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.

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?

Earlier this week the Senate confirmed Richard Griffin as NLRB General Counsel.  As we have noted previously in greater detail, Griffin’s appointment was controversial, having been unconstitutionally appointed as a Board Member and, to the ire of Republicans, seemingly thumbed his nose and multiple Courts of Appeals which ruled he and the other recess appointments did not have the authority to act.

In an anti-climactic end to several years of NLRB appointment Senate wrangling, Griffin was confirmed Tuesday in a party line vote.  He now becomes the first confirmed General Counsel in over three years.  He also joins the five now constitutionally confirmed Obama appointments to the Board. Together, the NLRB is now poised to operate at its most efficient and productive level in over a decade.  The problem for employers is that Griffin has a history of advancing a very pro-labor agenda.As we noted in August, as the General Counsel Griffin will serve an important policy role in deciding where the prosecutorial direction of the Board. The General Counsel has the final say in whether the Board pursues cases which reverse existing Board precedent, continue recent expansions of Section 7 rights or create entire new theories of employer liability. The recent Boeing controversy as well as the assault on “at-will” agreements, social media policies and similar common sense employer policies are all the result of an aggressive NLRB General Counsel flexing his muscles.

With Griffin’s controvery to such an important position, employers have reason for concern. As if not borne out by the decisions of the Board since he was appointed, Griffin has a long history as a union advocate. For nearly twenty years prior to his 2012 recess appointment to Griffin was employed by the International Union of Operating Engineers as its counsel, rising to serve as the union’s General Counsel and to serve as on the board of directors of the AFL-CIO Lawyers Coordinating Committee. Griffin will now serve as the top prosecutor bringing cases before a Board, the majority of which is comprised of his former union lawyer colleagues.

Management Missives

  • Employers should not expect a reversal of course for the Office of the General Counsel as Griffin is likely to continue, if not expand the efforts of Lafe Solomon to broaden the Board’s role in non-union workplaces.
  • Union-free employers should dust off their union avoidance programs and redouble their efforts.
  • Unionized employers should be prepared for more strident and aggressive unions.
  • All employers should review their policies and procedures to ensure they are not susceptible to challenge under the Board’s recent pronouncements.

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

On Tuesday, August 20th, in an opinion that follows in the wake of Noel Canning, United States District Judge Benjamin H. Settle dismissed an injunction petition filed by Ronald Hooks, a Regional Director  of the National Labor Relations Board, on the grounds that he was “without power” to issue the underlying unfair labor practice complaint.

The Regional Director had initially filed the petition with the District Court in June in an effort to obtain a temporary injunction that would, among other things, have prevented Kitsap Tenant Support Services, a home healthcare provider, from disciplining or terminating employees pending the resolution of complaint alleging a host of unfair labor practices.

The Court however, dismissed the Regional Director’s petition, ruling that the NLRB had no legal power to issue the underlying complaint alleging violations of the NLRA.  Not only did the Judge follow Noel Canning and its progeny by ruling the Board (as constituted at the time) lacked a properly constituted quorum but Judge Settle went even further by ruling the Board lacked a properly authorized General Counsel.

In a ruling which could potentially paralyze the NLRB, Judge Settle held that Acting General Counsel Lafe Solomon’s appointment to the post had been invalid, and consequently, that he could not have lawfully delegated the authority to request a temporary injunction to the Regional Director.  Specifically, Solomon was never confirmed by the Senate but was serving in the “Acting” capacity pursuant to President Obama’s appointment under the Federal Vacancies Reform Act (FVRA).  The Judge ruled, however, that this appointment was invalid because Solomon failed to meet the very specific requirements which would permit an appointment under the FVRA – namely he was not a first assistant to the departing General Counsel.

The decision is an exciting one because it raises interesting procedural questions affecting the operations of the Board. It remains to be seen what the administrative law judge tasked with adjudicating the dispute will do. Will he or she acknowledge that Regional Director Hooks lacked authority to issue the Complaint as dismiss it on such grounds? Or will the adjudication proceed as though Judge Settle’s decision does not affect agency operations? This issue is further complicated by the fact that the Board had already denied a motion to dismiss filed by Kitsap earlier this year on grounds similar to those relied upon by Judge Settle. If the administrative law judge refuses to proceed however, then it would seem that he or she would have no choice but to refuse to hear any complaints issued by the Regional Director during the period in which the Board lacked a valid quorum let alone all complaints issued under the authority of Solomon who has served as the Acting General Counsel since June 2010.

Beyond this case, the theory advanced in Kitsap could have wide-ranging implications that render the recent compromise to confirm a five member Board virtually meaningless.  Without a properly appointed General Counsel can the Agency continue to issue complaints?  Are the complaints issued under Solomon all invalid?  What about appeals authorized or being responded to under the direction of Solomon?  What about the appointment of Regional Directors – were those appointed under Solomon invalid and are the actions of such Regional Director’s similarly without authority?

Likewise, where does these leave the General Counsel’s office?  As noted here the President has appointed Robert Griffin to replace Solomon but Griffin likely would face stiff opposition in the Senate.  The prior conventional wisdom was Obama could use the FVRA to make Griffin the Acting General Counsel but under Kitsap Griffin also would not be qualified for such an interim appointment.  This could leave the Agency without “authority to act” until the Senate confirms a new General Counsel or the President appoints an Acting General Counsel that meets the FVRA criteria.

Certainly, this groundbreaking decision leaves many more questions than it provides answers.

And lest we forget, like every other decision which has relied upon Noel Canning, the impact of Judge Settle’s ruling may hang in the balance until the Supreme Court hears Noel Canning next term. Until that time however, rest assured that attorneys will be citing Kitsap at Board hearings and in court rooms across the country.

Management Missives

  • Employers facing unfair labor practice charges should consider preserving the issue that the NLRB is without authority to issue a complaint (seek an injunction or take other action which requires the General Counsel’s approval).
  • Stay tuned!

On August 1st President Obama made a bold statement by appointing Richard Griffin to serve as the NLRB’s General Counsel only three days after the former union lawyer vacated his unconstitutional recess appointment as a NLRB Board Member. The President statement by appointment made at least two things clear –

  1. The President wants an aggressive pro-labor General Counsel and NLRB, and
  2. The President values advancing the labor agenda over cooperation with the US Senate.

As we discussed here on July 30th the Senate confirmed a full Board for the first time in a decade as a result of a “deal” in which Senate Republicans capitulated to a threat from Senate Democrats to change the rules on filibusters. We noted last week that this deal was likely not a good deal at all for employers as it resulted in three former union lawyers appointed as the controlling majority of the Board.

For employers, one of the only concessions of the “deal” was that it resulted in the withdrawal of the pending nominations of Griffin and Sharon Block to the Board. Griffin and Block of course had served as unconstitutionally appointed recess appointments since January 2012. During their period on the Board they issued a number of controversial pro-labor decisions and were generally viewed as activist Board members. To the chagrin of employers and Congressional Republicans they also continued to issue decisions even after multiple Courts of Appeals ruled they were unconstitutionally appointed and had no authority to act. In May Senator Lamar Alexander (R-Tenn.) encapsulated the view of many noting:

My problem is that they continued to decide cases after the federal appellate court unanimously decided they were unconstitutionally appointed. Not only has the President shown a lack of respect for the Constitutional role of the separation of powers… but I believe [Griffin and Block] have as well.

The President’s withdrawal of their nominations was a symbolic, if not substantive victory.

By nominating Griffin to serve as the agency’s top lawyer and prosecutor, the President has both symbolically and substantively thumbed his nose at the Senate Republicans and employers.

In fact, rather than removing Griffin’s influence from the Board by the deal, it seems that the President may have actually enhanced that influence. As the General Counsel Griffin will serve an important policy role in deciding where the prosecutorial direction of the Board. The General Counsel has the final say in whether the Board pursues cases which reverse existing Board precedent, continue recent expansions of Section 7 rights or create entire new theories of employer liability. The recent Boeing controversy as well as the assault on “at-will” agreements, social media policies and similar common sense employer policies are all the result of an aggressive NLRB General Counsel flexing his muscles.

With Griffin’s appointment to such an important position, employers have reason for concern. As if not borne out by the decisions of the Board since he was appointed, Griffin has a long history as a union advocate. For nearly twenty years prior to his 2012 recess appointment to Griffin was employed by the International Union of Operating Engineers as its counsel, rising to serve as the union’s General Counsel and to serve as on the board of directors of the AFL-CIO Lawyers Coordinating Committee. Griffin will now serve as the top prosecutor bringing cases before a Board, the majority of which is comprised of his former union lawyer colleagues.

While Griffin technically needs to be confirmed by the Senate to be General Counsel, in the absence of a confirmation, the Act permits the President to appoint Griffin as Acting General Counsel at any time, and to serve in that role the full powers of a confirmed General Counsel. In fact, Lafe Solomon, the current Acting General Counsel, has been serving in that capacity sine June 2010 without confirmation. So in essence, as soon as the President wants Solomon to pass the baton to Griffin, Griffin will start serving in his new role.

Management Missives

  • Employers should not expect a reversal of course for the Office of the General Counsel as Griffin is likely to continue, if not expand the efforts of Solomon to broaden the Board’s role in non-union workplaces.
  • Union-free employers should dust off their union avoidance programs and redouble their efforts.
  • Unionized employers should be prepared for more strident and aggressive unions.
  • All employers should review their policies and procedures to ensure they are not susceptible to challenge under the Board’s recent pronouncements.