Management Memo

Management’s inside guide to labor relations

Court Refuses to Dismiss Challenge to OSHA Practice Allowing Unions to Accompany OSHA Workplace Investigations

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A United States District Court in Texas has refused to dismiss a law suit challenging OSHA’s practice of allowing union representatives and organizers to serve as “employee representatives” in inspections of non-union worksites. If the Court ultimately sustains the plaintiff’s claims, unions will lose another often valuable organizing tool that has provided them with visibility and access to employees in connection with organizing campaigns.

The National Federation of Independent Business (‘NFIB”) filed suit to challenge an OSHA Standard Interpretation Letter (the “Letter”), which sets forth the agency’s position that an employee of a union that does not represent the workers at the site may accompany the OSHA representative conducting an inspection. The Federation argued on behalf of itself and one of its members because OSHA had permitted a representative of the Service Employees International Union (“SEIU”) to accompany him despite the fact the SEIU did not represent the workers at the facility. The lawsuit asserts that in allowing this, OSHA had violated its own rules and gave the union rights that it did not have under the law. In the Letter, issued in February 2013, OSHA gave a new definition of “reasonably necessary,” which supported its holding, for the first time, that a third party’s presence would be deemed “reasonably necessary,” if OSHA concluded that the presence of the third party “will make a positive contribution” to an effective inspection. The NFIB’s lawsuit contradicted both the OSHA statute itself and OSHA regulations issued in 1971 following formal rulemaking.

While OSHA asked the Court to dismiss the lawsuit, claiming that the NFIB lacked standing to bring the lawsuit because it could not demonstrate that it had been harmed, and that the lawsuit was procedurally flawed for a number of other reasons as well, Judge Sidney A. Fitzwater denied the U.S. Department of Labor’s Motion to Dismiss, finding that “NFIB as stated a claim upon which relief can be granted,” and that “the Letter flatly contradicts a prior legislative rule as to whether the employee representative” in such a walk-around inspection “must himself be an employee.”

The rule Judge Fitzwater referred to, 29 U.S.C Section 1903.8(c) contained OSHA’s policies for what are referred to as “safety walk-arounds,” which are on site workplace inspections. The Letter gives employees in the workplace the right to have a representative present during such an inspection. OSHA’s own rules make clear that such “authorized representative(s) shall be an employee(s) of the employer,” but that when “good cause is shown why accompaniment by a third party who is not an employee of the employer (such as an industrial hygienist or a safety engineer) is reasonably necessary to the conduct of an effective and thorough physical inspection of the workplace, such third party may accompany the Compliance Safety and Health Officer during the inspection.” (emphasis added)

If the ultimate outcome of the case, which seems likely, is a finding that OSHA does not have the authority to permit union representatives to participate in OSHA inspections of workplaces where they do not represent the workers, the effect would be to deny unions a potentially potent tool for organizing. As Judge Fitzwater described in his Memorandum and Order, unions such as the UAW in its ongoing organizing campaign at Nissan in Tennessee have come to rely upon participation in OSHA inspections as a valuable tool.

While it is too soon to say whether the Department of Labor will continue to defend the 2013 Letter and the position that OSHA has the right to permit union representatives to participate in safety and health inspections, Judge Fitzwater’s denial of the motion to dismiss raises serious doubt as to the long term viability of OSHA’s position.

Obama’s NLRB Legacy Remains: New GC Memo Locks Active Arbitration Agreement/Class Action Waiver Cases to Murphy Oil Holding

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Kat PaternoFollowing on the heels first of the U.S. Supreme Court’s January 13, 2017 announcement that it granted certiorari in NLRB v. Murphy Oil USA, along with Epic Systems Corp. v. Lewis (7th Circuit) and Ernst & Young, et al. v. Morris (9th Cir.), and then of President Trump’s January 26, 2017 appointment of Philip A. Miscimarra as Acting Chair of the National Labor Relations Board (“NLRB” or “Board”), there is yet another new development in the ongoing fight over the NLRB’s challenge of class action waivers in arbitration agreements.

Acting swiftly, on January 26, 2017, the same day that Miscimarra was appointed, the NLRB’s Office of the General Counsel (“General Counsel”), Division of Operations-Management, distributed to all NLRB Regional Directors, nationwide, Memorandum OM 17-11 (“Memo OM 17-11” or “Memo”), which provides guidance to Regions handling pending cases involving employment arbitration agreements prohibited by Murphy Oil, essentially protecting all active cases under the former Obama administration’s NLRB.

While citing to commitment to “judicial economy and avoiding undue litigation” while awaiting the Supreme Court’s review as the reason for the guidance Memo, the Memo effectively ensures active cases remain subject to the Obama-appointed General Counsel’s militant opposition to such arbitration agreements under its holding in Murphy Oil—before President Trump’s appointees take control.

Memo OM 17-11 provides specific guidance to Regional Directors regarding the handling of the varying scenarios relating to such agreements under Murphy Oil.  For instance, in cases where the Regions find merit that an employer is either maintaining and/or enforcing an arbitration agreement prohibited by Murphy Oil, the General Counsel in Memo OM 17-11 directs Regions to propose the parties enter into settlement agreements conditioned on the NLRB prevailing before the Supreme Court.

Perhaps most interesting is the broad phrasing used in Memo OM 17-11; it carefully avoids narrowing the issue taken under review by the Supreme Court as being “whether arbitration agreements that bar employees from pursuing work-related claims on a collective or class basis in any forum violates Section 8(a)(1) of the Act.” Glaringly absent from the issue is the hot topic term mandatory, which instead appears solely in a sentence toward the Memo’s end, which states:  “In situations involving opt in/opt out clauses in mandatory arbitration agreements or where it is argued that some other feature of these agreements renders them distinguishable from Murphy Oil, Regions are directed to hold such cases in abeyance.”

On whole, Memo OM 17-11 provides hope for employers. The General Counsel’s Office has, for the moment, temporarily plugged the holes in the Obama Administration Board’s reasoning for its Murphy Oil holding.  But it reveals that the General Counsel is aware that there are, indeed, holes worth questioning.

President Trump Appoints Philip A. Miscimarra Acting Chair of National Labor Relations Board – The Beginning of the End of the “Obama Board”

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By appointing Philip Miscimarra, who has served as a Member of the National Labor Relations Board (“NLRB” or “Board”) since August 2013, to serve as Acting Chair of the agency, President Donald Trump has taken the first step in what will undoubtedly be an ongoing process to change the National Labor Relations Board. Chairman Miscimarra is the only Republican currently serving on the Board. Mark Gaston Pearce, who has served as chairman, a Democrat who has served as chairman since 2011 and as a Board Member since 2010, will continue to serve under his appointment which expires in August 2018.

Significantly, there are two vacancies on the five member Board at this time. This means that President Trump will now be able to fill the two vacant seats with Republicans, giving the Board a Republican majority.  By tradition, Presidents have filled three of the five seats on the Board with members of their own political party and two seats with members of the other party.  Thus, once the President nominates and the Senate confirms two new Board members, the Board will likely revisit many of the decisions of the past eight years, in which the Obama Board took an expansive view of the National Labor Relations Act’s (“NLRA” or the “Act”) meaning and its application to a wide range of representation and unfair labor practice law, including the Board’s expansion of its definition of joint employer status, and the Board’s recent holding that graduate students and teaching assistants are employees with the right to join and form unions, to cite but two examples.

Notably, since joining the Board in 2013, Mr. Miscimarra has frequently been in the minority, dissenting from many of the changes in the interpretation and application of the Act that came to be a hallmark of the Obama Board. Many of his dissents were from what were seen by many observers as an attempt to expand the Act’s definitions of protected activity, in the realm of employee handbooks and workplace rules, in a manner that did not reflect the real world challenges that employers face. Particularly noteworthy have been his dissents in a group of Board decisions that addressed the challenges that employers face in conducting workplace investigations and the conflicting obligations under the NLRA and other statutes.

An even more seismic change will come to the NLRB in November 2017, when the term of the Board’s General Counsel, Richard F. Griffin, Jr. expires and the new President gets to nominate his successor.

Five Issues Employers Should Monitor Under the Trump Administration

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A New Year and a New Administration: Five Employment, Labor & Workforce Management Issues That Employers Should MonitorIn the new issue of Take 5, our colleagues examine five employment, labor, and workforce management issues that will continue to be reviewed and remain top of mind for employers under the Trump administration:

Read the full Take 5 online or download the PDF. Also, keep track of developments with Epstein Becker Green’s new microsite, The New Administration: Insights and Strategies.

Epstein Becker Green to Participate in the 11th Annual National HR in Hospitality Conference & Expo

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Epstein Becker Green is pleased to be participating in the 2017 National HR In Hospitality Conference & Expo at the Aria Hotel in Las Vegas on March 27-29, 2017.  EBG is sending two of its hospitality industry focused attorneys to represent the Firm, Jeffrey H. Ruzal and Steven M. Swirsky.

Jeff and his co-panelists will discuss the topic of new wage and hour regulations, which will be held on Monday, March 27, 2017.  This panel of hospitality employment law professionals will cover changes associated with the minimum salary for exempt employees, managing challenges of off-duty work like email and texts; setting up bonus structures, tracking hours; and responding to flexible workweek requests.   Panelists will detail their successes and challenges related to these topics, and offer up valuable actionable insights for your company.

Steve is participating on a panel which will focus on labor management relations –  “Union 2017: Recent Developments.”   The panel discussion will take place on Tuesday, March 28, 2017 and cover  new organizing efforts, tactics and law, and renewed emphasis on elections. Session takeaways include identifying what law changes have occurred and how they affect employers; a description of how employers react to these changes; and understanding whether unionization is poised to increase or decrease in the hotel industry.

Jeff and Steve look forward to sharing their knowledge in hospitality law and discussing best practices to avoid many of the recurring legal issues plaguing the hospitality industry.

NLRB Rings In the New Year by Signaling It Will Continue Its Pro-Union Rulings

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In yet another decision that exhibits the current Board’s overreaching and expansive view of its jurisdiction, the Board recently ruled that nurses who supervise and assign other hospital staff are not statutory supervisors.

A Position Expressly Created to be Supervisory is Not Supervisory, According to the Board

In 2016, Lakewood Health Center (“Lakewood”) restructured its staffing system and replaced charge nurses with a newly created position, Patient Care Coordinator (“PCC”). According to the uncontradicted testimony of Lakewood Vice-President of Patient Care Danielle Abel, the hospital created this new position for one specific reason – “to ensure accountability for shift-by-shift work flow of the department….in addition to supervising the employees on their shift.” According to the job description, a PCC “provides overall supervision of staff and patient care,” is “responsible for daily nursing assignments,” and “retains overall accountability for the work flow for their shift, and remains accountable if duties are delegated to another qualified staff member.” Abel testified, without contradiction, that PCCs must assess the patient’s needs and the nurses’ skills when assigning nurses to patient care tasks and are accountable for the nurses’ performance.  The undisputed evidence further showed that PCCs were the highest ranking authority present evenings, nights and weekends and, for the majority of the time, the only person present with the authority to assign and direct nurses.  The Minnesota Nurses Association filed an election petition asserting that the PCCs should be included in the bargaining unit, thereby adding one more dues-paying classification to the potential bargaining unit.

In a terse one-page decision, the Board characterized the undisputed evidence as vague and conclusory and found that Lakewood failed to provide tangible examples demonstrating the PCCs’ supervisory authority. Although Abel testified that PCCs were accountable for assigning and supervising nurses, the Board dismissed her testimony as “simply a conclusion without evidentiary value.”  The Board likewise discounted Abel’s testimony that PCCs exercise independent judgment when assigning nurses because no one testified that the nurses have differing levels of skill and ability and, for most of the shifts in evidence, there was only one nurse available, stating that independent judgment cannot be established if there is “only one obvious choice.”

Miscimarra’s Scathing Dissent Exposes the Flaws in the Board’s Decision

Board member Miscimarra’s dissent harshly rebuked the majority’s decision as abstract, thinly supported and inconsistent with the undisputed evidence. Miscimarra noted that both the PCC job description and Abel’s testimony established, without contradiction, that PCCs were accountable for assigning and responsibly directing subordinate nurses.  In fact, according to Abel’s unrefuted testimony, the very reason that Lakewood created this new position was to impose accountability for patient care and staffing issues on a single person.  Miscimarra strongly criticized the majority for “disregard[ing] unrebutted evidence merely because it could have been stronger, more detailed, or supported by more specific examples,” particularly given that the PCC position was created a mere four months prior to the hearing.  He also noted that the Board apparently and unreasonably wanted specific testimony “to establish the commonsense fact that some employees are more skilled than others” and chastised the majority for ignoring the practical reality that the PCC is often the highest ranking person present at Lakewood, explaining that “[s]omeone has to be in charge at this facility at all times.”  Miscimarra ended his dissent with a biting, but particularly apt, reproach that “the finding that PCCs are not supervisors under Section 2(11) provides yet another illustration of the principle that ‘common sense’ is not so common.”

Employers Must Be Prepared

This decision stands as a stark reminder that employers must be prepared with documentation, examples and other specific evidence supporting supervisory determinations to combat the hostile and skeptical review of the current Board. This decision also signals that 2017 will be no different than 2016 for the Board – it will continue to issue decisions that assail employer’s rights and bolster its relevancy even when it flies in the face of common sense and basic workplace practicalities.

Key NLRB Decisions in 2016 – Employment Law This Week

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The year-end episode of Employment Law This Week  looks back at the biggest employment, workforce, and management issues in 2016.

Our colleague Laura Monaco discusses the National Labor Relations Board’s decision in Miller & Anderson, which expanded the already-relaxed joint-employer standard adopted by the Board in its August 2015 decision in Browning Ferris Industries

The show also reviews the Trustees of Columbia University decision on collective bargaining and union organizing.  

Watch the segment below and read Epstein Becker Green’s recent Take 5 newsletter, “Top Five Employment, Labor & Workforce Management Issues of 2016.”

NLRB Uses Hyper-Technical Rule to Overturn Employer’s Landslide Election Victory

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As we previously reported, the ambush election rules implemented by the National Labor Relations Board (“Board”) last year tilted the scales of union elections in labor’s favor by expediting the election process and eliminating many of the steps employers have relied upon to protect their rights and those of employees who may not want a union. We warned that in addition to rapidly expediting election timeframe, the regulations were full of technical and burdensome procedural mandates on employers.  The Board further emphasized the pro-union impact of these requirements in a Decision last week when it overturned the results of an election that a union overwhelming lost based on a hyper-technicality.  Even though there was no prejudice to the union, the Board gave the union another bite at the apple despite the employees’ resounding rejection of union representation; effectively denying the employees their voice and imposing even more burdens on the employer.

New Regulations require service of Excelsior List on union

Section 102.62(d) of the Board’s New Rules and Regulations provides that an employer “shall provide to the regional director and the parties…a list of the full names [and other information] of all eligible voters… within 2 business days after the approval” of the Stipulated Election Agreement. This list of eligible voters is commonly referred to as an “Excelsior list.”   Section 102.62(d) further provides that the Employer’s failure to follow these procedural mandates “shall be grounds for setting aside the election whenever proper and timely objections are filed.”

The Petition and Election at issue

On Thursday, March 3, 2016, URS Federal Services, Inc. (“Employer”) and the International Association of Machinists and Aerospace Works, District Lodge 725 (“Union”) entered into a Stipulated Election Agreement. The Employer filed the list of eligible voters, commonly referred to as an “Excelsior list,” with the Region on Saturday, March 5, but failed to serve the list on the Union.  While the Board’s Decision noted the Employer never offered any explanation for its oversight, the fact is that under the prior regulations an employer need only file the list with the Region; the requirement to serve the union is new.  While the Employer did not directly send it, the Region forwarded the list to the Union on Monday, March 7, thus the Union timely received the list within two business days of the approval of the Stipulated Election Agreement.

The Union lost the election 91 to 54. After its crushing defeat, the Union filed objections, seeking to overturn the election because of the Employer’s deficient service, even though it had timely received the list and never complained of service issue before.

Regional Director finds no harm, no foul

The Acting Regional Director for Region 20 acknowledged that the Employer failed to serve the Union, but declined to set the election aside because the Union had suffered no prejudice since it received the list within two business days of the approval of the Stipulated Election Agreement as required by the Election Rules. The Regional Director explained that “[t]o hold otherwise would exalt form over substance.”  Relying on well-established Board precedent, the Regional Director also concluded that the employer’s technical violation did not frustrate the purpose of the Excelsior rule, which was to ensure that employees are provided a “full opportunity to be informed of the arguments concerning representation.” Bon Appetit Management Co., 334 NLRB 1042, 1043 (2001).

Board puts form over substance to favor Union

The Board rejected the Regional Director’s decision, reasoning that “[t]o allow parties to ignore the service requirements set forth in Section 102.62(d) without any explanation or excuse would undermine the purpose of those provisions.” The Board never articulated what purpose it was referring to, other than to insinuate that strict enforcement was necessary to ensure “all parties take their obligations seriously under the amended Rules.”  (italics in original).  Notably, the primary purpose of the service requirements – to ensure employees are fully apprised of the arguments concerning representation – had not been undermined since the Union timely received the list from the Region.

Dissent detail Board’s pro-union hypocrisy

As dissenting Board Member Philip A. Miscimarra (“Miscimarra”) explained, the Board’s decision is troubling for several reasons. Not only does the holding elevate form over substance, but it contravenes longstanding precedent that the Board should not overturn election results lightly “unless presented with clear evidence that the results may not reflect the will of the voters.”  In furtherance of this principle, the Board has previously declined to overturn elections despite allegations of death threats or widespread voter fraud.  In stark contrast, the Board here accepted the Union’s contention that a “purely technical violation of a service requirement, timely cured by the Region, warrants overturning election results that overwhelmingly disfavored” the Union.

Equally, and perhaps more, concerning is that the Board has effectively created a double standard for unions and employers. In Brunswick Bowling Products, LLC, 364 NLRB No. 96 (2016), a decision issued a mere three months earlier, the Board unanimously upheld the Regional Director’s decision to excuse the union’s untimely service of its Statement of Position.  As Miscimarra aptly pointed out, although the Board has long tolerated minor deviations from the Excelsior list requirements, no such “history of leniency” exists with respect to the service requirements for Statements of Position.   Yet, when a union violated the historically inflexible service requirements for Statements of Position, the Board excused the union’s noncompliance, but refused to do the same for an employer who failed to comply with rules that have traditionally permitted slight deviations, “even though the service error could not have affected the election results because the Union received the voter list on the same day it would have received the list had no service error been committed.”

Employers are advised to continue to adhere to Obama Board’s Regulations and Decisions

During the last eight years, the Obama Board has overturned longstanding Board precedent and expanded the rights of unions far and wide. Many employers may anticipate some relief from the onerous burdens imposed by the Board during the last eight years as a new administration comes to DC.  However, this case is a sober reminder that the Board intends to enforce the rules it has promulgated during the last eight years, and employers cannot afford to become lax in their obligations under these rules and must remember the Decisions rendered remain the standards to which they will be held.

NLRB Majority Strikes Down Overly Broad Employee Handbook Policies

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Our colleagues Lauri F. Rasnick and Jonathan L. Shapiro, attorneys at Epstein Becker Green, have a post on the Financial Services Employment Law blog that will be of interest to many of our readers: “Policies Prohibiting ‘Insubordination or Other Disrespectful Conduct’ and ‘Boisterous or Disruptive Activity in the Workplace’ Struck Down by NLRB Majority.”

Following is an excerpt:

Once again seemingly appropriate work rules have been under attack by the National Labor Relations Board (“NLRB”). In a recent decision (Component Bar Products, Inc. and James R. Stout, Case 14-CA-145064), two members of a three-member NLRB panel upheld an August 7, 2015 decision by an Administrative Law Judge (“ALJ”) finding that an employer violated the National Labor Relations Act (“NLRA” or the “Act”) by maintaining overly broad handbook rules and terminating an employee who was engaged in “protected, concerted activity” when he called another employee and warned him that his job was in jeopardy.  Member Miscimarra concurred in part and dissented in part, arguing that the Board should overrule applicable precedent interpreting the Act.

Read the full post here.

Texas Federal Court Enjoins New FLSA Overtime Rules: Employer Impact

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Our colleague Michael S. Kun, national Chairperson of the Wage and Hour practice group at Epstein Becker Green, has a post on the Wage & Hour Defense Blog that will be of interest to many of our readers: “Stop! Texas Federal Court Enjoins New FLSA Overtime Rules.”

Following is an excerpt:

The injunction could leave employers in a state of limbo for weeks, months and perhaps longer as injunctions often do not resolve cases and, instead, lead to lengthy appeals. Here, though, the injunction could spell the quick death to the new rules should the Department choose not to appeal the decision in light of the impending Donald Trump presidency. We will continue to monitor this matter as it develops.

To the extent that employers have not already increased exempt employees’ salaries or converted them to non-exempt positions, the injunction will at the very least allow employers to postpone those changes. And, depending on the final resolution of this issue, it is possible they may never need to implement them.

The last-minute injunction puts some employers in a difficult position, though — those that already implemented changes in anticipation of the new rules or that informed employees that they will receive salary increases or will be converted to non-exempt status effective December 1, 2016. …

Read the full post here.