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NLRB Requires Specific Waivers During Bargaining – Employment Law This Week

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Featured on the new episode of Employment Law This Week: Employers must have specific waivers to make unilateral policy changes when bargaining with a union.

That’s according to the NLRB, which once again clarified its “clear and unmistakable” waiver standard to restrict employers’ midterm changes. In this case, an employer relied on a broad management rights clause in its contract with the union to make unilateral changes to specific policies. The NLRB found that the union had not waived its right to bargain over those changes because the contract did not refer to the policies with sufficient clarity.

See the episode below and read Mark Trapp’s blog post on this topic.

NLRB Finds “Discharge” Is an “Actual Discharge” and Violates the National Labor Relations Act Even If It Is Immediately Reversed and Employee Suffers No Harm

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The National Labor Relations Board (“NLRB” or “Board”) has reversed the findings of an Administrative Law Judge (“ALJ”) who found that an employee who was told he was fired and then almost instantly told by the owner of the company he worked for that he was not fired and continued to work without any loss of compensation or working time had in fact been unlawfully discharged in violation of the National Labor Relations Act (“NLRA” or the “Act”). It would seem that if “discharge is the ‘capital punishment’ of employment,” this case presents a rare example, in the Board’s eyes of an out of body after death experience, in which the executioner is held liable for killing someone who is unquestionably still alive.

Complaints About a Supervisor of Non-Union Employees: Concerted Protected Activity

The case involved employees who were neither represented by a union nor seeking to become represented who did paving and related work for a paving contractor that was performing work at the University of Arizona’s Tech Park location. Over time the employees had a number of complaints about what they considered to be rude, demeaning and unprofessional remarks and treatment by the supervisor of their crew. They sought out the owner and met with him to express their concerns and to ask him to reign in or replace the supervisor. Under the Act, this was deemed to be concerted and protected activity concerning their terms and conditions of employment.

The Board Reversed Its Own Administrative Law Judge

In Bates Paving & Sealing, Inc., 364 NLRB No. 46 (2016), Chairman Mark Pearce and Member Kent Hirozawa, acting on Exceptions filed on behalf of the Board’s General Counsel reversed the decision of ALJ Amita Baman Tracy who had found, based on her review of the evidence including the credibility of witnesses including employee Juan Marana (“Marana”), that the evidence did not support the General Counsel’s claim that Bates Paving had discharged Marana in a heated meeting between employees and the owner of the company about concerns the employees had expressed about their treatment at the hands of their immediate supervisor, Robert Padilla (“Padilla”) and what the owner told the workers were problems with their work on a recent paving project. Marana claimed that as tempers rose in the meeting, the owner told him he was “f***ing fired,” and that he should leave.   The ALJ found that Marana’s testimony was not credible and was in fact contradicted by the sworn affidavit he provided to the NLRB during the investigation of the unfair labor practice charge. In fact, the ALJ pointed out in her decision that in his affidavit, the owner “told him that he was not fired,” and that Marana’s “responses changed throughout his testimony.”

Marana admitted that after the meeting where he exchanged words with the owner, the owner made it clear to him that he was not fired and that he should work the next day as scheduled. Marana also admitted, as both the ALJ and the Board found, that he did not lose even a single hour’s pay.

The ALJ did not however give the company a clean pass on its actions at this and found that the owner had in fact told Marana to leave and to stop his statements about the supervisor. However while she that the owner’s statements about firing Marana “would tend to restrain or interfere with employees in the exercise of their Section 7 rights.” Because she concluded that Marana was not discharged, whatever the employer may have said, the employer could not be found to have unlawfully discharged him because he did not lose his job.

Why The Board Disagreed With the ALJ

Although the Board did not expressly overrule the ALJ on the facts, in reality they did just that. While the ALJ found Marana not to be credible, essentially because she concluded that he knew he was not fired and in reality never lost even an hour’s worth of pay, the Board took what can be described as an absolutist view of the facts, and concluded, perhaps in a subconscious channeling of Donald Trump’s trademark line from The Apprentice (“You’re fired!”), that the very act of saying the words constitutes a discharge, the “capital punishment” of employment. However it seems that at most what the employer here did was threaten to invoke the industrial death penalty, and not the act of execution.

The Board tried to justify its overriding of the ALJ’s credibility determination, i.e. her finding that Marana did not really believe he was actually fired, by focusing not on what he thought but on what message the other employees who were present in the meeting or heard of it later would take away. In this regard the majority wrote

An employer cannot avoid Board sanction simply by reversing the discharge before an employee suffers financial costs. The message has been sent that the employer is willing to take this extreme action and the employee victim is likely to understand that a “change of heart” may not come so quickly, if at all, if he again engages in protected concerted activity.

What Does This Mean For Employers

There are a number of important takeaways in the Board’s decision in Bates Paving & Sealing. They include not only a reminder that the Act applies and employees are protected in a wide range of circumstances where there is neither union representation in the picture nor any suggestion that employees may be seeking to bargain or to designate a union to bargain on their behalf.

The decision clearly demonstrates that the Board is continuing to aggressively apply the concept of protected concerted activity. It also delivers the message that the adage “No Harm, No Foul,” does not apply in labor law. Innocent or momentary lapses in judgment are likely not to be excused even where an employer quickly undoes any potential harm, if the matter gets to the Board’s attention.

NLRB Again Deprives Employer of the Benefit of a Bargained-for Management Rights Clause

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The National Labor Relations Board (“NLRB” or “Board”), in its recent decision in Graymont PA, Inc., 364 NLRB No. 37 (June 29, 2016), has fired the latest salvo in its long running dispute with the United States Court of Appeals for the District of Columbia Circuit concerning the issue of what legal standard should be applied when a union claims that an employer has made a unilateral change in terms and conditions of employment during the term of a collective bargaining agreement and the employer claims that the union waived its right to bargain over the topic in question in a management rights clause or a “complete agreement” clause.

In Graymont, the Board adhered to its “clear-and-unmistakable” waiver approach to analyzing claims under Section 8(a)(5) where the employer claims that the union waived its right to bargain over a particular matter during the term of a collective bargaining agreement (“CBA”). The three-member majority rejected  the employer’s argument that the  “contract coverage” standard applied by the D.C. Circuit and several other Courts of Appeal was the correct standard for assessing such claims.

This decision comes on the heels of an unpublished decision by the D.C. Circuit in which that court again rejected the Board’s “clear and unmistakable” waiver standard as being applicable to such disputes. In Heartland Plymouth Court MI LLC v. NLRB, No. 15-1034 (May 3, 2016), the D.C. Circuit laid out its disagreement with the NLRB concerning the so-called “contract coverage rule”:

As we have noted several times, there is a “fundamental and long-running disagreement” between this court and the Board as to the appropriate approach by which to determine “whether an employer has violated Section 8(a)(5) of the National Labor Relations Act when it refuses to bargain with its union over a subject allegedly contained in a collective bargaining agreement.” The Board insists such questions turn on whether the Union “clearly and unmistakably” waived its bargaining rights on the subject through the CBA, but we have repeatedly held “the proper inquiry is simply whether the subject that is the focus of the dispute is ‘covered by’ the agreement.” Under our precedent, if a subject is covered by the contract, then the employer generally has no ongoing obligation to bargain with its employees about that subject during the life of the agreement.

The dispute regarding the appropriate standard made all the difference in the Graymont decision. There, a Board majority held that the Union did not clearly and unmistakably waive its right to bargain over unilateral changes made by the Employer to its work rules, absenteeism policy, and progressive discipline schedule.

In Graymont the employer unilaterally implemented various changes to its work rules, absenteeism policy and progressive discipline schedule; believing it had the management right to do so under it CBA.  There the employer sought to rely  on a negotiated management rights clause under which it retained “the sole and exclusive rights to manage; to direct its employees; … to evaluate performance, … to discipline and discharge for just cause, to adopt and enforce rules and regulations and policies and procedures; [and] to set and establish standards of performance for employees.” . The union initially filed a grievance, but then withdrew it and filed an unfair labor practice charge with the NLRB alleging that the employer had made unilateral changes and failed to bargain.

The Board applied its “clear and unmistakable” waiver standard, and found that the Union did not waive its rights to bargain when it entered into the CBA, because the Board concluded that the CBA’s management rights clause did not “specifically reference” the rules and policies changed – i.e., the work rules, absenteeism policy and progressive discipline policy.

The majority ruling is just the latest example of how the Board’s waiver analysis operates to deprive employers of the benefits of their negotiated agreements – particularly in management rights clauses – and force further bargaining over rights employers understandably believe they have already secured, often in return for other concessions, at the bargaining table. In bargaining with the Union, the employer in Graymont secured the clear right “to adopt and enforce rules and regulations and policies and procedures.” Yet the majority found this language insufficiently clear to constitute a “clear and unmistakable” waiver by the union of its right to bargain, during the term of the CBA, over such changes.

Dissenting, Member Miscimarra noted that “Management-rights language may be general and, at the same time, clear and unmistakable.” Thus, in agreeing to the broad language, “the Union clearly and unmistakably waived its right to bargain over the changes.” He also agreed that therefore the union “had already bargained and agreed that Graymont had the right to make these changes unilaterally.”

The NLRB’s Graymont decision once again demonstrates the uphill battle employers face in asserting their rights, even those secured in writing after bargaining. In effect, the Board’s waiver approach can ignore even clear language, and render rights secured at the bargaining table illusory.  We often encounter employers who believe they have negotiated a strong broad management rights clause only to feel they are victims to a bait-and-switch type attack from a union filing an unfair labor practice charge based on the employer exercising the very rights it thought it had secured.

Combined with the its recent disinclination to defer such matters to arbitration, where they belong, the Board’s decision highlights the danger of an employer acting unilaterally, even with what may appear to be clearly-established rights. Employers should bear this in mind when negotiating, and seek to make management rights clauses as specific as possible. Employers should also bear in mind the Board’s approach to such actions when contemplating unilateral moves, and plan accordingly.

NLRB Drops Other Shoe on Temporary/Contract Employee Relationships: Ruling Will Require Bargaining In Combined Units Including Employees of Multiple Employers – Greatly Multiplies Impact of BFI Expanded Joint Employer Test

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The National Labor Relations Board (“NLRB” or “Board”) announced in its 3-1 decision in Miller & Anderson, 364 NLRB #39 (2016) that it will now conduct representation elections and require collective bargaining in single combined units composed of what it refers to as “solely employed employees” and “jointly employed employees,” meaning that two separate employers will be required to join together to bargain over such employees’ terms and conditions of employment.” To understand the significance of Miller & Anderson, one must consider the Board’s August 2015 decision in Browning Ferris Industries (“BFI”), in which the Board adopted a new and far more relaxed standard for holding two entities to be joint employers.

As the Board explained in its press release trumpeting the Miller & Anderson decision, it will now hold elections and require bargaining in “petitioned-for units combining solely and jointly employed workers of a single user employer,” in those cases in which a union asks for such a mixed employer unit so long as the Board finds the jointly and solely employed workers “share a community of interest,” under the Board’s “traditional community of interest factors for determining unit appropriateness.”

Oakwood Care Center Overruled – Employers’ Consent No Longer Required

Board has overturned its 2004 decision in Oakwood Care Center, 343 NLRB 659 and held that when a union petitions for a representation election in a unit that includes both “solely employed” and jointly employed employees of a single “user employer” the Board will no longer require the consent of the employer or employers before directing such an election and certifying a union to represent such a unit. What this means essentially is that unions alone will now have the right to decide when and where they will require such mixed units.

Like it did in BFI, the Board again justified overruling precedent in part based on “changes in the American economy,” finding “Oakwood imposes additional requirement that are disconnected from the reality of today’s workforce and are not compelled by the Act.”

“User Employers” and “Supplier Employers” Will Be Required to Bargain Together

In BFI, the Board held that a business will be held to be a joint employer of another employer’s employees where it has the ability to impact the terms and conditions of the other employer’s employees even if it never exercises that right. Under the new standard enunciated by the Board majority in that case, “[t]he Board may find that two or more entities are joint employers of a single work force if they are both employers within the meaning of the common law, and if they share or codetermine those matters governing the essential terms and conditions of employment.”

Now, under Miller & Anderson, such a user employer will be required to bargain over the terms and conditions of a supplier employer’s employees as to whom the Board finds it to be a joint employer.  Additionally, the supplier employer will also have to bargain over the jointly employed employees’ terms and conditions.  In overruling precedent and imposing a new combined unit bargaining obligation, the Board reasoned that requiring consent of both employers for a combined unit of jointly and non-jointly employed employees did not afford employees “the fullest freedom” to “self-organization.”  However, as Member Miscimarra’s dissent points out, the Board majority attempts to explain away the specific language of Section 9(b) of the NLRA and applicable legislative history limiting the broadest units the Board can impose to “employer units” as opposed to multi-employer units.

The potential for confusion and uncertainty is enormous. In an attempt to minimize these concerns, the Board majority stated that the so-called user employer’s bargaining obligations will be limited to those of such workers’ terms and conditions that it possesses “the authority to control.”

What Does All of This Mean?

As we pointed out, the Board’s decision in Miller & Anderson, which has been anticipated for more than one year, is another critical link in the current Board’s efforts to make it easier for unions to successfully organize and obtain bargaining rights.  It should be seen as the next step in the progression that began with the Board’s change in its representation election rules that were designed for quicker elections and representation proceedings in which employers lost their right to litigate critical unit and supervisory status issues before an election is directed, and to appeal of a Regional Director’s decision and direction of election before an election is conducted, and the time they have traditionally had to communicate with employees before they vote in an election.

When employers voiced their concern that the new election rules would mean that they would in many instances not have any meaningful opportunity to present counterarguments to a union’s promises before a vote took place, the Board and other advocates for the expedited rules countered that this was an empty argument and that employers were almost always aware of union activity long before a petition was filed. That argument now looks particularly empty given Miller & Anderson’s dictates allowing petitions for user and supplier employers’ employees in the same unit, where at least one of the two joint employers will likely be totally aware of what is occurring among a group of another employer’s employees.

Similarly, while the Board suggests that the supplier and user employer will only have an obligation to bargain over those terms and conditions they possess the authority to control, the fact is that this is an invitation to extensive litigation and disagreement over which entity has the “authority” to control which terms and conditions.

What Should Employers Do Now?

At a minimum, a detailed risk assessment of an employer’s workforce and its reliance upon its own employees and temporaries, leased and contract labor employed and controlled, in whole or in part, by so-called supplier employers is in order. “User” employers should determine the goals and risks associated with a relationship and determine whether it is possible and/or desirable to avoid a joint employer relationship or embrace it but attempt to control liability.  Both “supplier” and “user” employers should look for contractual provisions regarding defining the relationship, including who controls and does not control certain aspects, indemnification provisions, provisions related to responses and responsibilities related to union organizing and collective bargaining and similar concerns.  Experienced labor counsel should be consulted to assist in these issues.

Supreme Court Agrees to Review D.C. Circuit’s Decision That Former NLRB Acting General Counsel Served in Violation of Federal Law

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Supreme Court Agrees to Review D.C. Circuit’s Decision That Former NLRB Acting General Counsel Served in Violation of Federal Law

On June 20, 2016, the United States Supreme Court granted a request by the National Labor Relations Board (“NLRB” or the “Board”) to review a decision from the D.C. Circuit Court of Appeals, which found that the Board’s former Acting General Counsel Lafe Solomon served in violation of the Federal Vacancies Reform Act, 5 U.S.C. §§ 3345, et seq. (“FVRA”) when he remained in that position after President Barack Obama nominated him to permanently fill the General Counsel role.

In June 2010, President Obama named Solomon as Acting General Counsel for the Board. Then, just six months later, the President nominated Solomon to serve as General Counsel permanently.  Solomon, whose nomination was later returned by the Senate, ultimately served as Acting General Counsel until November 2013.  In NLRB v. SW General, Inc., the D.C. Circuit ruled that the FVRA prohibits one individual from simultaneously serving as both an acting officer and a nominee to permanently fill that same position.  The Circuit concluded, therefore, that Solomon had become ineligible to continue serving as Acting General Counsel as of January 5, 2011 – the date on which the President nominated him as General Counsel.  Accordingly, the Circuit found that Solomon lacked authority to issue an unfair labor practice complaint against SW General, Inc. (“Southwest”) in January 2013, and it vacated the Board’s subsequent decision that Southwest had, in fact, committed the  unfair labor practices alleged in that complaint.

In its petition for certiorari, the Board argued that the D.C. Circuit’s decision conflicted with past interpretations of the FVRA “upon which every president since the statute’s enactment has relied,” and insisted that the FVRA’s prohibition against permanent nominees simultaneously serving as acting officers applies only to individuals who initially served as “first assistants” to the office in question.  Because Solomon was never a “first assistant” to the General Counsel, the Board continued, the FVRA did not prohibit him from continuing to serve as Acting General Counsel during the pendency of his nomination to serve as  General Counsel.  The Board warned that the Circuit’s decision could significantly impede the President from temporarily filling open positions with the individuals whom he or she “deems most qualified to fill them permanently.”  Moreover, given the upcoming presidential election, the Board urged the Supreme Court to grant review “to ensure that the new President will not face uncertainty . . . regarding the legal constraints that govern his or her selection of acting officers and nominees.”

As we noted in a prior post, when the D.C. Circuit issued its decision in SW General, it emphasized the limited immediate impact of its finding that Solomon lacked authority to issue ULP complaints after January 5, 2011.  Indeed, the Circuit expressly stated that its decision was “not the Son of Noel Canning” – a reference to the Supreme Court’s decision in Noel Canning v. NLRB, which resulted in the retroactive invalidation of hundreds of Board decisions.  Instead, the Circuit made clear that if an employer failed to timely object to the invalidity of the Acting General Counsel’s service, that issue would be waived.

Nonetheless, the Supreme Court’s decision in this matter is expected to have wide-reaching ramifications, particularly given that many agencies will likely see new incoming acting officers once the newly-elected President takes office in January.  We will keep you updated with further developments in this case.

Nationwide Preliminary Injunction Ordered Against Persuader Rule

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Stop Sign CrosswalkToday, the United States District Court for the Northern District of Texas issued a nationwide preliminary injunction halting the Department of Labor’s (“DOL”) controversial new Persuader Rule and its new Advice Exemption Interpretation, previously discussed here and here.  The Rule and Interpretation marked a dramatic change 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, if the new rule were to take effect, for the first time, be considered reportable as persuader activity.

Injunction Issues Just In Time

The injunction was issued in advance of the July 1, 2016, enforcement date, which the DOL had stated employers, and labor relations consultants, including attorneys, would need to start reporting engagements covered by the new Rule and Interpretation.  Employers and attorneys have raised concerns about the impact on the attorney-client privilege, including the chilling effect and interference with their ability to obtain/provide advice traditionally exempt from disclosure.

In granting the injunction, 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 Northern District of Texas went one step further than the United States District Court for the District of Minnesota, which last week ruled that the DOL’s Persuader Rule exceeded the agencies authority under the LMRDA, but stopped short of issuing an injunction.  The Court’s Order here gives employers a comprehensive victory, finding not only a substantial threat of irreparable harm but also that the Texas plaintiffs will likely succeed 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.

Preliminary Injunction May Only Be Temporary Reprieve for Employers

Obviously a preliminary Injunction is just that, preliminary and temporary in nature.  It is anticipated that the DOL will file an appeal and, depending on the results of the Presidential Election later this year, this could be a looming threat for employers for some time.

Accordingly, employers should first do all they can, including signing long-term agreements with law firms and/or labor relations consultants before July 1, to be prepared in the event the Rule ultimately becomes effective, so as to potentially shield themselves from the obligation to report and disclose so-called indirect persuader activity that has been exempt from reporting under the former rules.

Court Denies Injunction to Keep Amended Persuader Rule from Taking Effect – Finds DOL Exceeded Authority Under LMRDA

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Steven M. Swirsky

Steven M. Swirsky

U.S. District Court Judge Patrick J. Schiltz “has found that aspects” of the Department of Labor’s Amended Persuader Rule “are likely invalid because they require reporting of advice that is exempt from disclosure under Section 203(c)” of the Labor Management Reporting and Disclosure Act (LMRDA).

The Amended Persuader Rule Makes Distinctions Between Materially Indistinguishable Activities

In his 34 page opinion denying the plaintiffs’ application for a temporary restraining order and/or a preliminary injunction that would keep new reporting obligations for employers and labor relations consultants, including attorneys from taking effect on July 1, “The Court has also questioned the manner in which the DOL has construed the term “advice,” pointing out that the DOL makes distinctions  between activities that are materially indistinguishable and struggles to place certain common activities on one side or the other of the untenable divide that it has created between persuader activities and advice.”

The Court Denied an Injunction Because It Did Not Find Irreparable Harm

Although the Court found that “the plaintiffs have shown a likelihood of success on one of their claims—specifically their claim that the new rule requires the reporting of some activities that are exempt from disclosure under Section 203(c), a critical element of any application for an injunction, the Court denied their request for an injunction because it found that they had not established that they are likely to suffer irreparable harm if the new rules are to take effect.

In finding that the plaintiffs’ “minimal showing of threat of irreparable harm is not sufficient to warrant the extraordinary relief of a preliminary injunction,” the Court noted that the Amended Rule “has multiple valid applications” and that the DOL had “identified thirteen types of conduct to which the rule applies, only some of which seem to require the reporting of advice that is exempt under ¶ 203.”

The Court’s Other Findings

The plaintiffs in the Labnet case also challenged the Amended Rule on the grounds that it interfered with their First Amendment Rights, it is void for vagueness, arbitrary and capricious, overbroad and violated the Regulatory Flexibility Act.  The Court concluded that the plaintiffs were not likely to prevail on these claims.

What Happens Next?

As we have reported, there are two other challenges to the Amended Rule pending in the U.S. District Courts for the Northern District of Texas and the District of Arkansas.  Hearings have taken place in both those actions, in which plaintiffs are also seeking to enjoin the enforcement of the Amended Rule’s new advice reporting requirements.  Rulings are anticipated in both prior to the July 1 effective date.

Employer Options and Alternatives

As we reported, earlier this month the DOL described what may be a meaningful way for employers (and law firms) to avoid the potential obligation to file public disclosure reports concerning identifying payments that employers made in connection with “indirect persuader activities” that were not reportable under the long standing rules, but that will, for the first time, be considered reportable as persuader activity.

At a recent compliance assistance seminar, representatives of the DOL stated that no persuader payment reporting will be required as a result of payments made after July 1 so long as those payments are tied to an agreement made prior to that date.  This interpretation by OLMS is considerably different from how many envisioned enforcement of the rule when the amendment was issued and it remains to be seen whether the DOL will stand by these statements and how it will interpret and apply them going forward. Until now, most employers and law firms understood that post-July 1, any agreements or arrangements—as well as any payments related to indirect persuader activity—would trigger reporting, regardless of whether the agreements or arrangements were entered into before July 1.

Given this new information, some employers may wish to sign long-term agreements with law firms or consultants now. At this point, it appears that so long as those agreements are made prior to July 1, any payments made under those agreements—even payments made later in 2016 and beyond—will not trigger reporting, according to the DOL.  If the DOL stands by these statements, it appears that entering into agreements with labor counsel prior to July 1 should protect advice and assistance provided by counsel from reporting and disclosure to the DOL and would apparently give employers and labor consultants, including attorneys, a strong defense against any claims that they willfully failed to file reports under the Amended Rule.

NLRB Scraps Rule on Mixed-Guard Unit Recognition – Employment Law This Week

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Featured on Employment Law This Week: The NLRB reverses its mixed-guard unit recognition rule. If a union represents both security guards and other employee groups, then an employer’s decision to recognize the union is voluntary. Before this decision, employers could also withdraw their recognition if no collective bargaining agreement was reached.  Now, employers must continue to recognize the union unless and until the employees vote to decertify it in an NLRB election.

View the episode below or read more about this story in a previous blog post, written by Steven M. Swirsky, co-editor of this blog.

NLRB Shifts Power Toward Unions During Strikes – Employment Law This Week

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Featured on Employment Law This Week: The National Labor Relations Board (NLRB) finds the hiring of permanent replacements for strikers to be an unfair labor practice.

In a 2-1 decision that could benefit unions during contract negotiations, the NLRB found that a continuing care facility in California violated federal labor law when it hired permanent replacements after a series of intermittent strikes. While the NLRB and courts have long held that an employer’s motivation for hiring permanent replacements is irrelevant, in this case, the board held that if the hiring is motivated by an intent to discourage future strikes, it interferes with employees’ rights under the National Labor Relations Act (NLRA). The employer in this case will likely seek judicial review. However, in the meantime, the decision adds new risks for employers that may wish to hire permanent striker replacements.

View the episode below or read more about this story in a previous blog post, written by frequent contributor Steven M. Swirsky.

Seventh Circuit Creates Split on Class Waivers – Employment Law This Week

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One of the top stories featured on Employment Law This Week: The U.S. Court of Appeals for the Seventh Circuit has joined the National Labor Relations Board in finding that arbitration agreements containing class action waivers violate the National Labor Relations Act (NLRA).

At issue is a collective and class action by employees of Epic Systems about overtime pay. The company was seeking to dismiss the case based on a mandatory arbitration agreement that waived an employee’s right to participate in a collective or class action. Unlike the Fifth Circuit, the Seventh Circuit found that a class-action waiver like this one violates the NLRA and, because the contract is unlawful, its enforcement is not required by the Federal Arbitration Act. The Seventh Circuit’s decision creates a split in the federal circuits that means that the U.S. Supreme Court will likely weigh in on the issue.

View the episode below or read more about this story in a previous blog post by Steve Swirsky.