, in a case decided by a District Court in the Eastern District of Washington last August an employer successfully challenged not only the Board’s authority to authorize a Regional Director to pursue an injunction under Section 10 (j) of the National Labor Relations Act, but the appointment of then Acting NLRB General Counsel Lafe Solomon, who was then a recess appointee.  That case turned on other provisions of the Pay Act, a federal law authorizing the payment of salary to properly appointed recess appointees.

In a relatively understated press release following the Court’s decision, Board Chair Mark Gaston Pearce emphasized the fact that “the National Labor Relations Board has a full contingent of five Senate-confirmed members who are prepared to fulfill our responsibility to enforce the National Labor Relations Act.”

What this means to Employers, Unions and Others With Cases Before the NLRB

If the Board’s actions following the Supreme Court’s decision concerning an earlier attempt by the NLRB to delegate its decision making authority to a two member panel in the face of  earlier disputes between the President and the Senate is any precedent, it is likely that at least three members of the current five member Senate confirmed Board will try to essentially adopt and approve as many as possible of the Board Orders and actions that would be invalid under Noel Canning.  As shown in the Chamber’s chart, there are a large number of cases that are essentially on hold in Courts of Appeal across the country that have been waiting for the Court’s ruling today.  It is likely that the courts will dismiss these matters or that the NLRB will seek to withdraw those in which it is seeking enforcement of Board Orders.

However, as we and others have pointed out since the issue of the 2012 and earlier recess appointments were placed in doubt, employers and others with matters before the Board, the most prudent course of action would have been to make sure that in addition to any other defenses or grounds for appeal, that parties specifically raise the issue that the Board lacked a quorum and the authority to act when it made decisions, issued orders and took other action.  However even in those cases that were decided by the Board during the period that it lacked a proper quorum, parties may be able to raise the lack of quorum argument in light of today’s decision. Each matter will require an analysis based on its own individual facts and issues.

Additionally, today’s ruling has broad impact even in cases which are currently being investigated at the Regional level or are currently pending before the Board.  Not only can we expect even further delay in Board action (including at the Regional level) as the agency attempts to deal with the backlog created by having to address hundreds cases directly impacted by the Decision.  Specifically, there are thousands of cases which are currently being prosecuted or advanced at various stages which explicitly or tangentially rely on theories or precedents relying on a now invalid Board decision.  Specifically, cases involving at-will employment agreements, arbitration agreements, employee investigations, employee access, dues deductions post-contract expiration, and bargaining over employee discipline have all now been stripped of much of the precedence on which a Region, a union or an employee may be relying.  Again each matter will require an analysis based on its own individual facts and issues.

Management Missives

  • If the “invalid” Board issued a decision impacting an employer it should promptly analyze its options;
  • If an employer has a case in abeyance or pending based on Noel Canning it should obviously expect action in the coming weeks;
  • Employers should look for settlement opportunities with Regions, unions and individuals which may be present as these adverse parties may be more amendable to now that the theory of the case now lacks valid authority or based on their increased workloads;
  • Employers should explore filing supplemental position statements or other filings in any case where a Region, union or employee is relying on an “invalid” decision;
  • Employers should still remain cautious as while many decisions have been put into question, the current composition of the Board provides absolutely no reason for employers to rejoice or be less vigilant, as the current, lawfully confirmed, Board is unlikely to view most issues any differently.

 

OSHA’s Hospital Worker and Patient Safety Guidance

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On Epstein Becker Green’s OSHA Law Update blog, Eric Conn reviews an article about OSHA’s web-based “Worker Safety in Hospitals” guidance. The article is entitled “Hospitals’ Heavy Lifting: Understanding OSHA’s New Hospital Worker and Patient Safety Guidance” and is co-authored by our colleagues Eric Conn, James Frank, and Serra Schlanger. As Management Memo readers are aware, unions frequently use OSHA complaints as a tactic in corporate campaigns and OSHA has increased its cooperation with the NLRB in their enforcement mandates.  OSHA compliance is an important part of any union avoidance strategy. 

Following is an excerpt from the blog post:

The article, published in AHLA’s Spring 2014 Labor & Employment publication, summarizes OSHA’s new web-based “Worker Safety in Hospitals” guidance, explains how the guidance relates to OSHA’s existing regulatory framework, and details what OSHA considers necessary for an effective Safe Patient Handling Systems as well as an effective Safety and Health Management System.

To access the full blog post, please click here.

Unions Swim Against the Tide as Pension Issues Surface for Negotiations and Organizing

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Our colleague Allen B. Roberts recently wrote a client advisory entitled “Unions Swim Against the Tide as Pension Issues Surface for Negotiations and Organizing,” which appears on Epstein Becker Green’s website.

Following is an excerpt:

Contributions to multiemployer defined benefit pension plans have been a mainstay, legacy feature of union negotiations in many industries. But the fabric of such staples may be tearing apart as employers contemplate the potential of escalating contributions to amortize unfunded liabilities that increase costs but may have imperceptible value for their own employees. Increasingly, employers and their employees are questioning whether the promise of retirement security can be delivered cost effectively—or at all—by defined benefit pension plans maintained under union contracts.

With private sector union membership standing at 6.7 percent nationally in 2013, major sectors of the economy and geographic areas are not affected significantly by either current unionization or successful organizing efforts.

Read the full article here.

NLRB Continues to Increase Use of Section 10(J) Injunctions

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By Steven M. Swirsky and Peter M. Panken

NLRB General Counsel Richard Griffin has declared in an April 30, 2014 General Counsel Memorandum. that his office will continue and expand the increasingly aggressive pursuit of injunctions in Federal Court against employers in connection with union organizing and bargaining for initial collective bargaining agreements.

In GC Memorandum GC 14-30, the Board’s regional offices have been directed that they should aggressively consider requesting authorization from the General Counsel and the Board to pursue Section 10(j) injunctions in the following types  of cases :

  1. Those alleging Unfair Labor Practice violations involving contract negotiations  that occur during the period after a Union is first  certified to represent employees  when the parties are or should be bargaining for a first collective bargaining agreement;
  2. charges involving claims of employee terminations during campaigns for union recognition;
  3. employee terminations occurring during the bargaining for an initial collective bargaining agreement;
  4. cases involving successor employers refusal to bargain, which involve claims of conduct that  “undermines [the union which will] lead to disaffection, concomitant loss of bargaining power and loss of benefits that cannot be restored by final Board order”; and
  5. “cases where a successor employer refuses to hire employees to avoid bargaining with an incumbent union, the potential scattering of those employees creates an even greater risk that a final Board order will not effectively restore the parties to establish a good faith bargaining relationship.”

The reasoning behind the aggressive use of this extraordinary relief is the General Counsel’s view that in cases of these types the passage of time between the filing of the ULP charges and any relief that the Board may ultimately render following an investigation of the charges, the litigation of the issues before an Administrative Law Judge and the issuance and enforcement of a final Board Order, will often render any ultimate findings meaningless.

NLRA Section 10(j), 29 U.S.C. § 160, permits the NLRB to seek injunctive relief in Federal Court if they issue an unfair labor practice complaint “for appropriate temporary relief or restraining order.”  From 2002 through 2010, the NLRB sought between 11 and 23 such injunctions each year.  However, in 2012 and 2013 the NLRB brought 55 such actions and recovered over $5,000,000 in backpay before the unfair labor practice charges were litigated by Administrative law Judges.

NLRB Invites Debate on Employee Use of Work Email for Organizing Activities

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By Kara M. Maciel and Lindsay A. Smith

On April 30, 2014, the National Labor Relations Board (the “Board”) invited interested parties to submit amicus briefs addressing an employee’s right to use an employer’s electronic communications system for Section 7 activity in the case of Purple Communications Inc.  Based on a prior Board decision in Guard Publishing Co. d/b/a Register Guard (2007), employers are not currently required to allow employee use of their e-mail systems for protected, concerted activities because in that case the Board held, “employees have no statutory right to use the Employer’s e-mail system for Section 7 purposes.”  The Board has decided, however, to reconsider its findings in Register-Guard as it evaluates a recent decision from an administrative law judge (“ALJ”) resolved in line with this precedent.

On October 24, 2013, the ALJ presiding over the Purple Communications case dismissed an allegation brought by the union, Communication Workers of America (“CWA”), that the company had committed an unfair labor practice.  He found that the company had not violated Section 8(a)(1) of the National Labor Relations Act (“NLRA”) by maintaining rules prohibiting employee use of electronic equipment and systems for anything other than work purposes. Board General Counsel Richard F. Griffin and the CWA filed exceptions to the ALJ’s decision.  They urged the Board to overrule Register Guard and adopt a new rule that guarantees employees, who are permitted to use company e-mail for work purposes, the right to use it for Section 7 activity, subject only to the company’s need to maintain production and discipline.   

In opposition, counsel for Purple Communications has said that the Board’s consideration of overturning Register Guard is “disturbing” because of the employer’s property interest in an e-mail system developed and used for business purposes.  Giving employees the right to use company e-mail systems for organizing purposes would compromise an employer’s ability to monitor employee use and any potential abuse of these systems because Board precedent generally prohibits employer surveillance of employee Section 7 activity.  Beyond an employer’s property interests, this decision is also particularly problematic in light of the Board’s recently proposed changes to its election rules.  As proposed, these rules would require employers to provide unions with employee e-mail information during organizing campaigns, which may include work e-mails.  Therefore, employer provided e-mail systems could become the new platform for union organizing activities depending upon the outcome of this case.

In an effort to weigh its options for instituting new law regarding an employee’s use of company e-mail systems for Section 7 activities, the Board has asked both the parties in the Purple Communications case, as well as any interested amici to submit evidence in response to the following five questions:

  1. Should the Board reconsider its conclusion in Register Guard that employees do not have a statutory right to use their employer’s e-mail system (or other electronic communications systems) for Section 7 purposes?
  2. If the Board overrules Register Guard, what standard(s) of employee access to the employer’s electronic communications systems should be established?  What restrictions, if any, may an employer place on such access, and what factors are relevant to such restrictions?
  3. In deciding the above questions, to what extent and how should the impact on the employer of employees’ use of an employer’s electronic communications technology affect the issue?
  4. Do employee personal electronic devices, social media accounts, and/or personal e-mail accounts affect the proper balance to be struck between the employers’ rights and employees’ Section 7 rights to communicate about work-related matters?  If so, how?
  5. Identify any other technological issues concerning e-mail or other electronic communications systems that the Board should consider in answering the foregoing questions, including any relevant changes that may have occurred in electronic communications technology since Register Guard was decided.  How should these affect the Board’s decision?

The Board has invited parties and amici to submit empirical and other evidence in response to these inquiries.  Any interested individuals and/or entities may submit briefs in this matter on or before June 16, 2014.  Considering the extensive impact this decision could have on employers, briefs presenting arguments against overruling Register Guard and evidence to support such claims will be essential in persuading the Board to examine the repercussions for employers and either maintain the status quo or, at the very least, establish a narrow exception.

Filing a Wage and Hour Class Action is Protected by The National Labor Relations Act

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An NLRB Administrative Law Judge issued a Decision on April 29th in which he found that when a waiter in a restaurant in New York City, acting alone, instituted a class action lawsuit claiming violation of state or federal wage and hour laws, he was  engaging in concerted activity on behalf of himself and co-workers, even if none of those co-workers are aware of the filing.  While the decision does not mention whether the waiter was represented by a union, it seems pretty clear that there was no union in this case.

Thus, the Judge concluded, when the restaurant terminated the waiter, it did so because, whether he knew it or not, he was engaging in concerted, protected activity with the restaurant’s other employees.  The Judge also noted that when the owners read the complaint and saw that it had been filed on behalf of a class of similarly situated employees as well, the employer likely believed that the waiter was acting with others for their mutual benefit.

The case involved the issue of whether such an employee, whose employer terminated his employment the day it received a copy of the employee’s lawsuit in the mail from the employee’s counsel terminated the employee for engaging in protected, concerted activity as that term is defined under the National Labor Relations Act (the Act or the NLRA) or whether the employee was fired for something he alone did for himself. If he was not acting in concert with co-workers the Judge opined that the employee’s termination would not have violated the Act (although it may have violated other laws).

ALJ Raymond Green distilled the case down to this fundamental question: when an employee files a lawsuit “relating to wages,” is that employee “engaged in concerted activity within the meaning of Section 7 (of the National Labor Relations Act),” or is such an employee “acting solely in pursuit of his own interests?”  The Judge concluded although it was clear that the charging party acted alone, the very language of the complaint, which stated that it had been filed on behalf of the name plaintiff and “on behalf of a class of similarly situated employees who work or have worked at the (restaurant) over a three year period of time,” “it could be argued that (the waiter) sought ‘to initiate or to induce or to prepare for group action.”

The Judge recommended that the NRLB issue an order directing the waiter’s reinstatement with full back pay and seniority.  He also recommended that the employer post a notice to employees that advised employees that among their rights under the Act is the righto “file lawsuits on behalf of themselves and others relating to their wages or other terms and conditions of employment.”

The decision is a reminder that with the current NLRB, with its mindset of expanding its reach into non-union workplaces that a broad range of actions that an employee may take on his or her own behalf are likely to implicate the rights of co-workers and thus be found to be protected under the NLRA as concerted activity. Surely this would be the case in virtually every class action lawsuit under state or federal wage and hour laws.

Videos Posted: Kara Maciel Speaks at NRLB Meeting on Ambush Election Rules

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As we reported on April 14, in “NLRB Receives Spirited Debate Over Ambush Election Rules During Public Meeting,” our colleague Kara M. Maciel spoke on behalf of the National Grocers Association, on three separate panels.

See below for the videos, or visit the NLRB channel on Youtube.