Collective Bargaining Agreements

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.

 

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.

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.

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.

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.

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.

https://www.youtube.com/watch?v=_Eooxpk6vNs&feature=youtu.be&t=1m45s

Steve Swirsky, one of the co-editors of this blog, is featured on Employment Law This Week. He discusses the NLRB’s General Counsel memo that outlines the agency’s top enforcement priorities for 2016.

The General Counsel for the National Labor Relations Board has issued an internal memo that offers employers insight into his office’s initiatives and emphasis this year. The memo describes the types of cases that must be submitted to the Division of Advice for review, rather than decided by the Regional Office where the charge was filed. Among other priorities, the General Counsel wants to expand employees’ rights to organize and communicate using company resources, cut back on employer rights in bargaining, and grant significant new rights to nonunion employees.

View the episode below.

The top story on Employment Law This Week – Epstein Becker Green’s new video program – explores the push towards unionization of West Coast on-demand drivers.

Drivers for personal transportation company WeDriveU, who drive Facebook employees to and from work, have voted to unionize with the Teamsters. This brings the total to more than 450 shuttle drivers in Silicon Valley who have joined the union in the past twelve months. And last week, Seattle became the first city to give on-demand drivers the right to unionize over pay and working conditions. Hundreds of drivers in the city pushed for this legislation, which could kickstart the unionization effort for these kinds of jobs across the country.

Adam Abrahms – co-founder of this blog – goes into more detail on this trend toward unionization.

See below to view the episode and see our blog post “Teamsters and Technology II – Labor’s ‘Silicon Valley Rising’ Campaign.”

The National Labor Relations Board (“NLRB”) unfair labor practice hearing  against McDonald’s, USA, LLC (“McDonald’s) and numerous franchisees opened in New York City on Monday March 30, 2015, before Administrative Law Judge (“ALJ”) Lauren Esposito. (“ALJ”), a former NLRB field attorney and union lawyer. Also this week, the Service Employees International Union (“SEIU”) announced that it was investing an additional Fifteen Million Dollars in the Fight For Fifteen campaign, which seeks to organize fast food workers nationwide and that a series of events would take place across the country on April 15th as part of that effort.

In the McDonald’s cases, under the terms of a Case Management Order issued by ALJ Esposito on March 3, 2015, the ULP hearings are scheduled to take place in three phases, with adjournments between each phase.  The hearing which began this week in Manhattan will start with the closely watched claims by the Board’s General Counsel that McDonald’s and its franchisees are joint employers.  The General Counsel will produce witnesses who will offer testimony and evidence on the nationwide joint employer issue and will continue with evidence of joint employer status and evidence on specific violations allegedly committed by the franchisees in New York and Philadelphia.  The hearing will then move to Chicago and will conclude in Los Angeles with the presentation of evidence of joint employer status and evidence regarding specific violations alleged to have occurred in the Midwest and California, respectively.

As we previously reported, on December 19, 2014, the General Counsel of the NLRB issued 13 Consolidated Complaints in Regional Offices across the country charging that McDonald’s and franchisees are joint employers and seeking to hold McDonald’s liable for unfair labor practices allegedly committed by its franchisees. The NLRB’s press release broadly outlined the basis for its decision to issue the Complaints:

“Our investigation found that McDonald’s, USA, LLC, through its franchise relationship and its use of tools, resources and technology, engages in sufficient control over its franchisees’ operations, beyond protection of the brand, to make it a putative joint employer with its franchisees, sharing liability for violations of our Act.  This finding is further supported by McDonald’s, USA, LLC’s nationwide response to franchise employee activities while participating in fast food worker protests to improve their wages and working conditions.”

As a result of the interest generated by these cases, the NLRB has created a separate webpage entitled “McDonald’s Fact Sheet” with links the Complaints and the docket of proceedings.

At recent public appearances, including at the section meeting of the American Bar Association’s Committee on Developments Under the National Labor Relations Act, General Counsel Griffin addressed the legal theories he relied upon in authorizing the issuance of the Complaints alleging joint-employer status.  He noted that it was the General Counsel’s position that the facts (he did not say which ones) would support a finding of joint-employer status under the Board’s existing legal standards and were not dependent upon the Board adopting a new standard such as the one the General Counsel advocated in the amicus brief filed in the still pending Browning Ferris case in which the Board is considering adopting a new more lenient standard for determining whether a joint-employer relationship.

The General Counsel’s  Consolidated Complaints each contain three identical bare bones allegations with respect to the claim that franchisor and franchisees are joint employers: -“(1) McDonald’s and its franchisees are parties to a franchise agreement, (2) McDonald’s possesses and/or exercised control over the labor relations policies of each franchisee, and (3) McDonald’s and the franchisees are joint employers.”

On January 5, 2015, the General Counsel transferred the cases from Regions 4, 13, 20, 25 and 31 to the Regional Director from Region 2.  On January 6, 2015, the Director of Region 2 issued an Order Consolidating the Consolidated Complaints from Regions 2, 4, 13, 20, 25 and 31 with the already-consolidated cases from Region 2, and set the March 30, 2015 hearing date.

McDonald’s filed its Answer to the Consolidated Complaints and a “Motion for a Bill of Particulars or, the alternative, Motion to Strike Joint Employer Allegations and Dismiss the Complaint” alleging that the General Counsel’s consolidated complaint failed to provide it with sufficient notice of the basis for the joint employer status in violation of fundamental due process, the Administrative Procedure Act, and the Board’s own internal manuals and guidelines.  The franchisees also filed similar answers.  The General Counsel opposed McDonald’s Motion for a Bill of Particulars, arguing that the allegation of a franchising relationship between McDonald’s and the franchisees provides sufficient notice of the allegations.  The ALJ denied McDonald’s motion.  McDonald’s also filed a Request For Special Appeal with the NLRB seeking permission to file an appeal to reverse the ALJ’ Order denying its Motion for a Bill of Particulars.  That too was denied.

McDonald’s also filed a “Motion To Sever” the Consolidated Complaints, to allow for separate hearings for the charges from the six regional offices that had been consolidated for trial in New York.  While the Board’s Rules and Regulations give the General Counsel discretion to consolidate cases the General Counsel’s discretion is not unlimited.  Where the cases involve different factual issues, different backgrounds and different complaints or legal theories, the Board has held that consolidation was not proper.  McDonald’s argued in these cases that consolidation is improper because the cases  consolidated in Region 2 involve 61 charges, and perhaps most importantly, 22 separate distinct and unrelated employers, as well as 181 unrelated allegations and 30 individual restaurants.  McDonald’s urged the judge to sever the complaints so that each individual franchisee will have his or her case heard by a separate Administrative Law Judge in the region where the case arose.

McDonald’s requested oral argument on its Motion to Sever. On February 11, 2015, the ALJ held a telephone conference with McDonald’s and all of the franchisees and their separate attorneys to address McDonald’s motion as well as scheduling issues.  Given the number of parties and significant issues involved, McDonald’s counsel requested that the teleconference be transcribed by a court reporter, which the ALJ denied.  Not surprisingly, the ALJ  denied McDonald’s Motion to Sever.

On March 3, 2015, the ALJ issued a Case Management Order which the General Counsel had requested.  The Order provides that the issue of whether McDonald’s can be held liable as a joint-employer for the unfair labor practices of its franchisees will be heard before trying the merits of the underlying unfair labor practice allegation.  The Order further requires McDonald’s to present its evidence on the joint employer status specific to a franchisee immediately after the General Counsel and the Charging Parties present their evidence specific to the franchisee which allows the General Counsel and Charging Party multiple opportunities to hear and respond to McDonald’s evidence before resting their cases.  McDonald’s filed a Request for Special Appeal seeking to reverse the ALJ’s Order, arguing that its alleged status as a joint-employer is a remedial issue that should be tried only after the General Counsel has proven the merits of the underlying charges against the franchisees alleged to have committed unfair labor practices and arguing that the sequence of trial unfairly allows the General Counsel and Charging Party a preview of McDonald’s case before they rest their cases.

The pressure on McDonald’s by organized labor extends beyond the NLRB proceedings.  This week the New York Times reported that the Service Employees International Union (“SEIU”) has pumped more than $15 million into the Fight for Fifteen movement which seeks to raise the wages at McDonald’s and other fast food restaurants and  retailers to a minimum of $15 per hour and helped persuade the NLRB to go after McDonald’s on a joint-employer theory.

In addition to their NLRB claims, workers at McDonald’s restaurants  in at least 19 cities have also filed workplace health and safety complaints with the Occupational Safety and Health Administration (“OSHA”), alleging that they had been injured and placed in danger on the job because of a lack of adequate training and protective equipment.

The SEIU has arranged for a coalition of European and American unions to accuse McDonald’s of improper tax practices.  Moreover, Organizers for the Fight for Fifteen will hold rallies in New York, Chicago and Los Angeles on April 15, 2015 in which they expect upwards of 10,000 protestors.

The McDonald’s case along with a pending NLRB case involving Browning-Ferris, are significant high stakes litigation which have the potential to fundamentally alter the way employers conduct business with franchisees and third-party contractors.  Last week, the U.S. Chamber of Commerce’s Workforce Freedom Initiative (WFI) issued a 40 page report, “Opportunity at Risk: A New Joint-Employer Standard and the Threat to Small Business.”  The report highlights the administration’s ongoing effort to redefine the concept of “joint-employment” relationships, and how these efforts “threaten to disrupt major sectors of the economy such as franchising and subcontracting.”   The report is essential reading for employers, attorneys and anyone else interested in what the impact would be on the economy and employer-employee relations if the legal standards for determining joint-employer status change in the way that the Board’s General Counsel and the SEIU and other unions are urging in the McDonald’s cases and elsewhere.

We will continue to monitor these case closely and keep you appraised of new developments.

Last week we reported on the fact that Teamsters Local 853 and Loop Transportation had completed negotiations for a first collective bargaining agreement covering a unit of shuttle bus drivers who provide transport for employees of Facebook.  We pointed out that employers in technology, media and telecommunications were facing union organizing targeting employees of their vendors and suppliers for transportation, maintenance, food service and the like, that threatened to enmesh such employers as a consequence of unions gaining recognition of their vendors’ and suppliers’ employees. We also noted that with the NLRB’s expected broadening of its standards for finding joint-employer relationships to exist, that the risks were increasing that they would be held to be joint-employers of the suppliers’ personnel.

Who Are the Employers Impacted and At Risk?

Now, Silicon Beat, the “tech blog” of the San Jose Mercury News,  The Los Angeles Times, USA Today and other publications are all reporting  that while apparently not a direct party to the negotiations between Loop and the union, Facebook has now “approved” the collective bargaining agreement, which it had to do before the contract could go into effect.  In fact, Loop and Local 853 announced in their joint press release, that “The contract, which workers overwhelmingly voted to ratify went to Facebook for its agreement as Loop’s paying client before implementation.” Such economic realities are the type of consideration that the NLRB’s General Counsel has been urging the Board to look at in deciding whether a joint employer relationship exists.

Is Silicon Valley Rising ?

The Teamsters success with Loop and the Facebook drivers is not an isolated event.  Rather it is a part of an ongoing, well financed effort by a coalition of unions including the Teamsters  the Service Employees International Union (SEIU), The Communication Workers of America, UNITE-HERE, The South Bay Labor Council, the NAACP and other community organizations known as Silicon Valley Rising.  The group’s agenda is to address what it sees as a two tiered economic system in which, in its view, direct employees of the technology and media companies in the industry are paid well and receive good benefits, while those who support the industry as employees of contractors and suppliers are not.

While time will tell whether the movement is successful in organizing and unionizing, the successes to date such as those with the Loop Transport drivers,  reports of well known companies taking formerly contracted services such as security in house, and large wage increases for unrepresented drivers at others, suggests that the campaign is having an impact already.

What does This Mean For Employers?

Targeted, industry specific organizing that brings together unions and community and advocacy groups are increasingly working to make their case on arguments of “income inequality” and the differences in pay and benefits for those who are benefiting from the economy and those who are not.  The treatment and status of those employed by contractors and vendors versus the companies who rely upon their services is one of the forces giving rise to the redefining of employer-employee relationships in general and joint employer standards in particular.

As with the SEIU’s earlier Justice for Janitors and  Stand For Security campaigns, a key tactic is likely to be the application of pressure on corporations that rely on contractors to provide essential services will be to target and pressure the user to have its contractors increase pay, benefits and working conditions and, perhaps more importantly, not to resist union organizing among the contractors’ employees.

As a first step, it is critical that employers be aware of and consider these forces in structuring business relationships and deciding which services to perform in-house and which to contract out.  How agreements with contractors are structured and implemented will also remain critical:

  • Are contracts likely to result in findings of joint employer status?
  • Who will direct and control the performance of the contracted for services?
  • What degree of control or influence will the ultimate client exercise when a union organizes or represents the contractors’ employees?